#37 Canned wine - how to bring your unusual business idea to market

The discussion about the can deposit in 2003 led to the beverage can falling into disrepute in Germany as being harmful to the environment. Since then, the can has been a controversial topic. Today - 20 years later - there is a growing number of cans on supermarket drinks shelves. Why is that?

Convenience is a key factor in the increased demand for cans. Mobility is also an important factor for beverages. According to the Federal Environment Agency, cans are - to the surprise of many - one of the most environmentally friendly types of packaging. Cans are also airtight and dark. In the beer sector, cans are very popular with small craft beer brewers because they don't have to return their own bottles to the deposit system. This reduces costs, as it is a huge logistical effort to get all the bottles that have been distributed back. But why are cans environmentally friendly and why can this be interesting for winemakers?

We are all familiar with wine in glass bottles. The myth that these are more environmentally friendly can be dispelled at this point: Yes, this is true, as long as they are returnable bottles. This works very well for water and other drinks.

Unfortunately not for wine. Wine bottles are disposable glass, which is a problem for the environment.

Bottled wine is associated with quality: "A wine with a screw cap? That's not possible". Do you catch yourself thinking this? Many consumers have this view. The cork is also associated with quality - the wine has to be in the bottle. Winegrowers are often part of associations that have agreed that wine may only be bottled. This is a kind of self-regulation by winegrowers, which is gradually breaking down.

One example of this new approach is Holy Grape - the first pure canned wine brand in Germany, which Christian launched on a personal initiative in 2017. He wanted to prove to people that

top wines can also be sold in cans wine in cans has countless advantages cans ensure the future viability of wine (keyword: sustainability).

Christian first analyzed the markets in other countries: In America, canned wine is an absolute hype topic. You may know the director Francis Ford Coppola from films like The Godfather. He owned several wineries, some of them in California, and one day decided to bottle wine in cans. In contrast to the German market, the Americans had no prejudices against canned wine.

Germany was once a great innovator: the can was invented by a German and brought to America before the war. In 1935, one of the first canned beers called Krueger's was created.

From 1936, the first attempts were made by US winegrowers to bottle wine in cans. The problem was that the metal reacted when it came into contact with the wine, which led to great instability in the taste of the drink. From the 1950s to the 1980s, major producers tried to overcome these hurdles.

Airlines began using cans for wine and in 1977 one of the world's largest beverage producers started an experiment: the Coca-Cola Company. It bought the New York-based 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. Nevertheless, by 1979 many Californian wines, especially rosé wines, were available in cans in 45 states. So there is certainly an interesting history of canned wine. Californian winemaker Allan Green, for example, was a well-known collector of wine cans. In 2015, he made it into the Guinness Book of Records with the largest wine can collection of 449 cans. As you can see, canned wine is not a new topic. The history of innovation has just taken a very long time.

In 1981, Richard Arnold, Vice President for Food Services at United Airlines, tried for six weeks to bring the canned wine from Coca-Cola's Taylor Wine Company to passengers. In retrospect, a survey revealed that 40% of United Airlines wine drinkers on board did not like or even hated the wine.

Coca-Cola thus left the canned wine business and the golden age of canned wine came to an end in 1981.

However, the spirit of innovation in the winegrowing industry was not to rest completely: in 1996, Australian wine producers Barokes worked for five years on the development of Vinsafe. It was the first global patent that took a holistic approach to canned wine. The special thing about it was that the can had an inner coating as an additional element which, in conjunction with a very special filling method, prevented the destabilizing reaction with the metal.

However, the absolute pioneer of canned wine was Asia: in Japan and other Asian countries, there were no prejudices among consumers. From 2004, a market for canned wine finally emerged in the USA; in 2014, canned wine was widely accepted in many other Asian countries as well as in Australia, New Zealand and the UK. For about 12 years, canned wine has been the fastest growing segment of wine in the USA.

So how do you proceed when consumer awareness of 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 supplied the American market with German canned wine. WINE+ deliberately addressed the target group of wine drinkers and invested heavily in public relations. Holy Grape had deliberately avoided the former, as 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 Düsseldorf University of Applied Sciences and had it protected as a registered trademark in Germany. The wine is very sweet, fruity and a little tangy. After all, the expectation when opening a can is the refreshing fizz that consumers are supposed to get.

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 that if you are entering a market in which you have no experience, it is very helpful to have someone on board who is familiar with it. A lot of marketing effort is required to create consumer awareness. It was not easy to place the Holy Grape product on the German market.

Holy Grape succeeded in entering the market through music festivals. However, Christian very quickly realized 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. The festivals were able to buy the wine at a cheaper price than Holy Grape. With the coronavirus crisis, the festivals' distribution channel finally disappeared completely. The alternatives at the time were drive-in cinemas or beach chair events, where three German canned wines from large, very old wineries were offered because the hygiene regulations at the time made it impossible to serve them any other way. Christian saw a spark of hope for canned wine again at this time, but it quickly died out again with the reopening of classic festivals.

In terms of costs, Holy Grape was not competitive, as the company owns neither the wine, nor the bottling, nor the distribution channel. To this day, it is a struggle that seems somewhat hopeless. Christian is still looking for the perfect niche in which it is possible to grow well and quickly.

Nevertheless, a look at the global data for canned wine provides hope and a rosy outlook. Growth of 7.2% is expected by 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.

The first players such as Vinorhino are currently appearing on the German market as a pure canned wine brand. Vinorhino focuses on sales in kiosks, particularly in Hamburg, and is managed by a large German wine retailer and producer as a separate segment under a separate brand. As we can see, there are still experiments, but the market for canned wine is not yet sufficiently developed in Germany.

It takes resources, the right partners and focus to drive canned wine forward. Holy Grape is open to innovative, creative and competent cooperation partners. If you are interested in working with us and think you are the right person for the job, please get in touch.

There is already an established brand and a store. All that is needed to make Holy Grape truly marketable is better market access and a more competitively priced wine. 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 for the target group. In the case of canned wine, for example, this is the origin or the grape variety. The can deliberately only says "white wine" in order to land in a different target group category than wine connoisseurs.

There are a lot of regulations in Germany. These are justified, but they can also act as a brake. The founding process in Germany is extremely lengthy. In the case of Holy Grape, it took another six months after the visit to the notary due to a minor error in the documents before the trademark registration was completed and the products could be sold. As a result, the carnival season and therefore a great sales opportunity was missed, even though the wine had already been bottled. Other 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 a suitable winemaker and one of Germany's top sommeliers. The aim was to produce a rosé wine. 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 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 imaginative solution. It eventually passed as Prosecco, but in a much lower price segment.

Another regulatory issue with canned wine is waste. Aluminum is used in Holy Grape cans. It is therefore necessary to declare annually what waste is likely to be produced (the cans themselves and the packaging waste from shipping). These costs have to be factored in, especially as they are incurred annually - even if production only takes place once.

Don't do things by halves if you want to start your business and invest enough resources in your marketing. Planning and strategy are just as important as testing on your target group. In the case of Holy Grape, it has become clear over time that the target group for canned wine is female and around 30 rather than 20 years old, because €4-5 per can is less likely to appeal to 20-year-olds.

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.