Wine in a can — sustainable alternative or packaging gimmick?

Wine in a canLee Ann Pearce, Wells Fargo Sector Manager, Winery, Vineyards, and Tree Nuts

Wine in a can is not a new concept, having been around for some time, however, it’s taking on new life as the wine industry adapts to ever-changing consumer preferences. As baby boomers age out, and the millennial generation ages in for alcohol consumption, it’s apparent that wineries are working to keep pace with this physically active and environmentally conscious consumer group. Millennials value portability and ease of recycling, but don’t wish to sacrifice quality and product authenticity in the process. Winemakers are clearly listening to their customers, since the number of premium wine brands that are embracing the packaging of wine in cans is increasing.

According to a study entitled “Millennial Wine Consumers: Attitudes toward Alternative Wine Packaging,” conducted by the Texas Wine Marketing Research Institute, millennials, as wine consumers, are demanding new, convenient, exciting, and eco-friendly products. Further, the study indicated that situational usage is the primary motivation or co-motivates the purchasing and preference behaviors of millennials. Based on this information, it’s no surprise that 57.2% indicated that they would purchase alternatively packaged wine when gathering with friends, and 55.4% indicated they would purchase for home consumption. Additionally, approximately 45% of respondents reported they would buy alternatively packaged wine when attending a picnic or a family gathering.

The study asked a focus group made up of millennials to evaluate 4 types of alternative wine packaging as follows:

  • Type 1: Banrock Station 3 liter bag-in-box
  • Type 2: Beso Del Sol 3 liter bag-in-box
  • Type 3: Sofia 4-pack 187 ml aluminum cans
  • Type 4: Sutter Home 4-pack 187 ml plastic bottles

Represented in the chart below, the results showed that millennials had favorable opinions about the design and aesthetic quality of wine in a can (Type 3). The perception of quality when focused solely on the packaging was also highest for cans.

Table 5.44. Comparison of alternative packaging perceptions

Comparison of Alternative Packaging Perceptions
Source: Texas Wine Market Research Institute
Note: The results are presented as mean scores. All items were measured on a 5-point
Likert scale, 1= Strongly Disagree and 5=Strongly Agree.

 
While wine in a can is merely a whisper in the wine industry today, the growth in sales is a roar. In the July 2016 issue, Wine Spectator highlighted Nielson data showing the wine-in-a-can category growing by 125.2% in value when compared to the prior 52 weeks ending June 18, 2016. Sales over the same time period increased by 227% totaling $14.5 million, up from $6.4 million the prior year. Even more astonishing, U.S. “off-premise” canned wine sales (meaning the wine is purchased to be taken home or elsewhere to be consumed) accounted for $6.8 million of the total $14.5 million of canned wine sales, a growth rate of over 1,000% during the 52-week time period.1 This magnitude of growth speaks to retailers, so expect to see canned wine options at Trader Joe’s, big box stores, and other beverage-focused purveyors.

It should be stated that this packaging trend is not just for the largest wine producers. While Francis Ford Coppola produced wine in a can under the brand name Sofia, in honor of his daughter’s name, smaller players like Paso Robles-based Field Recordings are also following suit. For small wineries, taking the step to package wine in cans, may represent a way to directly connect with consumers since smaller wineries are having difficulty garnering the attention of distributors who are currently experiencing consolidation.

So, the big question becomes sustainability. Is wine in a can merely a fad, or is it here to stay? It’s probably too soon to answer this question as research shows that consumer preferences for wine change with both age and increasing wealth. Today’s millennial consumer may not still be a fan of wine in a can when older and living a different lifestyle. However the need for portable, eco-friendly packaging will likely remain.

So is canned wine here to stay? All I can say is, “You never know.” I remember when screw tops were first introduced as an alternative closure for premium wines. Many in the wine industry were slow to adopt the change, or thought it inappropriate for the higher priced wines. Yet, consumers disagreed, and screw top closures are now commonplace. So, I’ll reiterate that consumer preferences strongly impact the industry. As long as wine packaged in cans delivers on quality, price, and portability, I would not be surprised if sales continue to grow at a fairly aggressive rate.

1. Wine Spectator “Would You Pop a Can of Pinot?” August 2016.

Lee Ann Pearce

Lee Ann Pearce is a vice president and sector manager within the Food and Agribusiness Industry Advisors group focused on the Specialty and Non-Grain Crops sector with emphasis on wineries, vineyards and tree nuts.

Lee Ann joined Wells Fargo in 2016 after a 30-year career in banking. Prior to joining Wells Fargo, Lee Ann worked as regional vice president, manager of Capital Markets, and senior vice president, manager of the Winery Specialty Group for Farm Credit West on the Central Coast of California. Lee Ann also worked for commercial banks in the San Joaquin Valley of California, including Wells Fargo, before moving to the Central Coast.

Lee Ann holds an undergraduate degree in ag business management from California Polytechnic State University, San Luis Obispo, with an emphasis in finance. Lee Ann also has direct agricultural production experience with wine grapes, tree fruit, cattle, and Christmas trees through family businesses as well as her own business ventures. She and her immediate family currently live on a small farm that grows grapes used for premium wine production. Lee Ann is active in the community, currently serving as secretary of the Templeton Instrumental Music Boosters Association, and previously as a member of the San Luis Obispo Farm Bureau Board of Directors. She is also a member of the Paso Robles Mid State Fair Heritage Foundation.