Commodities are products that are driven first by price. Charles Shaw, i.e. Two Buck Chuck, is a commodity. Barefoot, YellowTail, Franzia box wines, Beringer White Zin, and many other wines such as those are commodities as well. Yes, they have brand recognition, but the driving force of the sale of those wines is first and foremost because they are cheap (or another angle to look at it is this: commodity wine brands are those that a certain slice of the public will hunt endlessly for the lowest price then drive across town to get it).
The problem is when what you’re selling is not a commodity but your retail buyer wants to treat it as such. They are asking you to basically change what the product inherently is. It’s like selling computers but your buyer wants to turn it into a calculator, just so they pay less.
If what you are selling is not a commodity, then don’t let it be treated as one. The race to the bottom is not a race you want to win.