Canned wine seems to have plateaued in the U.S., despite many opportunities for growth
What does it say about canned wine’s future that one of the most successful products comes from a beer company? Not much, says Rabobank analyst Stephen Rannekleiv, pointing to Anheuser-Busch InBev’s Babe. The brand’s general manager, Chelsea Phillips, has been quoted noting the Babe’s nearly eight-fold sales growth between 2019 and 2020.
But, Rannekleiv says for the wine industry, “there are just so many challenges,” including the industry-wide reluctancy to move existing brands into cans and the general belief that consumers don’t want to see premium wines in such a casual package.
In this, canned wine—which, according to analysts interviewed, was mostly a U.S. phenomenon and never gained as much traction elsewhere—seems to have hit a plateau over the past couple of years. Yes, there may be room for more growth (Witness Heineken USA’s test of a new sparkling wine product, called Comb & Hive.), but most analysts say any hope that cans might help bring younger consumers to wine in the U.S. is fading. Instead, they’ve opted for RTDs and hard seltzer, where they find it easier to control both how much they drink and have a better sense of the calories and sugar in the product. (Which makes it worth noting that the Heineken product, sweetened with honey, is being marketed more like mead than wine.)
“The thing that always propelled the idea of canned wine was its huge growth,” says Lulie Halstead, the CEO of the Wine Intelligence consultancy. “But it was growing from such a small, small base, and that obscured what was going on.”
By one Market Watch estimate, canned wine sales were about $200 million in the U.S. in 2020, up 68 percent from the previous year. That’s impressive, until one puts it in perspective: the overall U.S. market was worth $70 billion in 2020.
In fact, says Halstead, her company’s 2020 study found that although canned wine awareness levels grew dramatically in the past three years in the U.S., that awareness still remains relatively low: “Fewer than 4 in 10 wine consumers are even aware that wine can come in a can, and only 8 percent say they have bought canned wine in the past six months,” states the study. And that latter number isn’t especially high for younger consumers—just 14 percent of Gen Z and 11 percent of Millennial participants claimed past canned-wine purchases.
According to analysts interviewed, canned wine has run into a variety of problems:
- Continuing perceptions of low quality, where canned wine isn’t “serious wine.” This has been this has been particularly true in Europe, says Jacqueline Snoeker of the Vinergy consultancy in the Netherlands. “Maybe the British are more open for cans, but the rest of Europe is probably more conservative when it comes to wine drinking,” she says. “Wine is still perceived as enjoyment, and not a commodity like coffee, tea or soft drinks.”
- Production issues, and not just the pandemic- and supply chain-related problems that have led to can shortages. Halstead says difficulties remain with finding the best can liners to ensure sufficient shelf life if the wine doesn’t turn over in retailers as quickly as anticipated. When this happens, the wine can go off, leaving a discernible sulfur odor and/or taste.
- Occasion problems. Halstead notes that most wine drinkers see red wine as a meal wine, not something to pop poolside. And it’s (typically) higher alcohol levels don’t make it attractive for canned occasions, either. Whites don’t suffer as badly in that regard, but don’t seem to have caught on, either. The key, says Halstead, are rose and sparkling wines, which offer lower ABVs and seem more “outdoorsy.” The fizz doesn’t hurt either, she says. (It’s probably not a coincidence that Babe focuses on rose and sparkling.)
- Different distribution channels. Cans are more of a convenience and supermarket product, says Rannekleiv, while most wine producers are used to selling wine in bottles to traditional wine retailers. In one respect, Anheuser-Busch InBev’s success with Babe isn’t surprising, he says. Who better understands the convenience and supermarket channels than a beer company?
- Cans were once seen as a solution to wine’s many carbon footprint problems, but that hasn’t panned out. Both Halstead and Rennekleiv comment that younger consumers say they want more environmentally friendly products, but they don’t see wine in glass bottles as particularly offensive. The sense remains, they say, that wine is a natural product and that glass bottles—since they can be recycled—aren’t the problem.
And the wine business, says Rannekleiv, hasn’t done much to change any of these issues.
Jeff Siegel is an award-winning wine writer, as well as the co-founder and former president of Drink Local Wine, the first locavore wine movement. He has taught wine, beer, spirits, and beverage management at El Centro College and the Cordon Bleu in Dallas. He has written seven books, including “The Wine Curmudgeon’s Guide to Cheap Wine.”