The international drinks industry has thrown most consumer and retail forecasts out of the window over recent weeks, with uncertainty remaining the only certainty, here as in so many other sectors.
In January, senior vice president of beverage alcohol at Nielsen in the US, Danny Brager, made various predictions for a year which, only a couple of months later, was proving extremely difficult to predict. “Table wine sales will decline as long as the economy continues to be healthy, with the biggest losses coming from lower-priced wines,” he said.
Well, with the health of national economies, like the health of their populations, seriously compromised, consumers may well already be turning back to those lower-cost options for bottled wines. But this might also signal an opportunity for canned alternatives. In fact, the “pockets of growth in wine” identified by Nielsen included “wine in cans and alternative packaging” and “wine spritzers and wine-based cocktails in cans”.
According to its data, cans accounted for just less than 1 per cent of US wine sales at the beginning of the year. But they are ideal for home consumption, with multipack options offering convenience and portion control, at a time when on-premise sales in the catering and hospitality sectors are suffering most.
An upward trajectory
But even setting current realities to one side, there is a momentum behind growth in this segment which cannot be ignored. In the year to March, year-on-year (YOY) growth of close to 85 per cent took US off-premise sales of canned wine to over US$125 million, according to Nielsen figures. Recent years have shown a steepening YOY growth curve.
The UK, though starting from a much smaller base, has been ratcheting up even higher percentage growth. At £6.85m ($8.47m), it may weigh in at just 6 per cent of the value of the US market, but it has seen compound annual growth (CAGR) averaging 160 per cent over the past three years.
Client business partner at Nielsen in the UK Gemma Cooper talks about
“an influx of new product launches in canned wine” over this three-year period. “Today, there are 37 different offerings in the market compared to three years ago, when there were just nine products available,” she says.
“We have seen many of the larger wine manufacturers enter into this space, bringing some well-known brand names with them.”
She makes the additional point that this has coincided with a boom in other ready-to-drink canned alcohol offerings. Overall, it could be argued, consumer perceptions when it comes to beverage cans have undergone a positive shift in the direction of artisanal quality (in craft beers, for example) and environmental responsibility (where water brands, for instance, specify cans rather than plastics), both of which could benefit wine.
The picture across the rest of Europe is more mixed but, according to canmaker Ardagh Group, Euromonitor reported a 9 per cent growth in canned wine markets across the continent during 2019.
One brand which recognises the significance of wider European sales is UK-based Boutinot. Having started out with a 250ml can (which it still uses), earlier this year, the company put its Long Little Dog range of wines into a 187ml can.
“Sales so far have been mainly into Scandinavia and the States, though we expect sales to go further in Europe, in particular,” says product manager Sean Tennyson.
Boutinot’s experience also underlines the challenge all brands face in second-guessing consumer preferences, not just in their choice of wines, but also in the unit volumes they are packaged in.
“The 187ml size is closer to a single-serve than 250ml,” says Tennyson. “It’s also to do with price-point. If the smaller can is successful, we’ll probably stop doing the 250ml.”
Can size limitations
Boutinot is using Ardagh’s new 187ml addition to its wine can range. At the packaging group’s Metal Beverage business unit, chief executive Oliver Graham points out that wine-in-can container sizes are regulated in both the US and Europe. “Industry sizes range from 187ml to 500ml,” he says. “In terms of trends, in the US, we do see these size options expanding as the market grows.”
At Ball Beverage Packaging North & Central America, director of marketing operations Megan Sanford details this all-important regulatory aspect to US sales. As she explains, the Alcohol and Tobacco Tax and Trade Bureau (TTB), which governs wine sales nationally, currently stipulates unit sizes for wine, including the most common 187ml, 250ml and 375ml volumes.
“The 187ml and 375ml units may be sold as a single-serve or as multipacks, as they are listed under the current Standards of Fill regulations,” says Sanford. “The 250ml, however, must be sold in ‘aggregate packaging’ [or multipacks] under the current guidelines.”
Quoting data from IRI, she adds: “These three sizes made up more than 90 per cent of canned wine volume in 2019. Of those, the 250ml remains the most popular among consumers, but the 375ml is the fastest-growing.”
Meanwhile, at least one researcher and industry observer emphasises that these unit-size regulations are not set in stone. “There’s growing pressure to relax these restrictions,” says Gavin Sacks, professor and associate chair of Food Science at New York State’s Cornell University in the US.
Sacks sees huge potential in the canned wine segment, drawing an analogy with the screw cap bottle. “Around 25 years ago, screwcaps were synonymous with cheap wine,” he recalls. “Nowadays, for some varieties, it’s almost 100 per cent screw cap. I think people are increasingly drinking in different settings. I’m going to predict that in 10 or 15 years, canned wine will be just as commonplace.”
The final size range for cans in the wine segment remains in doubt, he suggests, but for the largest volumes, including 750ml, aluminium bottles could be an option.
Meanwhile, if current growth on both sides of the Atlantic is going to be sustained, says Sacks, some issues will need to be addressed – notably, the optimisation of internal can coatings.
As food and beverage supply chains have increasingly avoided coatings based on bisphenol-A (BPA), wine has not been the only industry to trial different alternatives with varying degrees of success. There has been a first and second generation of BPA-non-intent (BPA-NI) coatings, and some manufacturers would claim to have progressed to a third generation.
Sacks cannot provide statistics in this area, but has built up a fairly clear picture from anecdotal evidence. “To simplify the stories I’m hearing from wineries, old-fashioned BPA worked just great,” he reports.
“With the first generation of BPA-NI coatings, there were problems when it came to wine. The second- and third-generation coatings are better, but still not perfect.”
Sour grapes or rotten eggs
One potential imperfection above all is puzzling experts across the supply chain. Even with the most recently-developed coatings, there have been reports of canned wines generating the ‘rotten eggs’ smell of hydrogen sulphide (H2S) – which can clearly be extremely off-putting for consumers pulling the tab on their chilled white or rosé.
It does tend to be a white wine or rosé, says Sacks, in nine out of ten cases where the problem occurs. Clearly, the sulphur component here points the finger of blame at the sulphur dioxide (SO2) that every wine is dosed with in order to reduce or slow oxidation.
Wine left in direct contact with uncoated aluminium will start to generate H2S the same day, according to Sacks. The coating slows this process down, but problems can still emerge two-to-four months after filling.
“You can’t package a wine with zero SO2,” he explains. “It will smell oxidised and unbind undesirable flavour compounds. But you can minimise SO2 content by using, say, 15-to-20mg per litre rather than 30mg. We think with cans you can get away with this.”
According to the Cornell team, there is significant variation when it comes to this challenge, even among different wines with consistent levels of SO2. “I’m wondering if there are other components in the wine which accelerate these problems,” he says. “For instance, it could depend on the variety of grape.”
He adds that it might partly be dependent on alcohol levels in the wine, although problems with similar coatings do not seem to arise with, for instance, high-alcohol beers. The pH of the beverage may also have an effect. Whatever the exacerbating factors, a process of diffusion through the coating seems to be the most likely mechanism.
Increasing the weight of the coating is not necessarily the best solution, either. “The problem is that, the thicker the liner, the greater the risk of scalping – in other words, the loss of some of the flavour compounds in the wine,” Sacks states.
Coatings supplier AkzoNobel offers beverage can options from “trusted epoxy coatings” to “high-performance BPA-NI coatings”, says marketing segment director for industrial coatings Chris Bradford.
The company does not directly address questions about SO2 content as a potential problem. But Bradford concedes: “We understand that a standard 12-ounce can applied with legacy coatings with today’s processes may not ensure the required shelf-life and consumer experience for wine, and we see some interesting developments on the horizon.”
Many wineries and smaller brand-owners will be scanning that horizon with urgent anticipation. Meanwhile, Sacks at Cornell raises one further point, closely linked to the question of shelf-life in canned wines.
“In general, wine producers are used to filling once a year, which may obviously be an issue in its own right,” he says. “Bigger brand-owners are likely to do their own filling, and can package on demand. Smaller producers are less able to do that.”
However good the fit between wine and can coating, smaller brands which can produce smaller batches relying on shorter shelf-life are less likely to encounter problems with
aroma and quality.