March 2016 Issue of Wines & Vines
 
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The Changing Landscape of Wine Bottles

Glass sales strong in spite of widespread imports; plastic makes inroads with major brands

 
by Jane Firstenfeld
 
 
Gallo Glass machine line
 
Gallo Glass has 14 machine lines and employs 690 full-time staffers in California's San Joaquin Valley.

Winemakers and packaging designers have confirmed that the wine industry remains conservative when it comes to adopting new presentations (see “Designer Dreamscapes” in the January 2016 issue). New bottle shapes and sizes are a hard sell—especially on retail shelves—for well-documented reasons.

Packaging suppliers, however, continue to introduce new options and find buyers willing to invest in small alterations to make their wine stand out and even raise its perceived value.

Glass bottles manufactured in the United States and Europe remain high-quality options, while complaints about quality and consistency from low-cost Asian imports continue, according to wine industry sources. Glass prices have remained relatively stable in the past year.

Glass acts
Nigel Dart, senior director of Gallo Glass, provided Wines & Vines with details related to the subsidiary of E. & J. Gallo. While increasing imports from developing countries have brought decreased costs for wineries willing to use imported bottles, “Costs for locally sourced glass have been stable through technology improvements, light-weighting initiatives and improved operating efficiencies. Gallo Glass has seen pricing remain relatively stable in an inflationary environment for manufacturing inputs.”

Dart noted that glass costs are heavily influenced by the cost of raw materials, labor, energy and environmental compliance costs. “Imported glass can sometimes come in at a discount due to lower costs for some of the key inputs—especially lower labor and environmental compliance costs.”

    KEY POINTS
     

     
     
  • Glass bottles remain the standard, though prices have risen with inflation.
     
  •  
  • PET is making incursions--both in small 187ml bottles and in traditional 750ml packages.
     
  •  
  • More elaborate bottles and punts are becoming more popular for higher end brands.
     

He added that Gallo Glass has advantages over importers including a modern fleet of natural gas and oxygen furnaces with low environmental impacts and energy requirements. Recycling rates of approximately 50% not only reduce the amount of waste that goes into landfills, they also reduce greenhouse gas emissions and energy use, he said.

A local manufacturer in California, Gallo Glass has a full-time workforce of 690, making it a major employer in the San Joaquin Valley. “We employ a highly skilled workforce and are committed to training and development through apprenticeship programs and other initiatives,” Dart said.

Currently Gallo Glass has 14 machine lines, and the company has made recent capital investments to increase output while reducing energy use and improving quality, according to Dart.

“This commitment to growth and investment will continue when the next furnace is replaced in 2017,” he said.

Manufacturing location affects price
Glass manufacturer Verallia produces bottles in Europe, but the company now offers increased services in North America. “Our prices are about the same, approximately 1.5% higher per year based on inflation,” said brand development manager Isabelle Le Graët. “Between 2013 and 2015, the exchange rate between the euro and the dollar also helped us to lower prices.”

She reported: “According to my customers, Chinese bottles have not improved, and I got new leads from customers who’ve seen their bottles explode after filling—especially on sparkling products. There are lots of critical issues on the neck and finish as well.”

Verallia has introduced innovations including luminescent glass, internal embossing, extra-black and the intense, dark-green tradiver color—plus new bottle shapes for rosé and late-harvest wines, she said.

Erica Harrop, founder of Global Package, commented, “Glass costs might be interpreted as coming down because more customers are purchasing their fancy glass from different factories that can offer high quality at lower pricing. This is true for Europe and China. And if glass is coming from Europe, some of the factories will pass along their savings from the better exchange rate. Cost savings can be up to 50% for very expensive glass. But there is less variety, and glass factories may not always have that stock.”

Price changes are based on factory run sizes and location, she explained. “Freight is a heavy cost, too, for glass. Bottle weight also affects the base price.”

Harrop added, “China is still much less expensive, and they make some very fancy bottles now. But the glass is not always in stock, and the runs are much larger. This is the biggest change for the wineries with regard to use and pricing. I would say that most wineries now have some Chinese glass purchased, and there is cost savings of 10% to 50% based on the product….However, stocks have to be secured much longer in advance.”

Marco Braguti, the North American manager for Bruni Glass, said, “We have not seen a drastic reduction in the price of wine bottles,” though more wineries are looking for customized bottles to increase brand recognition.

Global Package develops as many as 10 new shapes for bottles and spirits every year, Harrop said, and the company continues to add new bottle selections from offshore suppliers.

Global’s Doble Alto line from Spanish designer Estal features a double-high base. “We are working on projects here locally (California) as well,” Harrop said.

Gallo’s Dart also noted: “Consumer demand for beer has been declining (per Euromonitor), due in part to an increase in wine and spirit consumption. In reaction to these market changes, the U.S. glass industry has seen plant closures. To accommodate larger wine containers, beer bottle machines have been converted to wine and spirit bottle machines. This increased supply has had the effect of putting downward pressure on wine bottle prices.”

Has the time come for plastics?
Way back in 1967, the late Mike Nichols directed a crass adult to urge Dustin Hoffman’s drifting character in the film “The Graduate” to get into “plastics.” All these decades later, plastic is beginning to make a splash in wine packaging.

Mendocino County, Calif.-based Fetzer Vineyards dipped a toe into plastic, single-serve wineglass-shaped packages designed for use in stadiums and similar venues. That program was discontinued, but Fetzer is still committed to 187ml plastic bottles—both for airline service and retail sales.

Surprised? Fetzer is renowned for strict adherence to sustainable grapegrowing and winemaking. The company’s chief operating officer, Cindy DeVries, told Wines & Vines, “Lightweight, 187ml PET bottles allow us to offer greater convenience and portability for wine consumers, in turn facilitating a broader set of consumption occasions for Fetzer wines.”

She added, “Also of tremendous interest to us are the sustainability benefits associated with lighter packaging, which reduces the carbon emissions created during shipping. Shifts like ours from glass to PET packaging in the 187ml size help us to reduce our carbon emissions, while complementary carbon sequestration efforts in our vineyards allow us to further reduce the overall carbon footprint of our operation.”

The bottles are produced by Amcor Rigid Plastics, and screwcaps come from G3, according to Fetzer public relations associate Courtney Cochran.

“We use quality plastic labels that render beautifully on the finished product. We’ve found that plastic-to-plastic labeling is more compatible than paper-to-plastic for 187ml-sized PET bottles,” she reported.

“We modified our existing bottling facility to accommodate 187ml-format production, focusing on our most manual line for modification. Specifically, we modified the filler spouts and the capper, developed a new box to pack into and also adjusted for bottle receiving,” Cochran said.

Sarah Brennan, Amcor market manager for spirits, wine and beer, added, “The single-serve market has seen strong, steady growth, and we don’t foresee that trend changing any time soon.”

More news is coming with the introduction of full-size 750ml PET wine bottles from Bronco Wine Co. With an estimated production of 11 million cases per year for its multiple brands, it’s the sixth largest wine producer in the United States. According to Amcor, Bronco is field-testing its Green Fin and Hacienda brands in 750ml PET bottles and “is seriously considering a major packaging switch from glass to plastic for both retail and airline segments.”

Bronco is perhaps best known for its acquisition and relaunch of the Charles Shaw brand, which rocketed to fame in 2003 as “Two-Buck Chuck” in Trader Joe’s markets. Amcor’s release included a quote from Bronco co-founder CEO Fred Franzia: “The conversion to PET packaging in 750ml will be a game-changing event in the wine industry.…The use of lightweight PET and other associated eco-friendly packaging features takes us to the next level in terms of sustainability and further expands the Green Fin brand potential.”

Green Fin organic wine is being field tested through Trader Joe’s; the Hacienda bottles are used for first-class service on U.S. airlines. Because of their light weight, airlines have led the way to adoption of wine in PET packaging. According to Amcor, the PET bottles are 100% recyclable and use PET labels (eliminating contamination in the recycling stream). At about one-sixth the weight of standard glass bottles, they use short-skirt ROPP aluminum screwcaps, which are removable prior to recycling.

The lightweight package does not require bulky case cartons; instead bottles arrive on shrink-wrapped trays. Amcor claims its PET bottles provide extended shelf life because they are lined with a silicon oxide (SiOx) barrier from KHS Plasmax GmBH. The glass-like material “seals the container from the inside to protect the contents from oxidation,” Amcor stated.

“This ultrathin (less than 100nm) material is transparent and resists cracking, abrasion and delamination. Moreover, it doesn’t degrade over time nor limit the storage time for empty bottles. The barrier coating is easily removed during the recycling process and does not contaminate the recycling system, providing Bronco a fully recyclable container.”

Bronco performed an 18-month evaluation to validate color, taste and overall quality of wines in the 750ml PET containers. Ultimately the California Certified Organic Farmers approved the package, and the mobile service Halsey Bottling filled them without issue on its bottling line.

The increased use of PET bottles by a few companies while most others stick with traditional glass is a good example of how change comes gradually to the wine industry. Often the highest priced wines have the most to lose in terms of perceived quality with any change in packaging, so they may proceed slowly. But others looking to save money, land a new sales channel or even just get noticed are the ones that push the envelope.

 
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