Cask Wine: Think Inside The Box

National Liquor News - June 2004

It was called simply “bag of wine” when Angove’s introduced the world’s first cask wine in 1965. Over the years, it’s been known by various names, including “bag in the box”, which it is still known as in many parts of the world. Put a handle on it, make it more compact and it’s a convenience pack. Spruce up the image a tad and it’s a softpack. Or do what Miranda Wines has done and give it a new name completely - 2LP, short for two-litre pack. More specificially, it’s Sandra’s 2LP, a name in keeping with its funky new look. Brand manager Sandra Miranda says she thought her boss, Lisa McGuigan, was joking when she suggested her name be used on the product. But she now thinks it’s a “cool” way of appealing to females over 25, the product’s target market.

The introduction of a personality behind a cask is a first in Australia, and an indication of the constant change that is taking place in this segment of the market. As Rosemary Scott, Southcorp’s marketing director for Australasia, says: “The whole category is ripe for some innovation.” Scott has good reason to think this. Despite a common perception that people are no longer drinking cask wine, the figures show otherwise. “There’s a perception that from back in the mid-90s when table wine took off, sales of softpack wine dropped, but that’s not the case,” Scott said. “In fact, the softpack market is growing at the same rate as table wine. If anything, it’s gaining more strength.”

According to AC Nielsen data, softpack wine accounts for 53 per cent of the market on a volume basis, and 22 per cent in value terms. “It’s not something you can ignore,” Scott said. “It’s bigger than the sparkling market, for example.” Miranda Wines says it is females who dominate the purchasing of wine in Australia, which is why it is targetting them with Sandra’s 2LP. Released in early May and retailing for $10.99, it comes in a Semillon/Sauvignon Blanc blend and Cabernet Sauvignon/Merlot blend. While researching the proposed varietal mix, the company discovered that although both blends showed phenomenal growth in the bottled wine sector, they were almost non-existent in the two-litre softpack sector.

One company which does have a 2-litre Cabernet Sauvignon/Merlot blend is Yalumba, which introduced it last year under its Reserve Selection range. It has what is arguably Australia’s strongest line-up of two-litre softpacks, its Reserve Range comprising nine straight varietals and the Cabernet Merlot blend. Yalumba’s general manager of marketing, Ralph Dunning, says the company is constantly researching new innovations in cask wine, from packaging initiatives to new varietals. “Casks were once a part of the wine drinking progression for young drinkers, but with the market being flooded by RTD’s [ready-to-drink beverages], we are finding that casks are no longer the primary starting point for younger wine drinkers,” he said. “The cask drinker varies from consumers who do not wish to spend a lot of money on a bottle of wine, to the consumer who appreciates cask wine for its convenience.”

According to Yalumba’s research, older households are the largest consumers of casks, with the 45-plus age group the highest. “These consumers find the cask good value and [they] like the flexibility of being able to drink one or two glasses of wine at time without having to open a whole bottle. “The mainstream wine drinkers, who usually prefer bottled wine, also tend to keep a cask in the fridge or the cupboard as a fall-back. These consumers usually drink casks at informal occasions, such as barbecues.” Dunning believes the cask segment is often forgotten by retailers, the attention it is given being disproportionate to the large volume that is sold. Yalumba has produced attractive stands so that its casks can be displayed in high-traffic areas, and says it is important that retailers rotate their cask stock, not only in-store but in warehouses too. “This has become even more crucial with the Best Before date introduced in 2003. Consumers may become very aware of this date and could be disappointed if they take home a cask that has passed its Best Before date.”

It was problems with the shelf-life that caused Angove’s to withdraw from the cask wine market six years after it had introduced what had been hailed by the press as an “extremely novel idea”. The design was much the same as today’s casks, with a plastic bag that collapsed as the wine was withdrawn, but there were problems with the oxygen permeability of the plastic, enough to cause Angove’s to give up on the one gallon table and fortified wines it had been selling in Australia and England. In subsequent years it watched as other companies picked up on the idea, and with improved technology it chose to re-enter the market in 1984. Some 20 years later, its Paddle Wheel 5-litre softpacks are still selling well with little effort. As brand manager Matt Redin puts it, “it just tends to tick along by itself.” The Paddle Wheel packs sell for $12.99 and come in four generic styles: fruity white, fruity lexia, dry white and dry red.

While generic styles proliferate in the 4-litre Stanley and 5-litre Berri Estates range that are big volume movers for the Hardy Wine Company, group brand manager Peter Nicolaci says there has been a shift in recent years towards premium varietal softpacks. The company has helped drive this with products such as the 2-litre Banrock Station, which retails for $13.99 and is identical to Banrock’s wine in the bottle, the 3-litre Hardys Reserve and 4-litre Renmano range. “The driving force behind the outstanding growth in this segment has been consumer recognition and acceptance of the fact that there is some damn good wine in these soft packs,” Nicolaci said. “While [consumers’] preference often still lies with bottled wine for weekends and occasional consumption, the premium soft pack now forms the staple of their mid-week consumption.”

He expects there’ll be a lot more innovation in packaging as companies seek to gain a competitive edge, with new shapes and sizes, embossing, foils and other quality indicators. He also believes retailers could do more to maximise their opportunities, for example by introducing a rotating “special of the week/month” with tasting note and endorsement. For its part, the company is extending some of its ranges, including the 2-litre Renmano range which will see the addition of a Cabernet Merlot blend, and the 4-litre Stanley range which will get a varietal Cabernet Sauvignon.

While the price per litre is increasing across all softpack segments, Rosemary Scott says it is increasing most dramatically in the 4-litre premium segment – 25 per cent over the past three years, according to AC Nielsen figures. Southcorp is releasing a premium 4-litre cask later this year, while Orlando Wyndham’s Morris Wines last year added a varietal Riesling to its 4-litre range which already included Cabernet Sauvignon, Shiraz and Merlot. Orlando Wyndham’s core range, Coolabah, runs the gamut of generic styles from Crisp Dry White to a German-style Steinwein, Lambrusco and that stalwart of the pub and club scene, Moselle. De Bortoli Wines is preparing to introduce some new varieties in its Premium 4-litre range as this magazine goes to press. It recently introduced a Durif and last year added a Verdelho to its 2-litre Reserve range.

Its spokesperson says there is no “typical” cask wine drinker, with consumers coming from all walks of life and age groups. Cask drinkers are also bottle drinkers, an opinion echoed by Southcorp, whose research shows that one in three bottled wine consumers drink wine in softpack as well. Rosemary Scott says the overall increase in the softpack market has not been at the expense of bottled wine – Australians are simply consuming more wine overall. And it’s still the 4- and 5-litre generics which account for the large volume of cask wine sold. Some 47 per cent of the softpack market is 4-litre generic, 23 per cent is 5-litre generic, 16 per cent is 4-litre varietally declared, 12 per cent is 2-litre varietally declared and 2 per cent is 3-litre varietally declared.

While Southcorp’s growth in the past year has been in the 4- and 5-litre segment with its brands like Kaiser Stuhl and Lindemans Cellar Choice (Kaiser Stuhl was launched in a twin-pack), Scott says there has been a “strong definition” of the 2-litre market in the past few years. “We believe there’s a very good opportunity to grow the 2-litre value part of the market.” Accordingly, it recently launched its Queen Adelaide Chardonnay and Queen Adelaide Regency Red in 2-litre softpacks retailing for $12.99. It’s the same wine that is also available in bottle and which has been available in a 3-litre cask for several years. In 2002, Southcorp put another of its most popular bottled wines into softpack when it brought out Bin 65 Chardonnay, Bin 40 Merlot and Bin 45 Cabernet Sauvignon in 3-litre packs, retailing for $29.95.

The industry still has a way to go, though, in convincing the public that cask wine compares favourably with its bottled counterpart. While the stigma is gradually disappearing, Scott says Australians still haven’t come to accept cask wine in the same way that Scandinavians, for example, have. “People (there) understand what the format is. They appreciate that it offers convenience without a sacrifice in quality. The real challenge here is to educate people that it’s about a different pack variant, not about quality.”

© Christine Salins

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