Keeping Up with At-Home Wine Demand
How to satisfy thirsty consumers? Ship wine on overseas transport—in a bag.
At-home demand is at an all-time high.
Consumption of wine at home spiked to never-before-seen levels in the United States, thanks to pandemic protocol restrictions and increased availability of wine at grocery stores. Demand is up 32% year-over-year, rattling an industry that had previously seen the wine consumption rate staying relatively stagnant for the past decade.
Wine, wine everywhere.
There are many types of wine available to consumers. Offered in a dazzling array of packaging options, wine is now found in bottles, boxes, sleeves, Tetra Paks, plastic bottles, and even cans. There are different serving sizes, too: from single-serving pony bottles to giant 5-liter bag-in-box options.
The major difference between all of them, however, is quality. And in many cases, the bigger the vessel, the cheaper the wine. Or at least, that is the prejudice—however unfair. The tried-and-true 750mL glass bottle remains the standard for high-end wine.
Above the $13-per-bottle price point, it’s virtually impossible to find a wine not packaged traditionally. A wine bottled at the source is a sign of trustworthiness and quality, and signifies capacity for aging. The dark green glass bottle, along with its customary cork, serves to protect the wine inside from UV light damage, oxygen spoilage, and changes in temperature that might destroy the wine’s flavor.
The downside of bottles...
Glass is extremely heavy. Bottles are bulky and make packing inefficient. Therefore, containers are shipped full of dead space. Bottles are also fragile and need special handling to avoid breakage and lost product. Wine takes many steps to get from a European country (say, Italy) to the US. There are long wait times at customs, shipping delays, and routes that send the wine through extremely hot or cold temperatures.
Many more perils may threaten a wine at the importer and distributer level once it arrives in the States. Estimates show that wineries often lose 15% of each international consignment. This only increases the cost of higher end, traditionally-bottled wines as wineries try to buffer the potential for lost revenue.
What options do producers of short-lived, consumer-driven wines have to protect their wines during shipment?
It all comes down to shipping.
Importers of bulk wine have devised a solution: ship their wine inside a giant, airtight bag. Known as a Flexitank, each bladder resembles a 20-foot-long version of a Space Saver. Except instead of using a vacuum to remove air, liquids are pumped into the Flexitank before shipping. Each polyethylene bag can hold up to 24,000 liters, nearly 2.5 times the typical volume of a shipment on 750-mL bottles inside an insulated 20-foot container (9,900 liters). Flexitanks are three layers thick, impervious to oxygen, water, and organic contamination.
Wineries can also choose to ship wine in a reusable, 26,000 liter ISO (International Organization for Standardization) steel tank, but these are more expensive to operate than Flexitanks. Steel tanks must also be sent back to the point of origin, while Flexitanks can be easily dismantled on the spot.
Each method allows for enormous amounts of wine to be moved from place to place. Flexitanks can carry the equivalent of 32,000 bottles, while the ISO steel tank can carry up to 35,000 bottles. A typical truck packed with standard 750mL bottles will generally only hold 12-13,000 bottles per shipment.
How does bulk wine get to my table?
When the wine reaches the destination country, it’s shipped to a winery or bottling facility to be individually packaged and made ready for purchase by the consumer.
By bottling and packaging closer to the place where the wine will be sold, it increases the likelihood that materials will be sourced from locally recycled material. As many countries tighten restrictions on imported materials, sourcing local materials is a key factor in streamlining the wine production process and offering a better price point to consumers.
The Flexitank method is preferred by wine labels who wish to source large amounts of wine meant to be consumed shortly after bottling. While bulk shipping is usually correlated with low-quality goods, this is not always true with wine. By packaging and shipping wine in bulk, quality wines that are not destined for bottle aging can experience an extended shelf life until they are bottled and consumed at the destination.
Most bulk wine is sold in bulk format. Think big: bottles 2L in size or greater, as well as bag-in-box offerings that are rapidly improving in quality as large suppliers are challenged by independent startups offering greater value.
Additionally, there is a new surge of demand for RTD (Ready-to-drink) options that often appear in cans or Tetra Paks. RTDs typically contain 375mL servings that are easier for consumers to enjoy in non-traditional settings and to drink wine in smaller, more responsible portions.
Shipping more wine, saving the environment.
Initially, Flexitanks were not seen as a 100% sustainable method to ship wine because they are single use. Each Flexitank had to be broken down and buried in landfills or incinerated. Both disposal methods released chemicals into the environment and did not appear to lessen the overall environmental impact of shipping wine.
However, such concerns were quickly addressed and now Flexitanks claim to be part of the circular economy. Empty bags are recycled or melted into other forms of plastic, greatly reducing the footprint of the Flexitank. One of the main providers of Flexitanks for wine, Hillebrand, is leading the way in proper installation and utilization of this bulk method of transport, as well as environmental responsibility. Shippers of bulk wine can now track each container through a mobile phone app to gauge each container’s carbon footprint during its intercontinental journey.
Experts expect a 30% increase for Flexitank orders in 2021 to accommodate US consumers’ thirst for affordable, crushable wine.
Is bulk wine bad for the wine market?
Certainly not. As inventory dwindles due to below-average harvests in 2020, more supply will be needed to answer rising consumer demand. This should be a cause for celebration in the wine industry. The bulk wine trade offers a number of practical solutions to common problems faced at wineries: to source varietals that are not available locally for a blend, to move excess inventory, or to redistribute wine that was not picked up by a buyer as agreed.
There is a common misconception that trading in the bulk wine market could tarnish the reputation of a winery already producing award-winning wines under their own labels. This predicament creates an opportunity for new labels and emerging brands to source high-quality wine for their own use. However, there is a reason the bulk market is a “whisper market”, and it’s because of the image issues attached to bulk wine.
While certainly lacking the romance of a traditionally-bottled wine, bulk wine offers an answer to the age-old predicament of GenZ and Millennial wine consumers: how to afford drinking wine every day.
By judiciously offering lower-cost, responsibly-sourced offerings, the wine industry could potentially eke out a greater stake of the US alcoholic beverage market by launching new, private label brands. It’s an intriguing concept that should certainly be investigated.
No avenue is off-limits when it comes to wooing younger consumers away from easy-going offerings like hard seltzer and hard kombucha that are currently eating up wine’s share of market.
