The discussion about the can deposit in 2003 led to the beverage can being discredited in Germany as being harmful to the environment. Since then, the can has been a controversial issue. Today - 20 years later - there are a growing number of cans on supermarket beverage shelves. Why is that?
Why the number of cans on supermarket shelves is increasing
Convenience is decisive for the increased demand for cans. Likewise, mobility is an important consideration for beverages. According to the German Federal Environment Agency, the can - to the surprise of many - is one of the most environmentally friendly packages. Cans also seal airtight and dark. In the beer sector, the can is very popular with small craft beer brewers because it means they don't have to retrieve their own bottles in the deposit system. This lowers costs, because it's a huge logistical effort to get all the distributed bottles back.
But why are cans environmentally friendly and why can this be interesting for winemakers?
We all know wine in glass bottles. The myth that these are more environmentally friendly can be dispelled at this point: Yes, that's true, as long as they're reusable bottles. This works very well for water and other beverages.
Unfortunately, not in the case of wine.
Wine bottles are disposable glass, which is a problem for the environment.
Wine from the bottle is associated with quality: "A wine with a screw cap?! That's not possible at all". Do you catch yourself thinking this? Many consumers have this view. The cork is also associated with quality - the wine must be in the bottle.
Often, winemakers are part of associations that have agreed that wine should only be bottled. This is a kind of self-regulation of the winegrowers, which is just gradually breaking down a bit.
One example of this breakup is Holy Grape - the first pure canned wine brand in Germany, which Christian launched in 2017 out of personal drive. He wanted to prove to people that
- also top wines can be sold in cans
- Wine in cans brings countless advantages
- cans ensure the future viability of wine (keyword sustainability).
Launching a new business idea like Holy Grape - how does that work?
Christian first analyzed the markets in other countries: In America, canned wine is an absolute hype topic. Maybe you know the director Francis Ford Coppola through movies like The Godfather. He owned several wineries, some of them in California, and one day decided to bottle wine in cans. Unlike the German market, Americans had no prejudice against canned wine.
Canned wine - a long history of innovation and many experiments
Once there was great innovation in Germany: the can was the invention of a German and it was brought to America before the war. In 1935, one of the first canned beers called Krueger's was created as a result.
From 1936 there were the first attempts by US winemakers to bottle wine in cans. The problem with this was that the metal reacted in contact with the wine, causing great instability in the taste of the drink. Throughout the 1950s and into the 1980s, major producers attempted to overcome these hurdles.
Airlines started using cans for wine and in 1977 one of the biggest beverage companies in the world started an experiment: the Coca-Cola Company. It bought out New York's Taylor Wine Company and tried to conquer the canned wine market. This was the first golden age of canned wine, even if the big breakthrough failed to materialize.
Still, by 1979, many California wines, especially rosé wines, were available in cans in 45 states.
So there is definitely an interesting history of canned wine. For example, California winemaker Allan Green was a noted collector of canned wine. In 2015, he made it into the Guinness Book of World Records with the largest wine can collection of 449 cans.
As you can see, canned wine is not a new topic. It's just that the history of innovation has taken a very long time.
In 1981, Richard Arnold, vice president for food services at United Airlines, spent six weeks trying to get Coca-Cola's Taylor Wine Company canned wine to passengers. A survey subsequently revealed that 40% of United Airlines' in-flight wine drinkers disliked or even hated the wine.
Thus, Coca-Cola got out of the canned wine business and the golden age of canned wine initially came to an end in 1981.
Global patent for canned wine and first mover of canned wine market
However, the spirit of innovation in the winemaking industry was not to rest completely there: in 1996, Australian wine producers Barokes worked for 5 years on the development of Vinsafe. It was the first global patent that looked at canned wine holistically. What made it special was that the can had an internal coating as another element that, combined with a very special filling method, prevented the destabilizing reaction with the metal.
However, the absolute pioneer in canned wine was Asia: there was no consumer prejudice in Japan and other Asian countries. A market for canned wine finally emerged in the U.S. starting in 2004; in 2014, canned wine experienced widespread acceptance in many other Asian countries, as well as in Australia, New Zealand, and the UK. For the past 12 years or so, canned wine has been the fastest growing segment of wine in the US.
Educating the customer - developing consumer awareness
So how do you proceed when consumer awareness for a product has not yet been established?
Christian's Holy Grape brand was the first mover with a pure canned wine brand in Germany. The second mover followed very quickly: WINE+ from Bochum. This company had previously specifically supplied the American market with German canned wine. In doing so, WINE+ deliberately addressed the target group of wine drinkers and invested heavily in public relations.
Holy Grape had deliberately avoided the former, because the target group consisted of female non-wine drinkers - in other words, a completely new customer segment: people who want to drink wine comfortably and on the go and are not wine connoisseurs.
Christian developed the Holy Grape brand together with students at the Düsseldorf University of Applied Sciences and had it protected as a registered trademark in Germany. The wine is very sweet, fruity and somewhat tangy. After all, the expectation when opening a can is the refreshing fizz that should be given to consumers.
However, it was a long road to the Holy Grape brand: It took two years to find a winemaker who was willing to have his wine canned. Christian's learning from this is:
When you go into a market where you have no experience, having someone on board who knows about it is very helpful. It takes a lot of marketing effort to create consumer awareness. It was not easy to place the Holy Grape product on the German market.
Music festivals as an entry into the canned wine market
Holy Grape managed to enter the market through music festivals. Very quickly, however, Christian had to realize that music festivals have to earn an insane amount of money and sometimes sell cheap wine for 9 euros per 0.1 liter. This meant that Holy Grape was not marketable. Festivals were able to buy wine at a cheaper price than Holy Grape.
With the Corona crisis, the festivals' distribution channel finally fell away altogether. Alternatives at the time were drive-in movie theaters or beach chair events, where three German canned wines from large, very old wineries were offered because serving was not possible any other way due to hygiene regulations at the time. Christian saw a spark of hope for canned wine again at that time, but it quickly went out with the reopening of classic festivals.
Cost-wise, Holy Grape was not competitive because the company does not own the wine, the bottling, or the distribution channel. To this day, it's a struggle that seems somewhat futile. Christian is still searching for the perfect niche where it is possible to grow well and quickly.
Rosy prospects for the canned wine market
A look at the global data for canned wine nevertheless provides hope and conveys a rosy outlook. Growth of 7.2% is expected up to 2028. The rest of the wine market can only dream of this, as it is largely saturated - especially in Germany. The global market for canned wine is worth 16 billion US dollars.
On the German market, the first players such as Vinorhino are currently appearing as a pure canned wine brand. Vinorhino focuses on distribution in kiosks, especially in Hamburg, and is managed as a separate segment under a separate brand by a major German wine retailer and producer. So, as we can see, experimentation continues, but the market for canned wine is not yet developed enough in Germany.
What is the strategy to capture share in the canned wine market with Holy Grape?
It takes resources, right partners and focus to move canned wine forward. Holy Grape is open to innovative, creative and competent collaboration partners. If you are interested in collaborating and think you are the right person for the job, please feel free to contact us.
There is already an established brand and a store. Only better market access and a more competitively priced wine are needed to actually make Holy Grape marketable.
A strategic look at the benefit curve of canned wine shows how new innovations can be developed from existing products by varying the various benefit elements for customers: by eliminating things that are not important to the target group. In the case of canned wine, for example, this is the origin or the grape variety. The can deliberately says only "white wine" in order to land in a different target group category than wine connoisseurs.
Long breath required when establishing a brand in Germany
There are a great many regulations in Germany. These are justified, but they can also be a brake. The foundation process in Germany is extremely lengthy. In the case of Holy Grape, it took another six months after the notary visit due to a minimal error in the documents before the trademark registration was completed and the products could be sold. This meant that the carnival season and thus a major sales opportunity was missed, even though the wine had already been bottled.
Further regulations in Germany led to a mistake that Christian and his partners only found out about when it was already too late.
Christian worked with an adequate winemaker and one of Germany's top sommeliers. A rosé wine was to be created. For this, white and red grape wine was mixed, which is not the usual procedure for the production of rosé wine. After a wine inspection, it was determined that according to the German wine law, such a product could no longer be sold as wine.
So 2000 liters of the rosé creation had to be sold with an inventive solution. It eventually passed for Prosecco, but at a much lower price point.
Another regulation issue with canned wine is waste. Aluminum is used in Holy Grape's cans. Every year, therefore, it is necessary to declare what waste is likely to be produced (the cans themselves as well as the packaging waste when they are shipped). These costs must be included in the calculation, especially since they are incurred annually - even if the wine is only produced once.
Conclusion
Don't do things by halves when starting your business, and invest enough resources in your marketing. Planning and strategy are just as important as testing on your target audience. At Holy Grape, it has become clear over time that the target audience for the canned wine is female and more likely to be around 30 rather than 20 years old, as €4-5 per can is less likely to appeal to 20-somethings.
If you have an unusual business idea, you should have three things above all: missionary courage, a top team around you, and enough patience and perseverance to wait for the right timing if necessary.