I really enjoyed Maker Wine's presentation and I think that there is so much potential for canned wines to expand the wine consumption market in the US. But their pricing, combined with the limited D2C channel, gives me some pause. At $48 a six-pack, with no option of buying individual cans, someone might justifiably wonder if it isn't just easier to pick up a bottle at K&L on their way to the potluck or a couple bottles and some plastic glasses from Safeway before the picnic.
The ordering and stockpiling of the cans from Maker feels counterintuitive as I would personally prefer to store my wine in a bottle than in a can. Looking at traditional "can" businesses, I think of soft drinks and individual can sales via vending machine or near-location vendors such as bodegas. The last (and only) time I drank canned wine was right before a concert at Millenium Park; I picked it up from Trader Joe's because it made more sense than getting a full bottle. Would I have ordered a six-pack, carried around two cans with me all day, and then brought them to the concert lukewarm? Probably not. The price of the can was also $3.50, which already felt expensive for canned wine because drinking from a can deprives me of the pleasures of smelling the wine (yes, there is still retronasal olfaction). The distribution costs may be prohibitive for a startup, and this is one reason why we've seen so many beverage CPG companies acquired by the big players (i.e. Coca-Cola, PepsiCo, and Dr. Pepper Snapple).
One alternative strategy they can consider is getting into concert / events / outdoor / sports bars where cans are the norm (usually for safety reasons) and where selling cans instead of pouring it out can be much more efficient for the local vendor.
Another strategy is to become a platform matching the above vendors with wine producers. A music festival may choose to partner with two wine producers whose production quality and quantity matches the music festival's expected needs and Maker Wines can directly can the wines at the vineyards and haul them to the music festival's location with minimal storage time. This also helps with the problem that wine producers own label and brand will always come second to the Maker brand. Having only one or two winemakers at a music festival can help bring their brands to attention.
Hi Chris!
ReplyDeleteAs a self-proclaimed wine snob, I totally understand your hesitations with a business model that revolves around canned wine. Before the presentation, I have to say that I could not see myself drink canned wine at all. However, after this presentation, I have to say that I'm a convert.
My understanding of Maker's business model was that they wanted to focus on corporate events, festivals, sports events and the likes in order to sell the majority of their product. A model in which you sell cans by the 6 or 12-pack therefore makes some sense. Transportation costs for cans are also much lower than for glass bottles, which puts them at a competitive advantage over bottled wine companies.
While I understand your concern with such a model for the D2C market, as understandably you may not want to drink a full 6 cans of the same wine wherever you are heading, I think there are still lots of use cases for a 6-pack, for example for splitting it with friends you are going out with or for hosting friends for a backyard party. Given their easy order mechanism, I also don't think you would need to stockpile them if purchased for personal consumption.
The other part of their value proposition that particularly appealed to me was the featuring of the winemakers on the cans. For example, as a biracial individual, knowing that the maker of the rosé wine was also biracial gave me a whole new appreciation for the wine that I wouldn't have had otherwise.
Still, I wouldn't be caught dead serving canned wine at a dinner party, but am now certainly in a place where I would consider it for a large barbecue, a picnic or at the very least a festival or sport event.
Thanks Chris and Carl for the thoughtful comments.
ReplyDeleteMaker Wine is new insofar that it has a story behind the canned wines and it has very clever marketing targeted specifically at the LOHAS population. It is also perhaps the first canned wine to market itself within the premium wine segment.
My concern is scalability for the company. Internationally canned wines (as with boxed wine) are known to be bad, at best on par with table wines. To overcome the stigma will require more than good storytelling and discoveries of niche vineyards. In addition, the challenge would be getting reputable vineyards to come onboard: would say Benovia or Littorai come onboard?
Canned wines make economic sense for airline service as glass bottles are much heavier. But legacy carriers are unlikely to want to serve canned wine to their premium segments: at best this is something possible for LCCs. But to then claim it premium wine would require some even cleverer marketing.
In the US, I would rather serve craft beer than canned wines and buy actual bottles because economically it might still be equivalent or cheaper. The value proposition remains slightly fuzzy to me, which makes it challenging for me to think about how this startup can scale.