Higher-end boxed wines continue to thrive, led by Black Box and Bota Box, which dominate the premium side of the business. Black Box, owned by Constellation Brands, grew by 11 percent last year to nearly 4.5 million cases, earning its 11th consecutive Impact “Hot Brand” award. Delicato Family Vineyards’ Bota Box surged 27.7 percent to nearly 4 million cases, winning its eighth straight Hot Brand award.
The Black Box line includes nine varietals and a red blend, while Bota Box offers 16 varietals. Both compete in the 3-liter boxed segment, which is the focal point for premium players. E. & J. Gallo Winery recently entered the segment, launching The Naked Grape in 2014 and then following with Vin Vault last year. The Naked Grape portfolio includes six varietals and a red blend, while Vin Vault is available in five varietals and a red blend.
Gallo initially launched The Naked Grape in 750-ml. bottles in 2010, and it quickly became one of the hottest wine brands on the market, winning consecutive “Hot Brand” awards in 2011, 2012 and 2013, and then crossing the million-case threshold in 2014. That same year, Gallo launched the brand in a 3-liter boxed format, while keeping the 750-ml. bottled version. In 2015, The Naked Grape reached 1.17 million cases, according to Impact Databank. In Nielsen channels, the 3-liter Naked Grape rose by 61.6 percent last year, while the 750-ml. bottled version fell by 11.1 percent. And while the 3-liter package comprised 40 percent of The Naked Grape’s volume in 2014, that share rose to 55 percent last year. If Gallo’s aim was to tap into the torrid growth of Black Box and Bota Box, they’ve been succeeding. And Black Box, Bota Box, The Naked Grape and Vin Vault all offer stylish, contemporary packaging—vividly illustrating how much the category’s once-stodgy image has been transformed.
The long-time volume leader of the boxed wine category is Franzia from The Wine Group. Franzia plays below the premium end, and its growth has been eclipsed by the premium leaders. Last year, Franzia fell by 8.6 percent to 23 million cases, according to Impact Databank, though it’s still the largest table wine brand in the United States.
Despite all the progress on pricing, packaging and quality, the current price ceiling for 3-liter boxed wines still hovers at around $20. “While people are now comfortable spending $20 for 3-liter box brands, you still see sales drop off above that price point,” says Andrew Browne, founder, president and CEO of Precept Wine, which markets its House Wine brand in a 3-liter box.
The question therefore is how far upscale boxed wines can go. It seems possible—or even likely—that an ultra-premium player will one day emerge. “There’s definitely a movement toward a more premium boxed product,” says BevMo senior vice president of wine Bob Paulinski. “While many attempts to go beyond the current $20-plus level haven’t worked out very well, I wouldn’t be surprised if someone launches an ultra-premium boxed wine that actually will succeed.”
In 2014, Delicato Family Vineyards launched Loft ($24.99), a 3-liter ultra-premium bag-in-box wine, and thus far it has shown promising growth. “Time will tell if this price segment develops further, but we certainly see great opportunity,” says Chris Indelicato, president and CEO of Delicato Family Vineyards.
Still, price competition remains intense in the boxed segment. When The Wine Group rolled out its Jewelry Box brand in 2014, the goal was to maintain a $20-plus price point, but Wine Group chief marketing officer Jeff Dubiel says competitive pricing led to the current retail price of $18.99. “There’s opportunity at the higher end, but no one has cracked it significantly yet,” Dubiel says. “I still envision a world where consumers become more accustomed to boxed wine and are willing to spend at higher levels.”
Undoubtedly, E. & J. Gallo will be seeking out the same opportunity. “The premium boxed wine market will continue to grow,” says Carmen-Maria Navarro, director of marketing for E. & J. Gallo Winery. “We have an opportunity to educate consumers. As the category evolves, you’ll see new price points and new propositions.”