By Kristen Wolfe Bieler

category spotlight

With more variety, better producers and the power marketing combo of great pricing and a compelling sustainability story, it’s no wonder that this is the fastest growing category in the wine industry.

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We don’t know exactly where this recession is headed, but we do know this: People drink more wine when economic times are tough. We also know they want to pay less for it, and that they drink more of it at home than in restaurants. No category of the wine business is better positioned to reap the benefits of these consumer trends than premium boxed wines. Technically a bag-in-box (or BIB), and increasingly referred to as a “wine cask,” the format delivers quantity—one 3-liter box is the equivalent of four 750-milliliter bottles—and represents great value: boxed wines are approximately 40 percent less expensive than the average table wine.

The word “premium” is key here, as it refers to the relatively new generation of high-quality 3-liter boxed wines, not the 5-liter boxes of cheap, lower-quality wine that have defined the category for decades in this country. In fact, while growth of the 5-liter format is stagnant, 3-liter boxes were up 31 percent last year, according to Nielsen, compared with 4.4 percent growth for the wine category overall. This makes premium 3-liters the fastest growing category in the wine industry.

A Category Makeover
The Australians invented bag-in-box wines 30 years ago and today boxes account for nearly half of all wine sales in Europe and Australia. American jug producers began converting to the box in the 1980s—Peter Vella (Gallo), Almaden and Franzia (The Wine Group) lead the pack—with price tags between $8 and $12 for a 5-liter. Serious drinkers wouldn’t touch the stuff until recently, when American producers started filling them with good wine.

According to Danny Brager, vice president for Nielsen’s Beverage Alcohol team, “Wine marketers are driving renewed interest in cask wine by focusing on the smaller 3-liter package, offering premium varietals such as Shiraz/Syrah and Pinot Grigio. Clearly, their efforts are resonating with a segment of wine drinkers.”

The Premium Pioneers
Ryan Sproule could be credited with kicking off the premium box renaissance in California in 2002 with Black Box, an award-winning line of wines that retail for about $25. Black Box continues to outpace the category, growing 51 percent in the first four weeks of January alone. “It’s interesting to note that in 2005, AC Nielsen found that the premium 3-liter box category was attracting more educated, affluent and younger consumers compared to the rest of the boxed wine category,” says Sproule.

John Garaventa, brand manager for Bota Box, agrees: “The 3-liter consumer is really the 750-milliliter consumer who likes to drink wine every night, and recognizes the convenience and value of this format.” Garaventa believes many 3-liter consumers are people who have traveled to Europe and Australia—places where premium boxed wines are common—and come home looking for these wines.

Bota Box is produced by Delicato Family Vineyard and was another of the category’s earlier pioneers, first released in 2003. It is now the number-two in the category. “We’re growing faster than we have in five years,” says Garaventa, who credits progressive retailers with fueling the boom. “The geographic areas where the category does the best are places where retailers dedicated space to them early on.”

One of the most pro-boxed-wine retailers is Target, who developed its own proprietary brand, The Wine Cube, in 2003. The Cube has been so successful that the chain will be launching a new 3-liter red blend this fall, says Joshua Thomas, Target spokesperson.

The Wine Group—the leader in the traditional 5-liter category with brands like Franzia and Corbett Canyon—has introduced brands like Boho, Killer Juice and Pinot Evil in youthful packages to attract the 25 - 35-year-old consumer.

The Higher-End Players
Pushing the top edge on pricing, chef Daniel Boulud and Daniel Johnnes, wine director for Boulud’s The Dinex Group, along with vigneron Dominique Lafon, introduced a Mâcon-Villages Chardonnay bag-in-box wine called DTOUR several years ago. Packaged in a sleek cylinder, DTOUR came in at $37 for a 3-liter. “It is a great deal,” says Johnnes. “It comes out to less than $10 per 750-milliliter bottle and the wine tastes much more expensive than that.” (Due to a mechanical flaw the wine is temporarily unavailable.)

Also at the high-end pricewise is From the Tank by Estezargues, a Côtes du Rhône brand with a white and a red for $40 each.

A Longer-Lasting Wine
The freshness these boxes guarantee is part of their success, notes Lisa Pyrczak of Centerra Wine Company, who owns of Hardys Stamp of Australia: “This category was showing growth before the economic downturn—it was up 50 percent in 2007.” It’s the benefits of the box that consumers are finally appreciating, she believes.

Protected by a triple-layer air-tight plastic bag inside the box, which contracts as the contents are emptied over time, the wine is protected from oxygen and able to last at least four to six weeks after opening. Compare that to a bottle, which has about one to two days before descending down the path towards vinegar.

Creating a Smaller Carbon Footprint
“The wine industry is perhaps the most vulnerable of any food and beverage producer to ‘carbon criticism,’ due to its reliance on heavyweight glass and failure to migrate to more environmentally sensitive packages and more efficient supply chains,” says David Kent CEO, The Wine Group. “Large retailers like Wal-Mart have developed policies to reduce the burden of excess packaging and shipping. Suppliers are now rightfully tasked with providing more environmentally responsible packaging as well as reducing overall carbon emissions associated with shipping.”

A standard wine bottle holds 750 milliliters of wine and generates about 5.2 pounds of carbon dioxide emissions when it travels from a vineyard in California to a store in New York. A 3-liter box generates about half the emissions of a single 750-milliliter bottle. Switching to the bag-in-box format for the 97 percent of wines that are made to be consumed within a year would reduce greenhouse gas emissions by about two million tons, or the equivalent of retiring 400,000 cars. Also, boxed wines create 85 percent less landfill waste than traditional 
glass packages.

A Foodservice Future?
DTOUR was featured on by-the-glass programs throughout New York City and available by the carafe at DB Bistro (a Boulud restaurant). “We promote this as an ideal wine for restaurants because it keeps fresh for so long, and is an ideal first wine of a meal,” says Johnnes. Yet for many, it remains an uphill battle, says Garaventa, who sees a lot of restaurants getting “hung up on how to present the wine.”

Bota Box has made headway in restaurant kitchens, however, as many chefs move away from 18-liter cooking wines that don’t complement the food. “Chefs don’t want glass in the kitchen, but many accounts aren’t strictly interested in the cheapest wine available,” says Seth Appelbaum, director of national accounts, Trinchero Family Estates. Trinchero produces a wine in tetra-pak, a lightweight, recyclable material that is also used for chicken broth and soy milk.

While tetra cartons are in a different category from bag-in-box, they share many of the same advantages when it comes to shipping costs and the environment, as well as in foodservice use. Trinchero’s brand, Bandit, has been adopted by the Levy Restaurant Group in Chicago, Kimpton Hotels and Restaurants as well as David Burke’s restaurant in Las Vegas.

We’ve just seen the tip of the iceberg, in terms of boxed wine’s potential, believes Garaventa. “We’re five years into this and there is still a big misconception about what boxed wines are. When I am at tastings, I see people reluctantly try these wines and become totally surprised by how good they
taste. In the end, their quality will drive 
the growth.” |SFM|

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