Will Cans Bring Wine Out of the Cellar?
Jul 24th 2013 5:44PM
Updated Jul 24th 2013 5:46PM
Sacre bleu! If cans are the salvation of craft beer, are they good enough for wine, too?
It's actually been a long time since the fermented grape drink was solely the product of a corked glass bottle, as the industry was set on its head by the introduction of the twist-off cap, while wine-in-a-box eliminated the bottle altogether. Although canned wines have been around for about a decade, you probably won't find too many sommeliers sipping vino from a can, but it may help spur more sales by allowing consumers to take wine to more places than it's currently allowed.
That was one of the primary motivators behind Boston Beer finally serving its flagship Samuel Adams brand in a can. Because public places like beaches and ballparks prohibit bringing glass bottles to the venue, it was limiting sales -- though there was likely a lot more than that behind falling sales of its premier brand. And the brewer doesn't really think it will have many new drinkers bellying up to the bar for its beer, but rather the can gives its current brew lovers (count me among them) more opportunities to enjoy their beer.
Craft beers in general have been more than willing to, er, bottle their brews in cans without loss of taste, but there's been a much longer history of beer in a can, so the hurdle wasn't as high, even among beer snobs. Vintners, on the other hand, have a much taller barrier to surmount, though boxed wine has probably knocked it down a peg or two.
According to a recent BusinessWeek article, boxed-wine maker Franzia is the world's best-selling brand, though it has a less than 1% share of the market globally (but 6.5% in North America).
Yet wine producers are facing some significant challenges these days. Constellation Brands , the largest wine producer in the world and the biggest premium wine producer in the U.S. with more than $1.7 billion in annual sales, is only expecting growth to match the rise in the overall industry of the mid-single digits. It's actually looking for the Modelo beer business that it acquired from Anheuser-Busch InBev to drive its growth in the future.
Part of the problem is the changing tastes of consumers. In addition to craft beer's popularity, hard ciders and teas are gaining popularity, too. Boston Beer saw depletions grow 16% last quarter primarily because of the emphasis it placed on its Angry Orchard cider and Twisted Teas, and Bud recently introduced its Stella Artois Cidre brand. Last year, both SABMiller and Molson Coors acquired cider maker Crispin through their MillerCoors joint venture.
The brewers don't have much fear of diluting beer sales, though, because cider is seen as an alternative to wine, not beer. But innovative packaging such as canned wine may also allow wine producers to maintain, if not gain, drinkers. Spirit Airlines, for example, recently announced it was going to start serving wine in cans along with the little nips bottles it currently offers.
Wine has enjoyed some heady growth in recent years, and even in the Great White North, its market share has jumped from 24% to 31% between 2002 and 2012. So if vintners can get wine onto beaches and ballparks just as the brewers hope, they may yet have something to pop their corks over.
The article Will Cans Bring Wine Out of the Cellar? originally appeared on Fool.com.Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Boston Beer and Molson Coors Brewing. It owns shares of Boston Beer and Spirit Airlines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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