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Wine in cans soars in stores: Research hints at why it's more than a millennial movement

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W hile design for high-end wines continues to build on visual cues that communicate luxury and tradition, with glass bottles being key to that, those reaching to a majority of consumers below that level increasingly are embracing aluminum packaging.

Vintners historically have taken the pulse of consumer trends by talking with consumers and trade market experts who focus on wine.

But research increasingly suggests wine marketers need to widen their web of inspiration beyond the industry, according to Peggy Gsell, client business partner for data research firm Nielsen, which collects and analyzes data from store sales and consumer usage. Gsell has focused on wine market research for two decades.

“One of the things that’s become abundantly clear over the last few years is that the lines of distinction between beer, wine and spirits have really started to blur,” Gsell said at the Wines & Vines Packaging Conference in Napa Valley recently.

Consumers don’t really care anymore whether or not it’s a malt-based or a spirits-based or a wine-based product.Peggy Gsell, client business partner for data research firm Nielsen

And the lines are being blurred further by category-fluid producers of adult beverages, she said, pointing to examples such as Treasury Wine Estates’ extension of its virtual-reality brand 19 Crimes into India pale ales and MillerCoors’ expansion into wine with Movo wine spritzers and Anheuser-Busch InBev’s recent acquisition of the fast-selling Babe canned wine line.

“Consumers don’t really care anymore whether or not it’s a malt-based or a spirits-based or a wine-based product,” Gsell said. “They just want a product that’s fulfilling one of their needs states.”

Those needs include desires for a more healthful lifestyle, something that pairs well with food or an exciting beverage to have at parties, she said.

And the move toward reformatting products to meet consumer needs, such as smaller portion sizes and portability, is part of a movement across all consumer packaged goods, said Kelly Cohn Nielsen, vice president and innovation business partner for the research firm.

“It expands usage occasions, to make sure the package is more appropriate for different types of occasions,” she said.

Experimentation with product content and packaging is coming to beverage alcohol as sales growth for U.S. beer and wine overall has slowed to a few percentage points annually in the past couple years, Gsell said. Beer and wine have benefited from premiumization — raising product quality and unit prices — as sales growth has tended to be higher as prices go up.

But the producers of wines at the premium level have also seen a bump in sales from embracing packaging focused on convenience: spigoted boxes and single-serving cartons and bottles, especially the latter made from plastic or aluminum.

While the dollar value of wine sales in U.S. grocery, liquor and convenience stores were up only 1.6% in the 52 weeks ending in mid-July, according to Nielsen, those for wine in plastic single-serving 187-milliliter bottles and for paperboard TetraPak cartons of various sizes were over 10%, reaching roughly $200 million-plus each.

But canned wine dollar sales growth jumped by over three-fours in that same time period, albeit on a much smaller base of $93 million in sales. For 375-milliliter cans, equivalent to half a standard 750-millilliter bottle, dollar growth more than tripled, to $33 million.

Glass bottles, the standard and double-sized 1.5 liter, still made up 87% of dollar sales for wine in stores in those 12 months, up 2% from a year before for 750 milliliters but down 4% for the larger format, according to Nielsen. Meanwhile, alternative packaging such as cans made up 10%-13% of dollar share, up 6%-9%.

To put this share in perspective, the retail value of wine sales in the U.S. last year was $68.1 billion, including stores, restaurants and other venues, an increase of 4.2% from 2017, according to the Wine Institute.

W hile the first California wine in a single-serving can is said to have emerged in 1936, that effort was short-lived. It would take six decades before the industry picked up the vessels again. While breweries had been rolling out their beverage in cans as well as bottles during that time, U.S. vintners largely stuck with glass.

That began to change nearly two decades ago, when concerns about “cork taint” led some wineries, particularly Down Under, to shift to aluminum screw caps and later experiment with aluminum cans. A big effort by cork businesses here and stretching back through the supply chain to the forests overseas to eradicate the problem chemical compounds helped.

All the top wineries are canning.Robert Williams Jr., WICresearch.com

Francis Ford Coppola Winery was among the vanguard of the movement of domestic vintners to pursue aluminum cans, debuting the sparkling rose brand Sofia in 250-milliliter cans about a decade ago, followed by the Director’s Cut label a couple of years ago.

“All the top wineries are canning,” Robert Williams Jr., Ph.D., told the conference-goers. He’s a Pennsylvania university marketing professor and partner in WICresearch.com, which conducts market research on wine in cans. A number of vintners are either putting out canned wine under their own brands or private labels, he said.

Williams currently is tracking on the market 900 different canned-wine options — shelf-keeping units, or SKUs — and Nielsen has a bead on 450. That’s up from less than 20 Nielsen tracked by just four years ago, and 350 SKUs Williams tallied just last year.

Williams’ company surveyed 1,700 Pennsylvania consumers on canned wine last year and conducted a blind tasting with 86 of the same wines in bottles and cans this year. He found six drivers for why consumers would favor a can versus a bottle: convenience, more occasions to enjoy, sustainability, quality, portion control and the look.

The survey participants predominantly thought of themselves as wine-savvy, Williams said. The surveys in the past two years suggested that regardless of their professed wine knowledge or lack thereof there was no strong preference for a wine packed in glass over aluminum.

“This is not just a female-type product, as some people would like you to believe,” Williams said. “It cuts across generations. It cuts across gender.”

His group’s 2019 survey found that 43% of those surveyed prefer 250-milliliter cans, 36% the 187-milliliter can and 21% the 375-milliliter can. Half the 375 producers of wine in such containers that Williams tracks use the 250-milliliter can, 8% the 187 and 42% the half-bottle-sized can.

One impediment that Williams and others have pointed to in the popularization of canned wine is the federal regulation for the volume of wine consumers can purchase individually, what the U.S. Tax & Trade Bureau calls “standard of fill” for beverage alcohol. Approved standards of 1 liter and less are 50, 100, 187, 375, 500 and 750 milliliters, so four 250-milliliter cans have to be sold in a four pack to equal 1 liter. That makes the minimum purchase price for the 250s, a size popularized by energy drinks such as Red Bull, much higher than competing canned wine in approved sizes.

But that may change soon. The TTB has called for comments on a proposed rule that would eliminate standards of fill for wine and spirits, and that period has been extended through October.

Jeff Quackenbush covers wine, construction and real estate. Contact him at jquackenbush@busjrnl.com or 707-521-4256.

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