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250165 ENG BAN PMZA e mac 500 1130x154px ZA en

Estates migrate to bag bigger boxed wine audience

Bag-in-box has tapped its way into the hearts of wine drinkers worldwide, but could they be called connoisseurs? New industry developments suggest that perhaps, yes.

7 July 2021
in Acquisitions & evolutions
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40 Wine

Woolworths’ premium cask wine range was launched around the time boxed wine outsold bottled wine in South Africa for the first time. Bag-in-box wine globally is expected to grow to $1.9-billion by 2024 (from $1.6-billion in 2019).

Call it goon sack or papsak or its contents chateau cardboard, or summon up the retching emoji at the ‘bladder’ tag for the foil pouch, seven decades yells staying power.

It still has to fully shed its image as a downtrodden relative to bottles, but today’s BiB can be carried with pride and confidence, especially with its increasingly premium offerings. 

Think Woolworths’ new upmarket two-litre range straight from estates such as Kleine Zalze, Pierre Jourdan, Beyerskloof and Diemersdal, which have broken the glass bottle ceiling by emerging in cartonboard and sacs. 

41 Wine
Maintaining the intrinsic value of the brand is crucial when extending into the boxed format – ensuring continuity in pricing, look, feel and product quality. Woolworths expects to launch a few small extensions to the range but stresses it will be an evolution rather than a revolution because boxed-wine customers don’t enjoy big surprises.

Van Loveren Vineyards CEO Philip Retief resisted moving into BiB because of profit margins and market price sensitivity, but ultimately took the plunge for its value offering and convenience. ‘And because better quality wines are now available in boxes, younger wine-drinkers often don’t share the older generation’s reservations about boxed wine,’ he was quoted as saying. 

Rob Gower, specialist senior wine buyer of Woolworths, says the retailer’s premium range adds a modern dimension to its static offering of dry white and red boxed wine that has changed little over two decades. Covid-19 drove the launch and he doubts the brands would be on-shelf otherwise.

‘We approached certain trusted farms to participate, realising the enormous risk it would be to their brands,’ he reveals. ‘It wasn’t an automatic yes initially, but we convinced them. 

‘Maintaining the intrinsic value of the brand is crucial when extending into the boxed format. This continuity must be in pricing, look, feel and product quality. Customers are very sceptical of BiB so we had to be certain that we built brand value and didn’t erode it for short-term sales gain.’ 

The two-litre format provides good value without overly increasing the pick-up price, he continues. It also fits neatly in the fridge door. 

A News24 panel gave the wines a thumbs up on several counts. It declared there was no discernible taste or quality difference between glass and bag. ‘Chic, sleek packaging’ was mentioned, as was price (Kleine Zalze chenin blanc at R62.99 a  750ml bottle versus two-litre box at R124.99).

The brands seemingly stepped into a receptive market, current sales trends boding well for BiB according to SA Wine Industry Information and Systems. It notes that sales of bottled wine dropped 24% to 121.5-million litres in 2020, while boxed sales fell only 10% to 126.3-million – the first time boxed wine has outsold bottled.  

Collaboration is key

The pandemic provided the push, but when it came 

to  the real push, not all ran as smoothly as wine through a spout. Just before the October 2020 launch, poor box construction came to light on the automated lines of Darling Cellars, Woolworths’ filling partner. 

‘We hadn’t received completed samples to test and, unfortunately, experienced fishtailing and faults with the top flap,’ explains Marius Botha, Darling Cellars production manager. Fishtailing is lack of parallelism at the glued flap. 

‘There was no time to reprint as cartons need to dry for several days before being filled and the launch was the following week. Our machine operator, with 10 years’ experience, couldn’t resolve the issue, nor could our machine builders.

‘On industry experts’ advice, we contracted a team to rework the cartons by hand.’ With Darling having to fill thousands of boxes of Beyerskloof pinotage, Kleine Zalze chenin and Diemersdal sauvignon – about half defective – it was a daunting task, ‘but we made it,’ Marius states, adding that such challenges keep his team nimble. ‘With new packaging, most time goes on design and development, leaving minimal filling and dispatch time, so we are always ready for the unexpected.’

Shave & Gibson was among those whose advice was sought. The company has produced wine boxes since the sector became established in the years after  Culemborg turned on the tap in the 1970s and many decades before anyone dared show Haute Cabrière the inside of a foil pouch.

Willingness to help is an industry tradition, national sales manager Bill Furniss maintains. ‘When the shelves are in danger of going bare, our people step up. Our team readily investigates problems and offers a realistic and workable alternative.’

The key, says Western Cape branch manager, Elisia Oosthuizen, is openness and honesty. ‘We don’t deliver just a box, but work onsite with the wineries to trial the package and resolve issues. And we never promise anything we can’t deliver.’

Complaints such as leaking occasionally crop up, Rob confirms, but most can be mitigated through strong management and supplier quality control.

Premium explosion

He forecasts an explosion in the premium boxed category, with Fleur du Cap and Zonnebloem already having appeared, but warns that it may also be the death knell for some. ‘It’s an uphill battle to move boxed wine upmarket and South Africa consumers are extremely conservative, so we have to ensure that this doesn’t become the discount format for brands wanting to try shift volume.’

Bottle sales are likely to remain far bigger than boxed sales, he contends. ‘All our premium BiBs 

are bottled wines first and foremost and will continue to be. We invested quite heavily in awareness, but Covid buying certainly helped. I think this project created more marketing splash than true sales value.

‘BiB will grow, but it isn’t a silver bullet. In two years’ time, the market will abound with case studies of producers venturing into boxed wine without a strong strategy and killing off their brands.’ 

Bag recyclability needs attention, he adds, with EVOH better than metallised foil bags but still problematic with its multi-layer construction. 

Of the future, Rob states: ‘We may launch a few small extensions to the range and refresh our main products, but boxed-wine customers don’t enjoy big surprises, so it will be an evolution rather than a revolution.’

Click here to read in the E-mag.

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