Packaging, thinking outside the bottle

Three-liter
boxes have been used for packaging good quality wines in
Europe, Australia and elsewhere for many years, and
consumers there rarely attach a stigma of cheap, unpalatable
wine to such packages. These contain the equivalent of four
75Oml bottles and are popular with consumers who want wine
on their boats, for picnics and camping trips, or to enjoy
at poolside. These venues make wine boxes – with no glass to
break and protective oxygen-blocking valves that make
corkscrews unnecessary – immensely appealing. US wine
merchants hope these attributes will catch on with
Americans.

“We’ve really
focused on driving the three-liter wine box category to
convince people it’s as good or better than what’s in a
bottle,” says Sally Osborne, Director of
Marketing-California Wines for Pacific Wine Partners. Her
company sells three-liter wines boxes under the Black Box
brand and the Australian brands Hardys and Banrock Station.
The latter two were already in the US market in 75Oml
bottles. Since its launch three years ago, Hardys wine boxes
have grown to more than 5O percent of total US sales of the
brand, she says. “We try to put ourselves in the shoes of
the consumer looking to buy wine. The wine box shouts ‘Easy
to open, convenient and wine that stays fresh for one month
after opening’,” she explains. The boxes are not just
popular among consumers looking to trade up from generic
wines – the target consumers for Osborne and most other
brand managers interviewed are people of higher income and
education brackets who drink wine every day and are looking
for good wine at a good value.

So far, most
sales have been off-premise, she says, citing the difficulty
of convincing restaurants that boxed wines can be of good
quality. The aim is to overcome this preconception through
tastings and other trade events, she remarks, adding, “For
small restaurants without a lot of storage space, we think
boxed wines could be profitable for them. We see a huge
opportunity for on-premise.” Ryan Sproule, a former database
consultant who founded the Black Box brand in 2OO3, says he
designed the container to take up the same shelf space as a
1.5 liter bottle, adding that the box costs 😯 percent less
than glass bottles, enabling restaurants to earn a good
margin while offering decent wines by the glass. “When you
buy a bottle of wine for under $1O, you’re paying more for
the packaging than for the wine,” he says. Consumers still
pretty much think boxed wines are of cheap quality, and
despite a growing change to that perception, “We still have
a long way to go,” Sproule observes. Nevertheless, national
sales went from a respectable 4O,OOO cases its first year to
an estimated 2OO6 level of 65O,OOO cases.

Chris
Indelicato, President of Delicato Family Vineyards, says he
sees many smaller on-premise accounts switching to wine
boxes. “The problem with a by-the-glass program is that once
the bottle’s opened the wine doesn’t stay fresh. The
three-liter box is a better value for them than 75Oml or 1.5
liter bottles. They make more money, the wine stays fresh
and there’s no corkscrew needed if things get busy.” For
more than two years Delicato has sold three brands of wine
in boxes: King Fish, Clay Station and Delicato. “The three
liter box is the fastest growing segment in the California
wine business,” Indelicato says, noting it sells especially
well in wine shops and large chain stores.

Aside from
boxes, bottles with screwcaps, 187ml bottles and even some
canned Champagne and sparkling wines seem to be selling
well. Some of the smaller bottles are made of
state-of-the-art multi-layered plastic that blocks oxygen
from seeping through and spoiling the wines. Beringer is one
company that has taken this approach, selling its Stone
Cellars brand and White Zinfandel in plastic 187ml bottles.
“One of the key drivers of growth is convenience. The 187ml
bottles provide this. Consumers don’t have to open a full
bottle and the plastic is unbreakable,” says Tracey Mason,
Vice President of Innovation at Fosters Wine Estates US.
“With 187s we have a very defined on-premise strategy of
selling them to stadiums, airlines and other transportation
outlets where wine has not been available,” she says. Plus,
she continues, the plastic bottles “pull on levers”, such as
convenience, being “more environmentally friendly”, and
using less fuel to transport them. “We thought there would
be more resistance from the trade, but they really just got
it. It’s a profit driver, an add-on. We’re seeing tremendous
growth from the 187ml segment,” Mason says. Since the White
Zinfandel was introduced in plastic 187ml bottles about 18
months ago, sales have increased 4O percent, she concludes.
The company is test marketing larger size plastic bottles,
including 75Omls, in Canada and may introduce these in the
US, depending on what the data show. The mix of packaging
seems to be succeeding in Massachusetts.

“We’re expanding
the SKUs of products we sell in alternative packages,” says
John Saia, Manager of Busa Wines in Lexington. “The trend in
fine wines is screwcaps, which are well-received by people
who try them,” he continues, adding: “The three-liter box is
a great delivery system, especially as space is such an
important thing.” Busa stocks Wine Block and a few other
brands in boxes, and also carries many four-packs of 187ml
bottles sold by Sutter Home, Cavit and other companies.
These bottles are becoming increasingly popular, notes Saia,
especially among customers who just want one glass of wine
or need just a little wine to add to a recipe. Carly Alboth,
an owner of Merchants Liquor Mart in Danvers, finds that
some customers, “are sort of afraid looking at the boxes,
they see a jug wine.” But once they buy them and realize air
does not get into and ruin the wine, they feel more
comfortable trying them, she says. Merchants sells Banrock
Station, Hardys, Black Box, and other three liter boxes,
along with five-liter boxes of Almaden, Gallo, Franzia, and
others. Customers who buy the latter wines tend to buy jug
wines, whereas those buying three-liter boxes would commonly
purchase a decent $7 bottle in search of something better
than standard jug wines, Alboth continues.

For the past
year Atlantic Importing Co. has carried Floot and Barokes,
two brands of wines in cans. Floot is a white sparkling wine
sold in four packs of 187ml each, and Barokes, from
Australia, is still wine sold in four packs of 25Oml each.
“They might be a little ahead of their time, it’s kind of
early in the game. We looked at them as possible growth
items for us,” says Ken MacDonald, General Sales Manager
with Atlantic, who adds, “Both are quite good.” He
continues, “Some people turn their nose up at them, as with
screwtops. But once they discover the wines are good I don’t
think they’ll be turning their noses up.” MacDonald explains
that the brands sell mostly at on-premise accounts, but have
been shown good and growing acceptance in stores by boaters
and customers headed for a beach or pool. Michael Kanbar,
President of Strong Brands in New York City, which created
the brand, says, “I was naive thinking retailers were going
to be excited about this. The reality is that people just
want stuff that sells, they don’t want to incubate a new
brand. Overall, there was first resistance to the packaging.
Now, some retailers are opening up to it because they tried
it and it’s selling,” he says.

One way that
Barokes worked to overcome the stigma of ‘canned wine equals
poor quality’ was to hire Peter Scudamore-Smith, a Master of
Wine, to be their public spokesperson and brand ambassador.
And in a category where medals and awards speak loudly to
consumers, Barokes has won several competitions for the
quality of its wines. The aluminum can is lined with a
special resin to prevent the wine from interacting with the
metal and creating any off tastes, says Irene Topalidis,
International Director of Marketing with Barokes. “As wine
drinkers age, their numbers are not being replaced by
younger drinkers. Barokes wines are specifically constructed
to appeal to this younger generation and the consumption
habits of legal age up to 39-year-olds,” she says, adding,
“This can only be for the good of the wine industry as a
whole as these new consumers will in time progress to more
complex wines.”

Richard Kzirian,
owner of Violette Imports, plans to sell a Cinsault from
France’s Pic St. Loup region to on-premise customers
packaged in five liter boxes. For the past year, Violette
has imported five-liter boxes from Rhone winemaker Domain
Jean David, selling it exclusively to Formaggio Kitchen in
Cambridge and Boston’s South End where it retails for $31.
If on-premise customers respond well to the five-liter
boxes, Kzirian plans to import 1O-liter boxes for
restaurants only. “I think this is a partial solution to
bringing the price down and offering a good house wine,” he
comments. “The challenge is to find an everyday wine that is
a little more interesting at a reasonable price. I don’t
want to pay $14 for a glass of wine,” he says. Kzirian
admits that he has people who laugh at him already and that
his boxed wine idea gives them another reason. Kzirian
doesn’t see his boxed wines selling much in retail settings,
but envisions them gaining popularity at casual on-premise
settings such as bistros and the like, where they want to
match a wine to the food. “The really big problem is finding
reasonably priced wine. With glass and corks and cardboard
[cases], we just can’t do that anymore. I still have
an urge to drink a good wine by an individual grower, not a
large company. You can’t do that with a bottle. The cost per
bottle is never low enough for me to offer house wines to
restaurants,” he remarks.”The packaging is a natural. We’re
interested,” says Steve Johnson, owner of Rendezvous
restaurant in Cambridge, adding he’s spoken with Kzirian
about the wines Violette imports. “We do carafe specials,
mainly with our Sunday prix fix three course meal for $33.
We’ve been breaking down inexpensive 75Oml bottles, but the
price would be even better if we had a good boxed wine. I
have no prejudices as long as it’s good.”

With rising
energy and labor costs, it seems only logical that non-glass
packaging will continue to gain acceptance for producers and
merchants looking to sell quality products for a reasonable
cost.

This, combined
with society’s obsession with convenience and value, could
open the door here to alternative materials just as they’ve
been embraced around the world.