Canadian winemakers grapple with a lack of vendor-diversity, resulting in less sustainable packaging options and impeding market reach.
—Andrew Monro
When it comes to wine-growing regions of the world, Canada is not the first place most people think of, let alone where one may expect leadership on sustainability.
The country sits low as the world’s 27th largest wine producer[1], but this has not stopped the Canadian wine industry from booming in the last 20 years, expanding its production of wine by over 75 percent, although less than 1 percent is exported, most of it to China, the US, and the UK.[2]
“We work very hard to keep a low-carbon footprint,” says Paul Speck, co-owner of Henry of Pelham, one of the oldest wineries on Ontario’s Niagara Peninsula. Part of his sustainability effort is the use of lightweight glass bottles for the majority of his still wine production. “In a time of climate change, we need to be restrained, and mindful of waste.”
Speck notes that the Liquor Control Board of Ontario (LCBO) has a major leadership role in this regard. As the world’s largest purchaser of alcohol, the LCBO has run its Lightweight Bottle Program since 2010, requiring winemakers, both domestic and foreign, who want to sell their products in Ontario to limit the weight of their bottles.
The policy specifies different weights, or exemptions, depending on the type of wine, the size of the bottle, and retail value of the wine. For example, a 750mL (29.36 fl. oz) non-hock bottle needs to be 420g (14.82 oz.) or less if the wine retails for $17.00 CAD or less.
Winemakers exceeding these weight limits must pay a non-conformance fee per bottle. This policy has been very effective, as according to the LCBO, this has resulted in more than 90 percent of wine sold in 750mL bottles meeting its lightweight requirement.
Starting in October 2021, the LCBO is expanding the scope of this program to include more expensive bottles of wine which have been previously exempt—the previous $17.00 retail limit used in the example above will be raised to $18.00, and will further increase to $19.00 in April 2022.
Speck comments that this affects public demand and perception. “There’s a strong public perception of ‘weight as quality.’ Packaging is still the way most people perceive the elegance and quality of our product. It’s a marketing problem, but one that means for our more expensive wines, there’s a kind of luxury with a heavier bottle.”
This means the LCBO’s policy and planned changes is both good and bad news: The policy affects all wine sold in Ontario, both domestic and imported, keeping the playing field level for everyone—everyone must move to lightweight bottles or have their wine cost more than their competitors. At the same time, it may influence consumer purchasing decisions.
Given these restrictions on packaging and having to compete in a global industry dominated by larger and older wine-growing regions where it’s easier to use economies of scale, Canadian winemakers have a concerted interest in sustainable packaging to keep costs low.
The problem for Canadian winemakers, however, is the availability of local, sustainable bottling options.
“Nothing is more sustainable than buying locally, and we do try to,” says Speck. “But we are not always able,” he adds referring specifically to glass bottles.
While there are several local glass bottle suppliers throughout Canada, the majority of glass bottles sold to Canadian wineries (either directly or through distribution) is dominated by a small group of large corporations—most American-based or owned, notably Ardagh Group, Owens-Illinois (O-I), United Bottles & Packaging, and Berlin Packaging.
“There’s not a lot of wiggle room… the business is very monopolized,” says Walter Schmoranz, president of Pelee Island Winery, the largest private estate winery in Canada. More than 85 percent of Pelee Island’s wine is sold in lightweight bottles. (Schmoranz did not disclose his specific suppliers.)
He notes that in decades past, as the Canadian wine industry first began to rapidly grow, winemakers had access to a wide variety of manufacturers, and were able to take advantage of group purchasing schemes between wineries.
The diminishing power of local Canadian manufacturing, combined with the effects of free trade, both beginning in the early 1990s, led to the consolidation of the market, and a greater reliance on foreign companies, leaving fewer local supplier options for Canadian wineries—be it for bottles or any other manufactured product needed for winemaking.
While we were unable to reach company representatives for direct comment, the product catalogs of each US company mentioned above do offer lightweight bottles meeting LCBO specifications (as well as other jurisdictions in Canada). Wine Industry Advisor has previously reported that Ardagh Group, in particular, has made inroads to offering its LCBO policy-compliant lightweight bottles to Canadian winemakers.
Comparatively, lightweight bottles make up less than a quarter of the selection offered by major vendors inside Canada. While there’s a plethora of choices pertaining to color, shape, and closure types, very few of these customization are available within the required weight. Thus, Canada now has a marketing problem (all bottles tend to look the same) and a sustainability problem.
Further, the combination of the consolidated market, lack of local manufacturing, and heavy reliance on US and other foreign glass bottle suppliers, has led to fragile supply chains. Nowhere is this more apparent than with the ongoing shipping crisis, which both Speck and Schmoranz noted has resulted in a distressing reliance on East Asian glass manufacturing by major vendors. They’ve resorted to regions as far reaching as Spain and Turkey, which aren’t nearly as crippled by the shipping crisis.
“We’ve seen shipping costs triple, and lead times move from what used to be six weeks to four or five months,” says Schmoranz. This has meant sustainability ends up taking a backseat to wineries needing bottles—any bottles—to put their wine in.
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[1] According to 2018 data from the Food and Agriculture Organization of the United Nations (FAO); calculated by metric tonnes.
[2] Comparative data from 1998-2018 from the Food and Agriculture Organization of the United Nations (FAO); calculated by metric tonnes.
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Andrew Monro is a marketing writer currently based in Ottawa, Ontario, Canada. He grew up in British Columbia’s Okanagan Valley as the wine industry began booming there in the early 2000s, giving him a lifelong respect for winemaking and a deep curiosity in wine and how it’s made. Follow him on Twitter at @AGMonro, where he talks about digital marketing and wine (sometimes both at the same time).
