Kendra and Sarah’s presentation about Maker in class highlighted the value that new packaging can bring to the wine industry. Canned wine seemingly eliminates many of the burdens of the bottle. Through widespread implementation of cans and the elimination of glass, wines would be less fragile and have lower shipping and production costs. Furthermore, aluminum cans have smaller carbon footprints and can have more recycled content than any other beverage container (approximately 68%)1. It has been discussed in other posts that producers may not want to see their high-quality wines put into cans, and while I agree, I think it is important to acknowledge that consumers may also be very slow in their adoption of cans, or other sustainable packaging, in lieu of traditional glass bottles.
A paradox persists when it comes to green consumption, with few consumers who claim to value eco-friendly products actually purchasing eco-friendly products. One survey found that 65% of people want to buy “purpose-driven brands,” but only 26% complete such purchases. Furthermore, millennials are often the demographic that desires more purposeful and sustainable products2. Given the wine consumer demographics we’ve discussed at length in the course, which highlight the growing influence of millennials while also acknowledging the continued dominance of older consumers, I do not see canned wines penetrating the mainstream anytime soon. If anything, I think it will be a gradual process, as the Maker founders echoed in class when they mentioned that the baby boomer market is slowly fading away. I believe baby boomers, and even Generation X consumers, are unlikely to adopt new wine consumption habits after becoming accustomed to traditional consumption over many decades. Thus, it will likely take until the majority of Generation Z reaches legal drinking age for canned wines to leave a lasting impact on the marketplace, especially when coupled with the disconnect between consumers’ support of green products and actual purchase of green products. This disconnect will also hopefully become less apparent over time.
Despite the potential lag, there are ways to accelerate the process of popularizing canned wine. First, social influence must be leveraged. A 2015 study on nudging sustainable consumption found that telling online shoppers that other people were buying eco-friendly products led to a 65% increase in making at least one eco-friendly purchase3. A 2012 study on nudging hotel guests found that telling buffet diners that not taking too much food at once and returning for seconds was normal led to a 20.5% decrease in food waste4. Thus, it would be beneficial if wine influencers, such as Alder Yarrow, promoted the product as a normal way to consume wine. Even non-wine influencers, such as the Kardashians, could increase canned wine sales by suggesting that it fits with their lavish lifestyles and is not of lesser quality than glass bottles. Secondly, I think government legislation can be put into play through the advocacy of environmentalists that demands a certain percentage of liquor store inventory be sustainable. This would open up more shelf space in retailers for canned wines.
Joe - I really like this, and I find your commentary on millennial decision making around eco-friendly or responsible purchasing spot on (though incredibly disappointing). I'd add that I think this is in incredible value proposition for Kendra and Sarah for the "everyday" drinking market that they are targeting. For a few reasons, I see them as a complement (not a substitute) to typical wine. Here's why:
ReplyDelete1) Not all wines are "ready to drink": Bottle aging is and will remain a critical part of the wine business. As you allude to above, many producers will not want their high-quality wines put into cans not only because of the signaling, but also because of the aging process. In this way, I think wines that have been pre-aged (as S & K discussed) are well-positioned for their model), but the bold Napa Cabs that are better when aged 10-20 years present too many challenges for this.
2) There is a certain elegance to the age-old ritual of wine: We can't deny it. Wine in a bottle with a cork has a certain beauty to it that cans just don't provide. I doubt Michelin star restaurants will offer cans any time soon (or frankly, ever).
3) The serving size and format they have chosen defines the market they compete in: The 1.7 glasses that S & K have chosen as a serving size cements their position in the market. They are intended as single servings, while bottles are intended to share (sometimes). I like that with cans, I can have 3 friends over and instead of sharing a bottle, we can each choose the varietal we are feeling at that moment. I like that I can enjoy a can as a portable beverage. But their choices give it these advantages and some disadvantages. Pouring another glass from a bottle doesn't feel so sinful. But opening another can does... especially since that gets me close to 4 servings. That might be a challenge for them with the chosen serving size.
Interested to hear your thoughts!
Thanks for the reply, Hannah. While I also appreciate the value proposition and targeting of the “everyday” consumer, I worry that choosing to target this demographic in this manner, assuming that canned wine will continue to grow in popularity and market share, will lead to a long-term trivialization of winemaking and wine tasting. You mention that, given the elegance of the traditional experience, it is likely that the two forms of wine consumption can coexist. However, if we’re headed toward a future in which companies are focusing on sustainability and accessibility (and rightfully so!) in lieu of tradition, and the demographic accustomed to traditional consumption (boomers) is slowly fading away, I wonder if millennials and Generation Z consumers will purchase alternatives such as Maker in such high volumes that they threaten the revenues of wineries that value tradition, in turn significantly limiting the availability of bottled wines. This is obviously a long-term concern/projection, and while I am not sure if bottled wines will take such a drastic hit, thinking about the potential for increased sustainable consumption and the potential for government regulation (as mentioned in my post) makes me think a decline may be possible down the road.
DeleteYou make very interesting points about serving size and increased choice. This made me think about how the product can thrive in social settings, whereas after the in-class presentation I mainly considered canned wine drinking a solo experience, especially given the servings per can. I agree that the availability of different varietals without the burden of opening a new bottle is helpful when trying to appease multiple palates. I wonder if people will be quick to judge if a drinker decides to open an additional or multiple additional cans, viewing that as excessive in comparison to refilling a glass, which may actually amount to the same level of consumption. Will drinkers shy away from multiple cans?