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NorthBay biz Wine

Above the Fog

Author: Julie Fadda
October, 2012 Issue


Think boxed wine is bad wine? Think again.
 
 
Born into an East Coast home, where boxed wine trumped bottled and quality gave way to savings, I’ve been jaded when it comes to consuming wines served out of anything other than bottles. My move to Napa Valley only solidified the stereotype of subpar boxed wine. But recently, it’s become hard to deny the plethora of grab-and-go wines set to serve the mobile society of today. Here’s how some of today’s alternatively packaged wines measure up.
 
The20 wine cask and amo can
For entrepreneur Chris Coleman, one of the founders of the20, the idea for boxed wine was planted when his father gave him five empty wine boxes from Sebastiani Winery. “I used them to hold my cassette tapes in high school and my CDs in college. I became fascinated by the boxes—and the wine industry in general.” The seeds sprouted years later during a trip to Italy and France, where Coleman saw wine in boxes and kegs readily available. “I thought it was a great idea. It’s better in so many ways, because you don’t have to worry about the cork, you’re losing 90 percent of the packaging, and the carbon footprint of moving wine is minimized.”
 
Coleman spent three years working through the concept before incorporating his company in 2009. “This is my thing, it’s all I do. Bag-in-box wine packaging,” he says. Despite his enthusiasm, he’s never been blind to the negative stereotypes. “Boxed wine has gotten a terrible rap, because it was usurped by the big boys who put wine in there that was, like, 90 percent grape ‘product.’ Our goal has always been to turn everything on its head and take bag-in-box back.”
 
From Coleman’s perspective, the negative perceptions come from not only poor quality wines but also the look of the packaging. “I knew we needed to get away from a box that people were ashamed of—we had to make it something they were proud to show their friends. Sourcing from small family wineries was a key.” It took him three years to secure his first wine source, the Russian River Valley-based Acorn Winery (see page ??). They began test marketing in restaurants with a 9-liter wood cask, and Chef John Ash was the first to sign on. “The first week, people started calling wanting to buy the box for their homes. While we’d always hoped to move in this direction, we were stunned at the response.”
 
The company extended test marketing to San Francisco and, in 2010, developed a prototype for a personal 3-liter oak cask box. The research revealed that people loved the wine but not the $400 price tag for the original container. In response, a “lite cask” was created to offer a more affordable option and included the added benefit of customization.
 
“Part of the allure of the wine bottle is all the effort that goes into the design of the label,” he says. “We wanted to create that same connection with the box, which was the goal with the lite cask. People can send in artwork that we burn onto the box. They like the personal touch.”
 
They also added a “chiller” format for white wine made out of a decommissioned M19A military ammunition can. “All of these containers fit the branding of the company: We reuse or repurpose everything we can, like the oak barrels. And our shippers and paper goods are recycled. We’re the most environmentally sustainable winery on the planet,” he declares.
 
The company has worked with more than 20 partner wineries, who bottle their wines and sell lots to Coleman, who offers the same wine in bag-in-box format. “These are small producers who do it for the love of winemaking. We give them great exposure at organizations and events like ‘the-eg’—founded by the same group that created TED—Google and Cochon 555. I expose them to people who would typically never see their brand any other way.”
 
Coleman speaks to the marketing challenges. “When we do events like Zinfandel Advocates and Producers (ZAP) and Family Winemakers, we have our table set up. People initially walk by giggling and we’ll ask them to try the wine. It’s usually those same people who come back at the end of the day with friends—by then, we’ll have 50 people at our table. It’s a multi-touch sale, because at first people are suspicious that the wine can’t be good. Then they taste it, and get their head around the idea.”
 
Asked the demographics of his core adopters, he says, “Our base is direct-to-consumer now and skews younger. The millennials are open to new ideas. They’re not entrenched in the idea that wine has to be in a bottle to be of good quality.”
 
When asked what’s contributed to the overall success of the company, Coleman shares, “The goal was always to be a game changer. I wanted people to buy the wine for the cool box but then taste it and realize it’s really good. Our biggest asset has been developing a remarkable product that’s helped people to look at bag-in-box in a new way. I’m hoping we can be the guys who, 10 years from now, helped make the change from 20 percent of wines being in bags, to 60 percent—or even 80 percent—and that someday, our children will look back and say, ‘You used to be embarrassed about boxed wine?’”
 
Bandit tetra pak
Three Thieves—the master, the hustler and the dreamer (aka Joel Gott, Charles Bieler and Roger Scommegna)—walk into the vineyard with one criminal mission in mind: “To scour every corner of the globe to find the best wines the world has to offer for a price that’s fair and honest.” In 2001, the trio of bandits snubbed tradition by offering Zinfandel in a retro glass jug with a screw top. In Italy, the thieves observed the use of tetra packaging for wines—a trend embraced throughout Europe but largely unheard of in the U.S. wine market.
 
In 2003, Bandit Wines was born, packaged in one-liter tetra pak resealable boxes. While Bandit has been on the market for more than a decade, the brand has recently experienced a boom. “The category has become more interesting to consumers and retailers in the last five years,” says Wendy Nyberg, senior director of marketing at Trinchero Family Estates (in partnership with Three Thieves). It’s a shift Nyberg attributes to lifestyle shifts. “Years ago, consumers enjoyed wine with food at the dinner table. Now, it’s become integrated into the lifestyle,” she says. “The portability and accessibility of wine that can accompany different lifestyle choices of today is why alternative packaging has become so popular. New wine consumers are gravitating to the nontraditional. They don’t have those older, standard ideals.”
 
Bandit tetra paks, made primarily of paper, are renewable, recyclable and boast a 96-to-4 percent product-to-packing ratio, minimizing the carbon footprint, though that’s not the only sales driver according to Nyberg. “While I think it often plays a role in the purchase decision, it’s not the primary reason. Consumers want to buy something that’s good quality, at the right price point and that’s portable.” In 2009, a 500 mL format was added to meet consumer demand. “The core of our business happens at the 500 mL size because of the portability factor. People are taking wine to different places like an outdoor movie, camping and picnicking.”
 
To meet the palate preferences of today, Bandit continues to diversify. “We’ve expanded our varietal offerings over the last decade. White was obvious with tetra [Pinot Grigio was the first] but now we’re not just focused on that. Our Merlot does really well. It’s been surprising to see that pick up of red wines in tetra.” Bandit also offers a Chardonnay, Cabernet Sauvignon and came out with a red blend in 2012. The one-liter packs retail for $8.99 and the 500 mL for $4.99.
 
Thanks to outdated misconceptions about wines packaged beyond the bottle, quality still comes into question, admits Nyberg. “It’s not that the wine in tetra has to change, it’s the consumer that has to overcome the use of tetra. We can create the best product with the best fruit and best winemaker, but the consumer has to get past those traditional barriers.” Bandit combats the conundrum at the winemaking level. “Joel Gott oversees Bandit and approaches it as if he were putting a quality, premium varietal in a bottle with glass and cork. He makes the wine and oversees things to make sure the vineyards and grapes are of the quality he’s looking for,” says Nyberg.
 
While she describes the Bandit consumer as more active, purchase patterns aren’t necessarily generational. “We expected the younger generation would be quicker to cross over, but we’ve also seen adoption in the 30-to-55 category as well. Our consumers are buying Bandit as a ‘use of occasion wine,’ to be consumed in different venues outside the traditional home setting.”
 
When asked about what’s contributed to the success of the brand (Bandit produces 250,000 cases per year and has experienced double-digit growth in the category for the last two years), Nyberg elaborates, “The introduction of new products has really helped us. There are pouches, cans, boxes, even purse wines, so there’s a lot more acceptance of alternative packaging—and that’s not going to slow down. I think we’re still scratching the surface.”
 
House Band Wines flex pouch
For winemaker Patrick Krutz of Sonoma-based Krutz Family Cellars, the decision to dive into what he dubs the “Wild West” of wine, sprang from necessity. “As a live music fanatic from Mississippi, there was a huge gap between music and the wine industry that needed to be serviced,” he explains. “You could go to a live show or amphitheater and get wine that you ended up choking down or pouring out for a beer or cocktail. There needed to be a quality, attractively priced wine for the music lover, which is where House Band originated.”
 
Krutz fell into the wine biz after graduating from University of Mississippi in 2001, when he moved to Carmel and wound up working at the Cheese Shop. “I was a 22-year-old knucklehead not knowing anything about wine and cheese, but what I ended up with was a master’s curriculum in the resale and wholesale side of the wine industry. I was training my wine and food palate with some very experienced professionals.”
 
In 2002, Krutz helped some colleagues who were making garage wines. By 2003, he launched Krutz Family Cellars. “That’s the parallel between House Band: I was self-taught in a garage.” House Band launched in 2011 in bottle format, and the flex pouch (filled with Chardonnay or Merlot) was introduced in 2012 at the South by Southwest music and media festival in Austin, Tex. It’s continued to fuel music fans everywhere from Outside Lands and the San Francisco Vintners Market, to Rootstock and the Beale Street Music Festival.
 
Krutz and his team spent six months researching packaging, analyzing dissolved oxygen rates, monitoring how the wines matured and at what point deterioration occurs. “We’re trying to extend shelf life,” he says. “I’d love to get it to 18 months, so we’re still adjusting and putting things together.”
 
House Band landed on a 375 mL pouch. “It’s an attractive sell to the consumer because it limits the number of times you have to go to concessions. There are two servings per pouch,” says Krutz. Beyond convenience, other factors are also at play. “The 375 mL is also better for wine quality. One of our biggest factors is trying to combat shelf life. The biggest variable is oxygen—the more liquid, the less oxidation, the longer the shelf life. Ours are guaranteed for 12 months, but are designed to be consumed sooner.” To accommodate the pouch format, Krutz varies his winemaking approach. “We like to see lower pH, higher acidity and fill the pouches with slightly elevated free SO2 than in our 750mL glass package.” House Band wines are all California AVA, vintage-designate wines.
 
Tim Maccarra, vice president of sales and marketing, speaks to some misconceptions: “People traditionally equated boxed wine with low quality, but that’s changing. People are picking up these new brands and noticing it’s not your old bag in the box.
 
“Consumers’ palates are changing, and they expect better quality,” he continues. “We pride ourselves on the quality of our wines.”
 
Convenience factors into the popularity of House Band. “These wines are ideal in areas where you can’t use glass, such as concert venues, hotel pools and golf courses. Our pouch has a hole punch for a lanyard, so people can hang it around their neck and not have to carry the wine around in their hand,” says Maccarra.
 
Krutz’s measures of success: “It goes back to the quality of what we’re producing and the value of it. We’re not trying to dress up a pig. It’s about quality wines, for the value, in a package that’s convenient and has many possibilities and applications.”
 
Peterson Winery bag-in-box
The Peterson family has remained rooted in Dry Creek Valley for the last 25 years, taking a traditionalist, zero manipulation approach to winemaking focused on vintage and vineyard. Yet it remains responsive to the demands of the modern day world. “A restaurant customer on the East Coast, Fat Cat Pie Company, was going through eight to 10 cases of our Cat Rotie Syrah every week and asked if there was anything we could do to minimize waste. People were doing keg wines at the time. We wanted to be environmentally friendly, so we decided to offer an alternative to the alternative, with bag-in-box,” says Jamie Peterson, winemaker at Peterson Winery. The restaurant embraced the idea and Peterson ran with it.
 
Following a trip to France, he saw the bigger picture. “There were a lot of smaller wineries offering bag-in-box to local customers in the tasting room. We realized this could be a good thing to do even beyond restaurants.”
 
While some producers opt to create special blends specifically for alternative packaging, Peterson is bagging and boxing the same wine it offers in bottle and cork. “When you bottle wine, it can go through bottle shock, so we let the wines rest at least six months after bottling before we sell them. With bag-in-box we don’t let it go that long.” Peterson also sells a wood barrel that contains the same refillable 3-liter pouch as the box. Of the 5,500 cases produced annually, 10 percent goes into bag-in-box.
 
The question of quality has also been a factor for Peterson. “The people who are initially adverse to it drank a lot of bad boxes of wine [in the past]. Younger people are definitely interested in and open to it. We haven’t had much resistance, because most buyers are people who’ve been our customers for 15 years. When the question of quality does come up, we let them taste from both the bottle and the bag-in-box so they can taste that it’s the same wine,” says Peterson. “Part of the misconception is that boxed wine is always cheaper, but our boxes contain the equivalent of four bottles, which is $80 worth in bottles. We joke that we have the most expensive boxed wine around.” The bag-in-box wines typically retail for $72 or less.
 
Peterson also modifies the winemaking process to accommodate the alternate packaging. “As soon as you put the wine in a bag it starts to age more rapidly. It doesn’t go through bottle shock. You have chemistry and oxygen pick up, so we hold some back [for bag-in-box] and bottle the rest. The wine we hold back goes into stainless steel tanks for about three months, so it’s as close to the same wine as possible. We adjust the SO2 levels, which helps protect the oxygen that permeates when the wine goes in the bag.”
 
Peterson then speaks to another challenge: “The equipment to fill the bags is expensive, so we have a hand meter to seal them. It’s pretty labor intensive. We fill the bags with inert nitrogen gas by hand, then fill them up with wine to protect against oxygen.”
 
Despite the challenges, he revels in the upsides. “One of the main advantages is, after it’s opened, the wine will last up to six weeks, because it doesn’t pick up any additional oxygen. It’s a nice thing to bring where glass isn’t a good idea—on canoe trips or camping. Plus you don’t have to worry about the issues with glass, which is more sensitive to temperature. They also ship nicely, are lighter than bottles and aren’t prone to damage.”
 
Angry Moth pouch
For the folks at Clif Family Winery (also behind Clif and Luna bars), the idea of alternative wine packaging came from the desire to offer a convenient solution for consuming wine in the great outdoors. In 2010, the company offered Chardonnay and Cabernet in a 1.5-liter pouch with a spigot. “The idea was to create something you could take outside with you. In the beginning, we had no idea what was going to happen,” says winemaker Bruce Regalia (who also consults for several other wineries around Napa Valley). “It was wildly successful, but nobody knew how long the wine was going to last, so we did a lot of oxygen transmission studies.” The recyclable package was convenient, cheaper and easier to ship, according to Regalia. Clif started with small lot runs of 1,500 cases and worked up to 30,000 cases before opting out of national distribution 18 months ago and, ultimately, discontinuing the line. “For us, if you’re making just a little bit, it’s not cost effective.”
 
Still intrigued by the idea of alternatively packaged wines, Regalia opted to continue his experiment outside of Clif. He partnered with Michael Jennaro and formed Angry Moth Industry to meet local, grab-and-go wine needs. “The challenge has always been the levels of SO2 and not knowing how fast the wine will degrade,” says regalia. “Shelf life remains a huge question mark, because there’s oxygen pick up when you go from the tank to the filler. It’s a matter of keeping oxygen levels down, which is more challenging than when you’re bottling in glass. The pouch-filler is hooked up to a 100-gallon tank of wine pushed with nitrogen to keep the oxygen out. For us, the issue with quality has to do with shelf life. Right now, we say the wine should be consumed within eight months.”
 
Angry Moth’s first public outing was at BottleRock, where it sold Chardonnay and Cabernet in 375 mL pouches. At a dinner party, they presented their plan to the principles of the festival, who weren’t completely sold on the idea. “It was when a 28-year-old woman next to me at the dinner texted a picture of one of our pouches that the idea blew up and they were suddenly ready to move on it.” In true startup form, with less than nine weeks to go before the festival, Regalia and Jennaro set off to produce pouches for the event.
 
The wine sold out on Saturday, one day before the festival ended. “Our wine became the adult Capri Sun, people were drinking it out of the pouches using straws.” With the successful launch at BottleRock under their belt, Regalia sees a future filled with wines packaged outside the bottle. “It’s something different, and people like something different. It’s a matter of protecting the wine, giving it shelf life and integrity. That’s always the challenge, how do you keep it safe, and how long it will last. These wines are made for on-the-spot consumption—it’s an instant gratification thing, but you still want a wine that’s easy to drink, mainstream and not that serious.”
 
Beyond the bottle
While subpar boxed wines of the past could have squelched a future filled with alternatively packaged wines, it seems the convenience and instant gratification expectations of today’s wine drinkers are driving a movement, pushing winemakers and next-gen drinkers to go beyond the bottle with quality, conveniently packaged wines.
 
 
 
 



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