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Wine in cans: growth in retail sales but what can it mean for Australian exports

Market Bulletin | Issue 175
Photo: Adobe Stock
24 Sep 2019
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Wine in cans is an emerging category that is seeing growth in consumer sales in Australia and overseas, thanks to its versatility, affordability and convenience.

Canned wines only represent a small portion of wines sold, with growth in the category coming off a small base.

In Australia, off-trade sales data from IRI Market Edge MAT (moving annual total) to 30/06/2019 indicates that canned wine represented 0.2 per cent of retail value and volume in the year ending June 2019. This result was similar in the United States of America (USA) off-trade, with retail value and volume representing 0.4 per cent of total off-trade sales according to IRI Worldwide.

Figure 1: Proportion of off-trade retail sales by volume in the USA and Australia

Sources: IRI Worldwide; IRI Market Edge MAT to 30/06/19

Australia’s uptake of canned wine has experienced significant growth in the past year

While wine in cans is not a new form of packaging, it was only in early 2018 that it increased in product availability and mainstream channel access across Australia. This timing was a result of the the growth in other international markets and improvements to packaging technology to increase shelf life.

However, at the time that this article was written, there were around 50 canned wine products available online in Australia as opposed to the thousands of products in 750ml bottles.

Wine packaged in a can has the lowest purchase consideration rate of the alternative pack formats for wine according to a Wine Intelligence study undertaken in 2018. But the study showed that consideration is higher among younger generations, with people aged between 25–34 more likely to consider buying wine in a can at 45 per cent. This higher consideration is because canned wine, with its sleek and attractive packaging, offers many of the attributes younger generations are looking for such as ‘something with bubbles’ and ‘something different’, highlighted in the market bulletin What do millennials want for Christmas.

Figure 2: Packaging consideration by age bracket

Source: Wine Intelligence: Wine packaging formats and closures in the Australian market April 2018 – Note: Red – statistically higher than average; Blue – statistically lower than average. Grey shading – denotes low sample sizes.

Purchasing wine in a can on the other hand was much lower than consideration at 2 per cent for Australian regular wine drinkers and 4 per cent for those aged between 25–34 years. This is expected to increase as awareness grows and it moves from early adopters to the next stage of the product life cycle. Domestic off-trade sales data from IRI Market Edge (MAT to 30/06/19) highlights increasing demand, with triple digit growth recorded in the past financial year.

Trending wine styles, that are light and versatile are well suited to cans. This is seen in off-trade sales with the most popular style and variety of canned wine by value in year ending June 2019 being Prosecco, followed by sparkling Moscato, sparkling rose and sparkling white.

Figure 3: Top 8 canned wine style/varietal volume sold in the domestic off-trade

Source: IRI Market Edge MAT to 30/06/19

The success of canned wine in the USA has led the way for the rest of the world

In the USA, canned wine sales have grown exponentially in the off-trade over the past five years.

IRI Worldwide currently have ‘wine in can’ sales at 540,000 9l case equivalents in year ending June 2019, up 35 per cent on the previous year. Retail sales value was US$48.5 million. While grocery stores were the most common channel for canned wine sales, there was larger year-on-year growth in the convenience store channel.

Figure 4: Total USA off-trade sales of wine in cans
Figure 5: Total USA off-trade sales of wine in cans by channel breakdown (year ending June 2019)

Source: IRI Worldwide

The majority (97 per cent) of the canned wines sold in the off-trade were produced in the USA with the most popular regions of origin in California, Oregon, Washington and Colorado. The only imported canned wines recorded by IRI Worldwide were from France, New Zealand, Italy and Spain. Up until recently, there have been no exports of Australian wine in 250ml cans to the USA.

Wine Intelligence reports that wine in cans is becoming popular in the USA due to four key trends: value for money and quality, convenience, sustainability and millennial appeal. This last trend is similar to Australia, with younger USA regular wine drinkers more likely to purchase alternative packaging formats – including wine in a can – at 8 per cent compared to the overall average of 3 per cent. Purchase consideration of those aged 21–34 years was also higher than the average at 49 per cent compared to all USA regular wine drinkers of 34 per cent.

Figure 6: Packaging purchase by age bracket

Source: Wine Intelligence US Landscape Report October 2018

Canned wine in the UK shows greater potential with younger generations and women

Canned wine has been gaining traction in the United Kingdom (UK) since 2016, according to media reports. However, there appears to be no official data available on canned wine retail sales to confirm this.

The range of products available has expanded greatly in the past year, with several new products launched in the off-trade as consumer minds broaden and become more accepting of drinking quality wines in something other than a glass bottle. With alcohol moderation also being a hot topic in the UK, especially for younger drinkers, the portion control offered from a can may appeal.

Wine Intelligence’s report Wine packaging formats and closures in the UK market (published in April 2018) indicates that there is future potential with wine in cans, despite not being widely available and low purchase rates. But they have the highest rates of conversion to purchase and show greater potential with younger generations and with women more so than men.

Figure 7: Profiling of those who would consider purchasing wine in a can (250ml)

Source: Wine Intelligence

Some rejection was reported due to associations of cans with non-wine drinks and reduced quality. But this will change as more quality wine brands, other than supermarkets, enter the market. Perceptions will also continue to change with exposure in the UK on-trade with one English brand launching their range in March 2019.

Like the USA, Australian wine is not exported to the UK in 250ml packaging.

Australia exports wine in cans to a number of markets, but this has recently declined

Exports of Australian wine in a can (based on packaging size of 250ml) made up more than two thirds (70 per cent) of alternative packaging export volume in year ending June 2019.

Exports of canned wine peaked in year ending February 2019, but have since been in decline landing at 125, 274 250ml containers with a free on board value of $3.3 million. Despite the recent decline, there has been a positive long-term trend in export value since year ending June 2014.

It is important to keep in mind that this result does not take into consideration any bulk wine that is later packaged into cans in market.

Figure 8: Australian export value of wines packaged in 250ml can containers and alternative packaging

In 2018–19, Australia exported wine packaged in 250ml can containers to Japan, Canada, New Zealand, Brazil, mainland China, France, Singapore, South Korea and recently to the USA.

Japan is the largest destination for Australian exports in 250ml packaging, worth more than $2 million in 2018–19. Wine in cans makes up nearly all (98 per cent) of the alternative packaging exports to Japan in value, but 5 per cent in total packaged wines. As mentioned in the November 2017 market bulletin on alternative packaging, the acceptance of wine in cans may be due to Japan’s love of vending machines, with one machine for every 23 people, or 5.5 million.

Compared to 2017–18, there were declines in value and volume across all markets except for Brazil, mainland China and France. With wine in cans being a fast-growing emerging category, the export data is subject to volatility as companies test and adjust their export strategies.

Figure 9: Australian export value by market

This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.

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This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.