THINKING INSIDE THE BOX 2004

CAROL ANGRISANI

Aseptic containers, vacuum-sealed bags, screw tops -- even aluminum cans -- would not have been associated with quality wines a few years ago.

But times, and wine consumers, have changed. The convenience trend sweeping the industry has readied beverage shoppers for new packaging innovations -- and wine producers are responding.

Catering to consumer demand for products that are easier to open, use and store is just one reason for the changes. Another reason is not so obvious: A California wine grape glut has prompted producers to find ways to make wine more accessible to consumers.

Enter boxed wine, or -- ahem -- "cask" wine. Used in Europe and Australia for years, boxed wine once was perceived in the United States as a low-cost alternative to traditional bottles. Now, though, as premium and award-winning selections enter the market, boxed wines are gaining more respect.

"Boxed wines are now considered to be legitimate entries in the wine market," said John Gillespie, president of the Wine Market Council, St. Helena, Calif., a non-profit wine association representing the U.S. wine industry.

Sales figures show that boxed table wines generated $195.4 million in dollar sales in supermarkets for the 52 weeks ending Oct. 3, a 7.2% increase from the same period a year earlier, according to Information Resources Inc., Chicago.

These wines might be identical in taste and substance as their bottled brethren, but their delivery systems are far more advanced. These wines typically feature bag-in-box technology: As the wine drains from the spigot, an interior bag collapses around the remaining contents so that air does not reach the wine. This helps the wine stay fresh for about three to four weeks, compared to the two- or three-day life expectancy of bottled wine.

"Boxed wines offer customer-focused benefits such as longer shelf life, user-friendly packaging and overall value," said Olivier Kielwasser, director of beer, wine and liquor, Giant Eagle, Pittsburgh.

The boxed wine segment is showing such promise that major retailers want to get involved. Target, Minneapolis, for instance, sells a private-label boxed wine called the Wine Cube. Positioned as a premium alternative to boxed wines, the wine comes in Pinot Grigio, Chardonnay, Shiraz, Merlot and other varietals. A 3-liter box sells for about $15.99, and is guaranteed to stay fresh for up to six weeks. The retailer's Pinot Grigio recently won the Private Label Manufacturers Association's 2004 Salute to Excellence Food & Drink award in the alcoholic beverage category (see PLMA supplement inside SN, Oct. 25, 2004).

On the national brand side of the business, many wineries are converting some of their lines to boxes. Among them is Delicato Family Vineyards in Napa Valley, Calif., which launched the "Bota Box," a portable stay-fresh wine box, last year. Available in 3-liter sizes that carry a suggested retail price of about $18, Bota Box features Delicato's Shiraz, Merlot and Chardonnay varietals. Another notable entrant is Black Box Wines, Gonzales, Calif., which offers a line of super-premium wines in a 3-liter box.

Save-Mart Supermarkets, Modesto, Calif., just authorized a direct-store-delivery test of Black Box wines in 10 of its 132 stores, according to Mark Endres, the retailer's beer, wine and liquor buyer. Depending on how it performs, Black Box may be added to other stores.

"I thought the packaging was unique and that it might do well in our stores, so we decided to give it a try," Endres told SN.

Save-Mart already carries two other boxed wines: Franzia and the Peter Vella brand from E&J Gallo Winery. Peter Vella is performing particularly well, posting double-digit sales growth over the last year. Endres attributes this to the fact that consumers are demanding convenient and affordable, yet quality wines.

"Consumers have figured out that boxed wine is a great value," Endres said, noting that most boxed wine sells for less than $10.

At Giant Eagle, there are between 10 and 15 different boxed varietals per supermarket, including Cabernet, Chardonnay and Chianti. Stores carry three, top-selling 5-liter brands: Franzia, Almaden and Peter Vella. Based on market area demographics and customer demand, several 3-liter brands are also stocked.

Giant Eagle is witnessing a strong demand in boxed wine, with same-store product movement showing double-digit growth. Kielwasser attributes the increase to numerous factors, including more aggressive retails; overall value compared to jugs; and publicity about the health benefits associated with moderate wine consumption.

Jungle Jim's, Fairfield, Ohio, carries several boxed wines, including Franzia, Almaden, Peter Vella, Black Box and even imports like Hardys from Australia.

"All boxed wines sell like crazy," said David Schmerr, Jungle Jim's wine and beer director.

Schmerr said boxed wines will never be the "best wines in the world," but provide consumers with taste and value, traits that have helped bring new users into the category, he said.

"There are many beer and pop drinkers that can be converted into wine drinkers if the right product is available," Schmerr noted.

Tom Pirko, president of Bevmark, a Santa Barbara, Calif.-based consulting firm, said it makes sense that more consumers are accepting boxed wine.

"Everyday wine drinkers are demanding convenience, and resisting anything that's too fancy or difficult to handle or open," Pirko said.

Indeed, portability plays a key role. Most boxed wine is marketed for everyday use, such as for picnics and other outdoor events where a glass bottle is prohibited or impractical. At the same time, winemakers are testing new sizes, including the 3- and 1-liter and even 500-milliliter box.

"Although the boxed wine category has been historically limited to a small customer group, new customers continue to be reached as a result of new brands and flavors being offered in smaller packages, such as the 3 liter vs. 5 liter," Kielwasser said.

Vintners are also playing with the packaging materials themselves. Tetra Pak, a Vernon Hills, Ill., packaging company, teamed with Three Thieves winery in Napa to market a Bianco wine in a 1-liter "Tetra Brik" aseptic carton. The wine is marketed under the Bandit brand, and sells for about $5.99.

Tetra Pak also partnered with Canandaigua Wine Co.'s Almaden Vineyards to launch Almaden Red Sangria in a "grab-and-go" 500-milliliter "Tetra Prisma" aseptic carton with a pull-tab opening. Each carton contains about three servings, and carries a suggested retail price $3.49.

"Our packaging systems permit [wine producers] to expand to new occasions and new user bases," said Jeff Kellar, the company's vice president of strategic business development.

Canandaigua chose the Tetra Prisma to bring a new level of convenience and freshness to wine consumers, according to Jon Guggino, brand manager for the vintner.

"We wanted to create a lifestyle-oriented product that delivers quality, convenience and an exciting new direction for the wine industry," Guggino said.

Canandaigua is so pleased with the packaging that it just began using it for its Vendange wine brand. The wine is now available in 500-milliliter Tetra Prisma packages in four varietals: Cabernet Sauvignon, Chardonnay, Pinot Grigio and Shiraz. Packaging from Vendange is slightly different from that of Almaden in that it features a plastic screw cap, rather than pull-tab opening.

Canandaigua's use of the screw cap reflects a movement toward cork alternatives as the wine industry wrestles with an age-old problem, where a chemical compound found in corked wines can cause some wine to become musty or moldy. According to some estimates, about 10% of corks are tainted.

While synthetic corks have emerged as one option, wine producers are experimenting more with alternative closures. Gillespie of the Wine Market Council said screw caps are convenient, and avoid the problem of tainted corks, thereby improving the flavor and taste of wine. Several well-known wine producers support the screw cap. Among them is Bonny Doon Vineyard, Santa Cruz, Calif., makers of Ca' del Solo Big House and other brands. The company has transferred most of its portfolio to screw-cap closers.

Likewise, Pepi Wines, part of Kendall-Jackson Wine Estates in Napa, just announced that all its wines now come packaged with a screw cap, rather than the traditional cork. Selections include Pinot Grigio, Chardonnay, Sauvignon Blanc Shiraz, Merlot and Cabernet Sauvignon.

Innovation isn't stopping there, however. Some wines are now available in an aluminum can.

Niebaum-Coppola Estate Winery, Rutherford, Calif., owned by film director Francis Ford Coppola, offers Sofia mini Blanc de Blancs, sparkling wine packaged in single-serve 187-milliliter pink cans. Each can comes with its own straw. The sparkling wine is named after Coppola's daughter, filmmaker Sofia Coppola.

Geared to women and club-goers, Sofia Blanc de Blancs is positioned as an affordable way to enjoy sparkling wine. The cans sell individually for about $5, or $20 for a four-pack. These and other packaging innovations are a positive development for supermarkets, according to Gillespie.

"Supermarkets profit from being able to offer their customers more variety in the form of diverse products, sizes and price points," he said.

Schmerr of Jungle Jim's agreed, noting the changes make wine more accessible.

"Screw caps and other packaging innovations take the mystification out of wine, and help make it enjoyable for everyone."