Global packaging trends

In the 12 months ended September 2020, 771 million litres of Australian wine was exported to 116 destinations across the world. Of the total volume, 55 per cent was shipped unpackaged to be packaged in-market. Only 25 destinations received unpackaged Australian wine, with just over half that volume landing in the United Kingdom (UK) (see Figure 1). 

Figure 1: Australian unpackaged exports by destination (share of volume)

^{Source: Wine Australia}

The remaining volume (45 per cent) of wine exported is shipped in various forms of packaging. Within the packaged category, 98 per cent is in glass bottles, 2 per cent in soft packs (or cask) and a minor proportion in other forms of packaging such as cans and PET containers. 

Within the glass bottle category, 82 per cent of the volume shipped is in 750ML bottles and 16 per cent in 1.5L bottles. Other bottle sizes shipped include 1L (1 per cent of volume) and 375ML (0.4 per cent). While not dramatic, there has been an increasing share of 1.5L bottles shipped at the expense of 750ML (see Figure 2).

Figure 2: Share of glass bottle exports – 750ML v 1.5L

^{Source: Wine Australia}

For the 1.5L bottles, North America is the main destination with 90 per cent shipped to the United States of America (USA) and 7 per cent to Canada. For 1L bottles, more than 80 per cent was shipped to New Zealand (29 per cent), Hong Kong (27 per cent) and mainland China (27 per cent). Of the 375ML bottles, two-thirds went to three markets – mainland China (29 per cent), Sweden (21 per cent) and the Netherlands (16 per cent).
There are differences in the average price received for the key glass bottle sizes (see Figure 3). The 375ML bottle fetched the highest average value while the 1.5L bottle recorded the lowest average for the 12-month period.

Figure 3: Average value per litre of glass bottle sizes ($ per litre FOB)

^{Source: Wine Australia}

The volume of wine shipped in soft-packs is half of what it was at its peak in 2006 (see Figure 4). However, exports have been relatively stable over the past five years. Japan is the biggest destination for soft-pack exports with a just under a third share of the volume. It should also be noted that soft-packs are popular in Sweden, but the Australian wine sold in soft-packs is predominantly sent unpackaged and then packaged in Europe, particularly in Denmark, before landing in Sweden. According to Systembolaget, more than half the wine sold in Sweden is in soft-packs and the Australian wine category has a similar profile.

Figure 4: Wine exported in soft-packs (million litres).

While the current volumes may be small, there are some emerging trends in packaging formats around the world. Wine Intelligence recently released the research into packaging formats in the USA, UK and Australia. In the USA, the awareness among regular wine drinkers of wine in cans has increased significantly in recent years, from 23 per cent in 2017 to 38 per cent in 2020, driven by younger consumers and females. However, only 8 per cent of regular wine drinkers indicated they had purchased wine in a can (see Figure 5). This is more than double the purchase rate compared to 2017. While the main motivation to purchase wine in cans is convenience, it is also seen as a relatively low-risk and cost-effective way of trying new products or wine styles.

Figure 5: Percentage of regular wine drinkers in the USA who have purchased each packaging type in the past 6 months

^{Source: Wine Intelligence}

Compared to many other European markets, the UK has been more open to alternative packaging types. While the 750ML bottle remains the most popular choice, there has been a growing awareness of less known formats such as pouches and cans. There has also been a growing openness towards soft-packs. Wine Intelligence reports the purchase frequency of soft-packs increased during the June and July 2020, suggesting COVID-19 positively impacted on soft-pack sales. However, 750ML bottles were still the major beneficiary of the surge in off-trade sales in the first half of 2020 in the UK. Convenience, good value for money and environmental concerns are key drivers of demand for soft-packs. However, Wine Intelligence suggests the belief that soft-packs, as well as pouches and cans, typically contain lower quality wine is a barrier to purchase and purchase rates remain low (see Figure 6). 

A more recent development in packaging in the UK has been the flat 750ML bottle. Made of PET plastic, it fits through a standard mailbox slot. It also takes up less space in the fridge. And at 63 grams, it significantly reduces the weight of a case of wine, leading to lower shipping costs and carbon emissions. Flat bottles can also fit up to twice as much wine on a shipping pallet compared to standard bottles. 

Figure 6: Percentage of regular wine drinkers in the UK who have purchased each packaging type in the past 6 months

^{Source: Wine Intelligence}

Like the USA and UK, there has been an increasing awareness of alternative packaging types in Australia. However, this has not necessarily translated into increased purchasing levels. For example, for wine in cans, awareness has grown significantly (from 11 per cent in 2017 to 33 per cent in 2020) yet the conversion to purchase rate has declined over the same period (from 20 per cent to 11 per cent), suggesting that growing awareness is not translating across to purchase at the same rate. However, the overall purchase rate of wine in cans has increased, albeit off a small base (see Figure 7).

Figure 7: Percentage of regular wine drinkers in Australia who have purchased each packaging type in the past 6 months – 2017 v 2020

^{Source: Wine Intelligence}