In most of the world, Bag-in-Box wines have a reputation for cheap, nondescript wine of below-average quality – except in Scandinavia. The Scandinavian Bag-in-Box (BiB) market is dominated by Sweden, followed by Norway and then some sales in Finland. The Scandinavian markets, with their developing interest in wine but lack of significant local production, have adapted the format in almost all consumer categories. In Sweden, BiB wines dominate sales, including in the mid-level, quality wine segment.
Bag translates to bottle
“In Sweden, the average consumer does not devalue the producer’s brand for having a box wine range. Rather the opposite – we see that the same consumers who buy a certain wine in box during weekdays buying that same wine in bottle for weekend consumption,” explains Sara Norell, the head of the buying department of Swedish state-owned retail monopoly Systembolaget.
Marilisa Allegrini of Allegrini in Valpolicella, who sells over 1m L of her Allegrini Corvina in box in Sweden, claims it has even helped her fine-wine range. The brand recognition for the Allegrini name is strengthened by the volumes in BiB and make consumers comfortable picking her Amarones and vineyard-designated wines when browsing the fine-wine section. “Part of the reason that the box wines have such a good reputation in Sweden is that we do put premium wine qualities into the boxes, which is not so common in countries outside of Scandinavia,” explains Norell. Surveys of consumers show that the majority of consumers categorised as “connoisseurs” buy BiB between a few times a year and a few times a month.
BiB represents about 56% of the market by volume and 36% share by value of wines sold. Over 100m L of wine are sold in box each year, a sharp increase since the launch of the first box wine on the shelves in 1996. Part of the success is price-based, part is the convenience of packaging. “I can have a glass or two without wasting the rest of the bottle,” says one consumer. The wine writers for daily newspapers and tabloids have been generally positive about the format, reviewing it along with bottled wines.
The brands for BiB wines in Sweden can be divided into two main categories. The first one contains wines and brands made specifically for the Swedish market. While they may now be available in bottles, they became popular in the box, normally at the middle-to-lower end of the box price spectrum. Such wines include South Africa’s Umbala, Spain’s Gosa de Juan Gil, California’s Three Monkeys and Australia’s Chill Out. Then there are wines from international producers which have been put in box specifically for Scandinavia. These include quality producers such as Allegrini and Barone Ricasoli as well as global brands such as Lindeman’s and Rawson’s Retreat. The top two sellers, both created for Sweden and unchallenged for years, are Zumbali Chenin Blanc from South Africa (4.9m L annually) and Umbala Red from South Africa (4.6m L annually). Brand loyalty is stronger in the box segment than for bottles, and consumers stick to their favoured brand in greater numbers even after price changes.
The fastest-moving categories are those whose styles are popular in Scandinavia, such as generous red wines with soft tannins, a touch of sweetness (5 to 20 g/L is common for boxed red wine) and higher alcohol levels. This includes Appassimento-style wines and Zinfandel (or Primitivo labelled as Zinfandel). Celebrity wines, named after everything from rock stars to TV chefs, do well. Formats veering from the traditional square shape are popular, with the purse-like ‘Vernissage’ now seen exported to markets outside of Scandinavia. Until 2013, wines from South Africa, which still accounts for the top two sellers, dominated the box market. In 2011, however, Italian wines began to rise and in 2013 reached the same numbers as South Africa, with what seems like unstoppable popularity. Somewhat surprisingly, it is not in the very cheapest category that the most volume is sold. Instead, wines in the 190SEK ($27.00) to 199SEK per 3-L box category dominate, followed by the 170SEK to 179SEK category. Wines range in price from 139SEK to 285 SEK per 3-L box on the shelves and 129SEK to 328SEK in the ordering assortment. Wines under 200SEK ($28.80) hold 62% of box sales.
The customer decision tree varies depending on the price category for the box. The decision for lower-priced box wines (under 200SEK) is mainly based on price, second on packaging. Country of origin, wine characteristics, varietal and CSR (customer social responsibility) positioning only account for between 3% to 6% (each) of the decisions in this category. For more expensive box wines, however, the decision is primarily made on packaging. Price, country of origin and varietal take a nearly equal share of the decision – 10% to 13%. As much as 6% of the decision in this price range is based on whether the wine is CSR-profiled, including organic certification.
Ulf Sjödin MW is the head of category management at Systembolaget. He says that the most important factor determining the quality in a BiB is the expertise in filling. “During filling, it is extremely important that the settings are made to give minimal oxygen inclusion. When we see BiBs that lose aromas too early, it is nearly always because of too much air during filling,” he explains.
Systembolaget gives the boxes a six-month shelf life from filling and will only accept wines with at least three months of remaining shelf life. The acceptable maximum shelf life is based on a number of studies made a few years back, and materials have improved further since. “New materials keep longer and if they become popular we will increase allowed shelf lives, but as long as turnover is as high as it is currently, and the problems so small, the limits are probably correct where they are,” he concludes.
A Greek study in the journal Food Chemistry, released in the spring of 2014, looked at the “Effect of packaging on oenological parameters and volatile compounds of dry white wine.” The writers found an effect in quality parameters – mainly acidity, colour and aromas – after only two weeks. They attributed the loss in sensory qualities to absorption of volatile compounds by the plastic lining of the pouch, a process known as “scalping”. The choice of plastic lining matters, with low-density polyethylene showing the quickest loss of aromatics, acidity and alcohol. Their conclusion was nevertheless that the quality remained acceptable for 90 days, in spite of the early loss of volatiles. Sjödin is not worried: “The loss of aromas is there but is limited.” The biggest challenge remains in smaller boxes: the 1.5-L and 2-L formats, where the wine-to-plastic surface area is dramatically increased.
Swedish wine writers are currently exploring the organoleptic differences between the wine in bottle and the same wine in BiB. The quicker maturation of box wine is the focus, and no article which makes comparisons has yet found the box and bottle to be identical in style.
And, in Sweden at least, the social consequences of the packaging are considered in detail. “With our strong CSR work, we see a benefit in BiB when looking at the energy expenditure in a life cycle analysis. The carbon footprint of a BiB is a fraction of that of a glass bottle,” says Norell. Organic wines are gaining popularity but have a challenge because of lower sulfur allowances. She says that there is also a socioeconomic factor in BiB production that is currently discussed at Systembolaget. “Bulk shipment with filling in or near Sweden gives longer shelf life and even less carbon footprint. However, filling in the country of production gives job opportunities where they are the most needed,” she says.
BiB sales in Sweden are still strong and show no signs of weakening. In the past five years alone, sales have increased by 13.7% and many importers and producers who once vehemently opposed the format are now hopping on the train. “It’s the only way to make any decent money in Sweden now,” says one importer who was long a staunch opposer. The new wave of wine writers are much more critical of the format, saying it promotes quantity over quality, a much too uniform assortment, poorer wine quality and less personality in the wines.
Still, lists of the best BiB wines or tests where “box wine beats expensive bottle” still appear in the tabloids on at least a monthly basis. Such lists are a guarantee of big sales − both of the paper and the box.
Adaptors versus rejectors:
Francesco Ricasoli heads up the high-end Chianti producer Ricasoli. His box “il Barone” is a huge success on the Swedish market with over 1.7m L sold yearly. “We have much lower margins on our box wine but the volumes are very large,” says Baron Ricasoli. The idea to start producing box wine came during a slump in US sales, when volumes of wine were available and needed to be sold. “Around the world, nobody understands this product,” he continues. “Ten to 15 years ago, media started seeing box wines positively. We launched our box in 2006 after a year of thorough research. At that time, only cooperatives were selling box wines – not respected estates. We were the first and it was a high risk. If I was to put my family name on the box, it had to be in a premium box segment,” he says. Still, passing on the risk would not have given the rewards. “I want Ricasoli to be someone who is always leading new developments but if we were going to do it, we had to be proud to do it and aim to be the best,” he explains. Ricasoli invested in their own high-end “bottling” line to control filling and quality. “It is important to fill well and keep up with packaging developments - we find the plastic liners are not good. Aluminum lined is the way to go.”
The Ricasoli brand is still strong but losing some market share to new products. “Today, it is much tougher to take market share on the Scandinavian box wine market because of increasing competition,” he explains. However, the Italian producers have been quick to stake a claim and overall sales (in both box and bottle) have skyrocketed.
Spain, on the other hand, which was previously strong in Scandinavia, has lost significant market share, possibly because Spanish producers are resistant to the BiB format. Xandra Falcó, CEO of the Marqués de Grigñón wineries in Spain, was surprised at the positioning of BiB in Scandinavia. “For me it is a surprise that BiB does not affect the image of quality of a brand. Spain is definitely missing opportunities and losing market share by forbidding BiB in some of our wine regions,” she says.