Jumpin’ Backlash

It’s no surprise that the quality and packaging of bag-in-box wines have come on by leaps and bounds. Now that consumers are adopting boxes for their everyday drinking wines, the BIB sector has a real spring in its step, says Penny Boothman

I’m sure we all have distant memories of being served a tiny Paris goblet of tasteless, oxidised plonk from a cheap and handy cask at compulsory family gatherings. But the bag-in-box sector has made enormous progress since those days. What was once Château cardboard is now premium wine.

Bag-in-box wines have a 9.4% share of the UK offtrade total light wine market by volume (ACNielsen MAT to w/e 16.04.05), which may not seem like much when you compare it to BIB’s 50% share of the Australian market or its more-than-60% share in Sweden, but Britain’s love for the cardboard cube is growing ever stronger. The BIB sector is, in fact, growing at a faster rate than the light wine market as a whole, increasing 9.7% by volume over the last year, compared to the total light wine market’s 5% rise. Unsurprisingly, perhaps, the rise of the BIB is even stronger in the multiple grocer sector, where it has shown a strong 11.8% growth to take a 12% share by volume of total light wine. Even in the multiple specialist sector, where total light wine has shown a slight decline of 0.6% in the past year, the BIB category was still up by 9.5%.

Northamptonshire-based Corby Bottlers bottles (or rather, bags) 15 million litres of wine a year, primarily from New World sources such as California, Chile, Australia and South Africa. Peter Roberts, the company’s commercial director, says, “One of our largest markets is actually the Swedish state monopoly. We bottle for an agent who sells into Systembolaget, which equates to around 4.5m litres, and that’s expensive product. About 64% of their market is bag-in-box, and gaining.”

Importing in bulk is a costeffective way of moving large volumes of wine, but there are other considerations. “The issue is getting the product there in a fresh condition,” Roberts says. Corby recommends a shelf life of six to nine months, depending on the product, so freshness is a big issue. A product that was filled into BIB in Australia, for example, would be nearing the end of its shelf life before it even arrived in the UK.

“The most important area of technical advancement is the improvement in transportation of the bulk wine to us in the first place,” Roberts says. “Everybody is now using these one-trip flexitanks – which are like a 24,000 litre bag-in-box.” Flexitanks not only allow the wine to travel in perfect oxygen-free, temperaturecontrolled surroundings, but they also make substantial savings. This is an increasingly attractive option for large volume producers, and some big-name brands, such as Gallo’s Sierra Valley, are filled at Corby.

Historically, the design of BIB packaging was also left up to the contract filler, with a little input from the brand owner, but now WSPC (part of the WineBox packaging company) is working as a gobetween for brand owners and fillers, finding the correct type of packaging for the brand, as well as designing the graphics.

David Aston, business development director at WSPC, is quick to point out the benefits of making the most of a wine box. “I think the number of options we and other suppliers now offer, like gold inks, UV varnishes or embossing, give brands a great chance to differentiate themselves on shelf. A brand owner may say, ‘Well, my brand is a particularly highquality wine so I can afford to have a couple of extra bits and make it stand out on shelf’. It’s most definitely an excellent marketing tool, primarily because there is such a big surface area to work with.” Aston is clearly not the only one to think so as his company is working with the likes of Palandri, Western Wines, HWCG, Bottle Green and PLB.

It is still possible to buy three litres of Liebfraumilch for under £8, and the average price for a 3-litre bag-in-box wine is around the £12 to £13 mark, but many producers are now pushing boxed wines at above the £15 level. Constellation, which holds 50% of the UK bag-in-box market, thanks to its Stowells, Echo Falls and Banrock Station ranges, is now presenting Hardys Nottage Hill in a 2-litre box on a trial basis. Clare Griffiths, the company’s vice president, brands marketing, says, “I think premium wine is an area where there are lots of potential opportunities to hit critical price points. Because you’re not offering so much wine [in a 2-litre box] you can hit the critical price point of £20. Once you go over that, consumers start questioning whether they want to spend that much on a BIB.”

Nowhere is it written in stone that a wine box must contain three litres of wine, so the alternative of offering less wine in what is now a popular format for a more attractive price point is one that is likely to appeal to other premium brand owners. Griffiths says, “The box market is occasiondriven for things like parties and barbecues, but also people are keeping it for everyday tippling. It’s good because it’s convenient and it lasts a long time, but the bad news is that you don’t know how much you’re drinking! Consumers put the box in the fridge and have a glass a night and the freshness stays for six weeks whereas with a bottle, once it’s open, you’ve got to use it within a couple of days.”

Asda’s wine selector, Sara Brook, has also noticed the shift to premium. “Most BIBs sell well at under £15 for three litres but, increasingly, more packs are being proposed to Asda for around the £20 mark. Greater understanding and care is resulting in better quality,” she says. “By understanding the composition of the wine, the traditional ‘belt and braces’ approach to filtration has relaxed. Asda ran trials on our South African red to reduce filtration and improve quality and colour; it was very successful and is now standard practice.”

Category growth shows that this improvement in quality is attracting more consumers to the bag-in-box category. Brook says: “There is an element in both the customer base and the trade who think BIB is poor quality. However, at Asda we have seen sales grow organically without heavy promotional activity, suggesting customers like the convenience of BIB and are satisfied with the quality. And sales show that BIBs are now part of an everyday shop rather than specifically chosen just for parties.”

The acceptance of box wines for everyday drinking has not escaped the notice of producers, and Raisin Social’s Namaqua brand is the UK’s biggest-selling South African SKU. Patrick Halliday, sales and marketing director at Raisin Social, says, “It’s been going now for six years; the growth is enormous. The white box is the biggest selling box wine in the off-trade, and both red and white are growing year-on-year by 40%.” The box wine’s success means that it will be launched in bottle later this year. Another Raisin Social brand, Goiya, that was originally in bottle is now moving into the box format. Halliday says, “Goiya is a bottle brand that then went into box. The interesting thing is that Namaqua has been so successful that a lot of the retailers have been asking us when it’s going to go into bottle.” Unlike many other bag-in-box wines, Namaqua is boxed at source with state of the art equipment, which Halliday believes gives it full traceability. “There are almost a million cases of Namaqua sold a year in the UK now,” he says.

Far from resting on his laurels, Halliday is looking at other ways to grow the category, including new routes to market and range extensions. “There are quite a lot of distribution points we could gain as well. It’s not in the on-trade at all and that’s something we’re looking at doing, as the consumer does recognise and appreciate the value offering that it has. We have single-varietal products which have been successful as well, and that’s something we’re developing, like Chardonnay and Shiraz, and there’s also an organic bagin- box from Namaqua.”

Improvements in quality have meant that wine boxes are no longer the sole preserve of low-quality wines, and brand owners are beginning to realise their potential as a marketing tool. There are more opportunities in the cask category than ever before; so it pays to think outside the box.