SPECIAL REPORT: Bulk shipping and filling

Justin Knock explains how and why the industry’s attitude to and utilisation of bulk shipping has improved dramatically

 

Nearly ground out of existence a decade ago, the British bottling industry has enjoyed a remarkable resurgence over the past ten years as the process has improved and cost benefits have turned producers’ heads. As a result, the industry’s attitude to and utilisation of bulk shipping has improved dramatically.

Winemakers and EU retailers alike have become much more switched on to the commercial advantages, environmental benefits and thus marketing kudos that bottling at market destination can bring. While there does remain a segment of the market, namely small batch and luxury wines, for which this supply chain process currently seems both impractical and unfitting, this is ironic because fine wine is what kept the business of bulk shipping alive for generations.
 
A brief history

Bulk shipping has been a part of the global wine trade since people began drinking the stuff – there was no alternative route to market before glass bottles came along.
 
The Greeks, Etruscans, and Romans used amphorae and barrels to transport wine long distances to locations where it was in demand. During medieval times and through to the Victorian period, butts for sherry and pipes for port were common transport vessels, while the arrival of the railroad brought a new era of bulk wine transportation from the Languedoc to Paris and other European destinations. Now the liquid is moved by massive cargo ships in special containers, 24,000 litres or so at a time.
 
Even the great wines of Bordeaux and Burgundy have long history of being shipped in bulk, with many a reputation built on the quality of the merchant bottler in London, Dublin or Hamburg, as much as it was on the proprietor’s name.
 
Chateau Mouton Rothschild revolutionised the wine business with estate bottling in 1924 (made possible by the availability of consistently high quality, affordable glass) in an effort to guarantee the authenticity of what went into the bottle. Fraudulent behaviour had plagued the wine business during the long period of chronic undersupply that followed the devastation of phylloxera across Europe in the late 19th and early 20th centuries.
 
The practice of shipping fine wine to market for bottling continued into the 1970s, but by then estate bottling was becoming standard for wines at all levels, marketed as an indicator of authenticity, integrity and therefore quality. Bulk shipping didn’t disappear though, and it still remains the mechanism for balancing the supply of and demand for unfinished wines the world over.
 
While estate bottling is the current industry standard, time may see it remembered as a mass-market anomaly of the 20th century, and in future generations the preserve of small batch and luxury wines, not the ‘everyday’ wines most often consumed.
What’s changed?
In a nutshell, the past ten years have seen dramatic changes in global economy, technology and attitude towards sustainable working practices, energy and the environment.
 
It is also a possibility that the UK may have reached a saturation point in terms of estate-bottled wine imports. Until 2009, the British pound enjoyed strong purchasing power against most currencies and an affluent middle class bought imported estate-bottled wine in ever increasing quantities, primarily from the New World countries of Australia, Chile, South Africa, the US and New Zealand. Total off-trade retail sales hit just over 100 million 9 litre cases per annum following 20 years of steady, and at times spectacular, growth.
 
Of course, the pound is now far weaker against the Australian and US dollars and the Chilean peso, the middle class has been ‘squeezed’, duty increases have accelerated dramatically and VAT has increased, while the cost of oil for transport and raw materials for glass, labels and cartons has also leapt proportionally higher. In essence, the UK trade has been desperate to reduce the cost of wine.
 
Two separate investments changed the course of the industry and the way we drink today. In 2005, Cobevco invested £320 million in a state-of-the-art integrated glassworks and bottling facility in Cheshire, while in 2009, Constellation Wines, at the time the largest wine company in the world, commenced operation from a new £85 million filling plant near Avonmouth. In a stroke, UK bottling capacity increased significantly and has since continued to grow. Cobevco alone now has the capacity to package more than 28 million 9 litre cases per annum, more than 20 per cent of UK wine consumption.
 
Significant investment has also been made by other leading UK bottlers and even retailers are getting in on the act; Asda has built its own bottling facility through sourcing arm IPL and now fulfils much of its own needs in this way.
 
In less than ten years the UK has developed enough infrastructure to bottle around 70 per cent of the off-trade market for wine.
 
The benefits of bulk shipping

Bulk shipping has the potential to save producers and suppliers around £2 per 9 litre case, depending on the scale of business. Cost benefits accrue through a combination of reduced Commons Customs Tariff duty, the improved load-yield of larger containers and access to more competitively priced dry goods.
Bulk shipping brings access to new markets, particularly the lucrative Scandinavian monopoly markets where 3 litre bag-in-box formats are extremely popular, and where minimum shelf-life requirements make it almost impossible to package those wines at source. Government monopoly buyers in Scandinavia are actively interested in non-glass packaging innovations such as PET, tetra-pak and pouches, as well as light-weight glass options (the 300g bottle developed by Cobevco, for example, is 40 per cent lighter than the average glass bottle used for wine), many of which are only available within the UK.
 
Wine shipped in bulk also enjoys much better thermal inertia than wine shipped in glass. Trials have indicated that south-to-north shipping leads to temperature increases in bulk of, at most, 10-15˚C, while the temperature of containers with finished goods, i.e. already-bottled wine, can exceed 60˚C. In other words, two distinctly different sets of maturation conditions resulting in large bottle-to-bottle variation.
 
Such extreme temperatures can persist for two to three weeks (especially with ‘slow steaming’ practices now commonplace) as vessels cross equatorial latitudes. Potential detrimental effects include accelerated ageing, loss of fruit, premature browning and reduced levels of protective sulphur dioxide. Furthermore, the high humidity, high temperature conditions of the tropics can induce ‘container rain’ once the ship returns to higher, cooler and drier latitudes, damaging cartons and encouraging the growth of mould and mildew.
 
Limitations
Bulk shipping and in-market bottling is not suitable for every wine, though. Luxury products, where origin-based marketing messages are key to pricing power, will most likely always be estate bottled. In some cases, legal restrictions prevent bottling outside the region of production e.g. Rioja. Certainly, high quality sparkling wine made in the champagne method obviously cannot be bulk shipped and, in fact, many other sparkling wines are also excluded for similar reasons.
 
Interestingly, lightly petillant wines such as Moscato are actually good candidates for bulk shipping, as the dissolved carbon dioxide confers some oxidation protection and gentle carbonation can be carried out just before bottling. There is also a philosophical, if not a volumetric, compatibility between natural wines and market bottling, given the emphasis on freshness, speed to market and low environmental impacts. Sweet wines carry a higher risk, with refermentation during bulk transportation a real danger, and yet sweetened wines for the Nordic bag-in-box markets and Californian white Zinfandel blends are now routinely shipped thanks to meticulous wine preparation at origin, the use of sterile conditions to load the wine, and very low oxygen transmission rates in modern flex-tanks that make it very difficult for yeasts to grow in transit.
 
Finally, but not exhaustively, many artisan and small-batch wines that lack scale may at first glance seem poor candidates, but even these can be shipped in small, 1,000 litre pallet tanks. What becomes obvious is that few wines, from a technical or logistical standpoint, are actually unsuitable for bulk shipping. In the end it comes down to marketing and trust.
 
The mind of the winemaker

It’s unsurprising that most winemakers enjoy their work at vineyards tasting grapes, or at the blending bench fine tuning their wines each year. Yet it’s a rare winemaker who professes to relish time spent at the bottling line, overseeing their hard work safely delivered into its final destination – the parental equivalent of taking the kids to school for the very first time.
 
The parenting analogy is apt, for the simple reason that ‘raising a wine’ from the vineyard to the bottle is generally creative, bridled in optimism, and most definitely hands-on, whereas bottling can be a nerve-wracking experience that represents the end of childhood for both wine and winemaker. It’s time for them to let go.
 
Perhaps the greatest limitation to bulk shipping is the trust that needs to be built between the winemaker and the bottling partner in the UK. But where few tread, others will follow and given time we may no longer pursue the environmental folly of shipping millions of tonnes of glass around the world for wine that is opened and consumed with a week of purchase

Justin Knock is the official winemaking consultant at specialist bottler Cobevco, a market leader in the bottling of wines, beers, ciders, spirits and soft drinks at its purpose-built plant in Elton, Cheshire. The company works with producers, importers and merchants from all over the world.

23 March 2014 - Justin Knock MW Cobevco, winemaking consultant