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Metal cans overcome the wine taboo
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As the global financial crisis forces consumers to trade down and casts a heavy shadow on manufacturer profit margins, alternative wine packaging is increasingly coming under the spotlight. Following the success of bag-in-box formats and innovative initiatives that range from pouches to mini barrels, can packaging has surfaced as a potential means from which to escape the rising cost of glass bottles, while at the same time increasing one's green credentials. Accounting for 40 million units globally in 2007, metal beverage can packaging for wine registered an impressive 47% CAGR over 2002-2007, gradually overcoming taboos and preconceptions. The current economic slowdown is hence accelerating manufacturer attempts to look for ways to reduce costs and become more efficient in their distribution and manufacturing operations. Lightweight packaging is a key focus for innovation and metal beverage cans potentially hold a focal role in the process. Outside of legislative obligations regarding waste, reducing packaging weight is already leading to cost savings in terms of breakage and distribution for companies, providing a competitive advantage in today's challenging environment. Impulse purchase and younger audiences According to Euromonitor International, metal beverage can packaging for wine will witness a 17% CAGR over 2007-2012. Although partially driven by the rising cost of glass bottles, the introduction of new types of packaging is primarily intended to make wine more accessible to new consumer groups and to extend drinking occasions. Not only does the metal can format meet the lifestyle needs of younger drinkers for whom wine can be an intimidating beverage choice, it also targets single-person households and impulse purchasers. Attracting new consumers is crucial for winemakers, particularly as consumption has been declining in most mature markets. Germany, the US and Spain are expected to spearhead the trend, registering respective CAGRs of 11%, 30% and 40% over 2007-2012 in terms of beverage can units sold in the wine sector. With consumption of wine in Spain and Germany already witnessing declines, which are expected to accelerate further, with volume CAGRs of -2.2% and -1% expected over 2008-2013, it is little surprise that metal beverage cans will be one of the industry's key instruments for slowing down the decline through appealing and becoming relevant to the advancing target group of millennials. On the other hand, the buoyant volume CAGR of 3% registered over 2003-2008 in the wine segment in the US has genuinely demonstrated the success of gimmicky, entry-level variants as well as demand for approachable and non-sophisticated offerings in the country. Metal beverage cans are expected to increase their penetration in the wine markets of Australia, Russia, Colombia, South Africa and Austria, albeit still only securing a niche following until the end of 2012. The potential and highly likely success of the metal can format could then spawn further and much needed innovation in the wine segment in more traditional and conservative markets.
Wine in metal beverage cans has been around for a while but sales have always been hindered by the very low quality of available variants. One of the reasons why wine in cans is expected to start performing better is because we are seeing better quality wine going into cans and better positioning – cans as an innovative and on-the-go format rather than just economy plonk . Packaging trends report by Spiros Malandrakis, Alcoholic Drinks Analyst – Euromonitor International June 09 |
1 June 2009 - Felicity Murray
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