Boxed wines were a bigger hit than ever in BevMo stores during the pandemic as consumers sought volume and convenience in an uncertain time. “After more than doubling in volume in 2020, boxed wines have given back part of that sales growth so far this year,” says Olivier Kielwasser, category lead for wine at the West Coast retail chain.
Austin Keith, owner of Odessa, Texas-based retail chain Pinkie’s, also saw a surge, noting that instead of buying the large-format 1.5-liter bottles, many are opting for the 3-liter box. “The consumer kind of realized that if they open a bottle and have one or two glasses, the wine isn’t going to taste the same [a few days later] because it’s been exposed to air,” he says. “The boxed wine doesn’t do that.”
Throughout most of 2020, consumers were buying large quantities in a single shopping trip or order as they sought to minimize contact with others. Boxed wine—already in growth mode prior to the crisis—benefitted from that trend. The top seven boxed wine brands together grew 13.5% to 53.4 million cases in 2020, according to Impact Databank.
Franzia was the overwhelming leader with 24 million case depletions in 2020, a 7.6% gain, according to Impact Databank. Franzia plays below the premium end and in recent years has struggled against the rising tide of boxed wines in the $15-$30 a 3-liter range.
While less than half Franzia’s volume, Delicato Family Wines’ Bota Box brand continued to be one of the industry’s most dynamic brands, with volume rising 41.2% to 11.3 million cases. “Three-liter premium box wines were already on fire in the years leading up to the pandemic; once the pandemic hit, it added fuel to an already hot category,” says Delicato’s vice president of brand marketing Kathy Pryce. “Consumers turned toward trusted, reputable brands, and premium box’s large format, stay-fresh packaging, and value for money made it an ideal choice for wine buyers stocking their pantries during a time of uncertainty. So, 2020 brought many new consumers into the box wine category. Bota Box gained nearly one million new consumers in 2020 alone, and we expect to continue to bring new consumers into the category.”
Overcoming The Stigma
Despite the vibrancy of the boxed wine segment, some marketers acknowledge that there’s still some skepticism surrounding boxed wine. “A lot of the early boxed wines were pretty horrendous,” says Gregory Doody, president and CEO of Vineyard Brands, whose La Vieille Ferme brand offers a boxed format. He notes that the bag-in-box format has been around since the 1960s, although it’s only gained popularity in the past two decades. “I’m not sure the skepticism has gone by the wayside entirely, but for the adventurous consumer willing to do some research, there are some really good boxed wine options out there.”
And familiarity brings converts. “As the category has grown and more consumers have had the chance to try boxed wine, much of the initial skepticism has dissipated,” says Alex Evans, CMO for Precept Wine. “This was well illustrated last year by the unprecedented growth of the category.”
Pryce agrees, noting that the skepticism largely lies with the uninitiated. “There is still stigma among wine consumers who have never tried boxed wine,” she says. “Current premium 3-liter boxed wine consumers are over the ‘stigma’, as they know you can get great quality wine for amazing value.”
Boxed wine is also appealing to a younger generation of consumers who are less enamored by the ritual of bottled wines sealed with the traditional cork. The bag-in-box and TetraPak technology has advanced and consumers increasingly recognize that the containers are suitable for premium wine.
For example, Pryce says any stigma associated with boxed wine is “much more common among older consumers, who may have negative associations from previous decades when a lot of box wine was the opposite of premium.” She adds, “Younger consumers are coming into the boxed wine category at a fast clip and are more open to wine in a wide variety of formats.”
Demographics And Values
But not all containers are viewed the same, due to the different demographics of the vessel’s core drinker. “Within the box wine category, there’s a huge difference between the 5-liter consumer and the premium 3-liter consumer,” Pryce notes. “Consumers who buy the 5-liter format are older, many of them are retired, and value is the key driver of purchase. On the other hand, the premium 3-liter box consumer, which is Bota Box’s segment, tends to be younger, with a higher household income. And all of our data and research suggests that younger consumers are more open to boxed wine.”
Younger consumers are also a target for Trinchero Family Estates’ Bandit wines, which is available in 1-liter and 500-ml. TetraPak sizes. The company’s Sutter Home brand has 500-ml. and a 3-liter bag-in-box presentation. “Overall, 3-liter box shoppers tend to be baby boomers and older and have higher incomes when compared to the traditional 750-ml. bottle shopper,” says Trinchero vice president of marketing Mark Dunlea, citing a Numerator survey. “That said, a little over a third of 3-liter boxed wine shoppers are Gen X and a quarter are millennials or younger, suggesting a broad appeal across a range of age groups in search of value, convenience, and sustainability.”
Dunlea says that the company’s Bandit brands reach a younger, more active demographic that take the wines on the go. Other marketers, including Evans, see more equitable distribution. “We see consumers for box wine across a wide range of age and other demographic segments,” she says. “The box wine consumer is one that is looking for good value and quality, and who enjoys wine with some degree of regularity. Also, the box wine consumer does not necessarily buy only boxed wine but may purchase it along with bottles or cans.”
The packaging also appeals to a sustainability-conscious consumers. “Skepticism of the category will continue to wane as quality improves and environmental impact becomes top of mind for consumers,” notes Dunlea. “Studies show that 87% of people would buy a product with a social and environmental benefit if given the opportunity, and Bandit checks both boxes. Its Tetra Pak container is lightweight and recyclable, largely made from sustainable and renewable resources.” He also notes that one percent of Bandit’s sales support 1% for the Planet’s network of environmental nonprofits.
Pryce also notes the environmentally friendly appeal. Benefits of the box format include “value, portability and, especially, sustainability,” she says. “For many premium box consumers, the smaller carbon footprint of boxed wine is a key benefit as well. This is especially true for Bota Box, which has, from its inception, had sustainability and eco-friendly packaging as part of its DNA.”
Of course, with the strong appeal to younger consumers and the growth statistics showing dynamism, boxed wines in a variety of formats have started to crowd retail shelves.
Keith of Pinkie’s says the expansion of the boxed wine sector—particularly the smaller-size TetraPaks, in conjunction with the growth of hard seltzers and other ready-to-drink products, has put a strain on shelf space. “Everyone is coming out with an RTD and everyone is coming out with a seltzer and there’s going to be a major shake out eventually,” he says, adding that many of the boxed wines are also competing in that space, while the whites and rosés are competing for limited cold box space.
Still, he’s open to trying most of the new brands hitting the market. “We try them all, and if they sell, we keep them and if they don’t sell, we get them out of there,” Keith says.
Delicato’s Pryce says many retailers are reconsidering the space allocated for boxed wines. “We see the shelf set for box wine expanding even more, and starting to take space from glass wine brands,” she says. “Securing ‘off-shelf’ display for premium boxed wines has also been challenging up to this point. However, we see the growing popularity and strong velocity of this segment providing the justification to retail decision-makers the need to get more aggressive with merchandising on the floor and end-cap and out-of-department. We also anticipate the need for continued innovation in style and formats to stay competitive.”
Boxed wines are also seeing a push into more premium pricing, although the majority sold is still in the sub-$20 range for the 3-liter box, and even for the 5-liter size due to the value focus of that package size. “The consumer is gradually migrating from the 5-liter to 3-liter size, this represents a sizeable trade-up in average retail,” Kielwasser says.
Dunlea also notes the trend. “Three-liter has been steadily taking share of the boxed wine category from 5-liter, and we anticipate this trend toward more premium and portable offerings like Bandit will hold,” he says.
Market leader Franzia, whose volume is concentrated in the 5-liter packaging size, made a push this year into 3-liter boxes with the launch of Franzia Refreshers ($15), a line of slightly sweet varietal wines blended with natural flavors. Boasting lower alcohol levels and fewer calories (75 calories a 5-ounce serving), the portfolio includes Peach Moscato, Tropical Pinot Grigio, Strawberry Rosé, and Wild Berry Moscato.
“Franzia was the first nationally distributed wine in a box, and we are always exploring new ways to build upon this legacy of innovation,” Jeff Dubiel, CMO at Franzia’s parent company, The Wine Group, said at the July launch. “As one of the only brands bringing together both fruit flavored varietal wines and lower alcohol and lower calories in our signature boxed wine format, we’re anticipating Franzia Refreshers will become a go-to selection for new wine and beverage alcohol consumers.”
Franzia Refreshers are targeted for the summer season, but most boxed wines aren’t seasonal, marketers say. They are, however, typically used for certain occasions or environments, and aren’t for every wine brand. Doody notes only one of Vineyard Brands’ broad range of wines is sold in the format, and adds the package type is paying off. “Our sales of La Vieille Ferme boxed wines have been incredibly strong in recent years,” Doody says. “This year through June, our sales are up over 15% over the same period last year, but that’s on top of an increase of 54% over the same period in 2020 versus 2019. When you compare those boxed sales to our sales of La Vieille Ferme in other formats, they’re outstanding.
“I wouldn’t say that boxed wines are the wave of the future, but they’re definitely here to stay,” he continues. Noting that there are “some really tragic” boxed wines on the market, Doody nevertheless says consumers with “a spirit of adventure” are willing to explore. “With a little research, consumers can find some really nice boxed wines, including La Vieille Ferme,” he says.
Dunlea is also confident about the future for boxed wines. “Premiumization and sustainable packaging are two areas of focus that are driving the entire [consumer packaged goods] category, including boxed wine,” he says. “Wine in eco-minded TetraPaks and bag-in-box formats will continue to improve in quality, and any skepticism or misconceptions about the format will fade away.”