#37 Wine in a can: how to bring an unusual business idea to market

The 2003 debate over deposits on cans gave the beverage can a bad name in Germany as an environmental offender. Ever since, the can has been a contested topic. Today, 20 years later, there is a growing number of cans on supermarket beverage shelves. Why is that?

Convenience is the key driver behind the rising demand for cans. Mobility matters just as much when it comes to drinks. According to Germany's Federal Environment Agency, the can is, to many people's surprise, one of the most environmentally friendly types of packaging. Cans also seal out air and light. In beer, the can is very popular with small craft brewers because it spares them from retrieving their own bottles through the deposit system. That lowers costs, since getting every bottle sold back again is an enormous logistical effort. But why exactly are cans environmentally friendly, and why might that be interesting for winemakers?

We all know wine in glass bottles. The myth that these are more environmentally friendly can be cleared up right here: yes, that's true, as long as they are returnable bottles. For water and other drinks, that works very well.

For wine, unfortunately, it doesn't. Wine bottles are single-use glass, which is a problem for the environment.

Wine from a bottle is associated with quality: "A wine with a screw cap?! Absolutely not." Do you catch yourself thinking that? Many consumers see it that way. The cork, too, is associated with quality: the wine has to be in a bottle. Winemakers are often part of associations that have agreed wine may only be bottled in glass. It's a form of self-regulation among winemakers, and it is slowly starting to break open.

One example of that breaking open is Holy Grape, the first pure canned-wine brand in Germany, which Christian launched in 2017 out of personal conviction. He wanted to prove to people that

top wines can also be sold in cans wine in cans brings countless advantages cans secure the future viability of wine (think sustainability).

Christian first analyzed the markets in other countries: in America, canned wine is a huge trend. 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 put wine in cans. Unlike the German market, Americans had no prejudices against canned wine.

Germany once had great innovative power: the can is a German invention, and it was brought to America before the war. In 1935, one of the first canned beers followed, called Krueger's.

From 1936 on, US winemakers made the first attempts to put wine in cans. The problem was that the metal reacted on contact with the wine, which made the taste highly unstable. From the 1950s into the 1980s, large producers tried to overcome these hurdles.

Airlines began using cans for wine, and in 1977 one of the world's largest beverage companies started an experiment: the Coca-Cola Company. It acquired the New York-based Taylor Wine Company and tried to conquer the canned wine market. That was the first golden age of canned wine, even if the big breakthrough never came. Still, by 1979 many Californian wines, especially rosés, were available in cans in 45 states. So canned wine does have an interesting history. The 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, 449 cans. As you can see, canned wine is nothing new. The innovation story simply took a very long time.

In 1981, Richard Arnold, Vice President for Food Services at United Airlines, spent six weeks trying to sell passengers the Taylor Wine Company canned wine from Coca-Cola. A survey afterward found that 40% of United Airlines wine drinkers on board disliked or even hated the wine.

So Coca-Cola exited the canned wine business, and the golden age of canned wine came to an end in 1981, at least for the time being.

But the spirit of innovation in the wine industry didn't go dormant entirely: in 1996, the Australian wine producers Barokes spent five years developing Vinsafe. It was the first global patent that looked at canned wine holistically. What made it special was that the can had an inner coating as an additional element which, combined with a very specific filling method, prevented the destabilizing reaction with the metal.

The clear pioneer in canned wine, however, was Asia: in Japan and other Asian countries, consumers had no prejudices. From 2004 on, a market for canned wine finally emerged in the US; in 2014, canned wine gained broad acceptance in many more Asian countries as well as in Australia, New Zealand, and the UK. For about 12 years now, canned wine has been the fastest-growing segment of the wine market in the US.

So how do you proceed when consumer awareness for a product doesn't exist yet? Christian's brand Holy Grape was the first mover with a pure canned-wine brand in Germany. The second mover followed very quickly: WINE+ from Bochum. They had previously supplied the American market with German canned wine in a targeted way. WINE+ deliberately addressed the target group of wine drinkers and invested heavily in public relations. Holy Grape deliberately avoided the former, because its target group was women who don't drink wine, a completely new customer segment: people who want to drink wine conveniently and on the go and who are not wine connoisseurs. Christian developed the Holy Grape brand at Düsseldorf University of Applied Sciences together with students and had it registered as a trademark in Germany. The wine is very sweet, fruity, and slightly sparkling. After all, the expectation when you open a can is that refreshing hiss, and that's what consumers should get.

But the road to the Holy Grape brand was a long one: it took two years to find a winemaker willing to have his wine filled into cans. Christian's takeaway: When you enter a market where you have no experience whatsoever, it helps enormously to have someone on board who knows it. Creating consumer awareness takes a great deal of marketing effort. Placing the Holy Grape product on the German market was not easy.

Holy Grape entered the market through music festivals. But Christian quickly discovered that music festivals have to make an enormous amount of money and sometimes sell cheap wine for 9 euros per 0.1 liter. That made Holy Grape uncompetitive. The festivals could buy wine at a lower price than Holy Grape's. With the Covid crisis, the festival sales channel disappeared entirely. The alternatives at the time were drive-in cinemas or beach-chair events, where three German canned wines from large, very old wineries were on offer, because the hygiene rules back then made serving any other way impossible. At that point Christian saw a glimmer of hope for canned wine, but it faded quickly once classic festivals reopened.

On the cost side, Holy Grape wasn't competitive, because the company owns neither the wine, nor the filling, nor the sales channel. To this day it's a fight that looks somewhat hopeless. Christian is still searching for the perfect niche where it's possible to grow well and fast.

A look at the global data on canned wine still offers hope and a rosy outlook. Growth of 7.2% is expected through 2028. The rest of the wine market can only dream of that, since it is largely saturated, especially in Germany. The global market for canned wine is worth 16 billion US dollars.

In the German market, first players such as Vinorhino are now appearing as pure canned-wine brands. Vinorhino focuses on sales through kiosks, especially in Hamburg, and is run by a large German wine merchant and producer as its own segment under a separate brand. So we see: the experiments continue, but the market for canned wine in Germany isn't developed far enough yet.

It takes resources, the right partners and focus to push canned wine further. Holy Grape is open to innovative, creative and capable partners. If you're interested in working together and think you're the right person for it, get in touch.

An established brand and a shop already exist. All that's needed to make Holy Grape truly market-ready is better market access and a wine that's more competitive on price. A strategic look at the value curve of canned wine shows how varying the different value elements for customers can turn existing products into new innovations: by eliminating things that don't matter to the target group. With canned wine, that's the origin or the grape variety, for example. The can deliberately says only "white wine" in order to land in a different target category than wine connoisseurs.

Germany has a lot of regulations. They're justified, but they can also slow you down. The process of founding a company in Germany is extremely drawn out. In Holy Grape's case, a minor error in the paperwork meant it took another six months after the notary appointment before the trademark registration was complete and the products could be sold. That meant missing carnival season and with it a major sales opportunity, even though the wine had already been bottled. Other German regulations 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 plan was to create a rosé. To do that, white and red grape wine were blended, which isn't the usual way to produce rosé. A wine inspection determined that under German wine law, such a product could no longer be sold as wine.

So 2,000 liters of the rosé creation had to be sold with an inventive workaround. In the end it went through as prosecco, but in a much lower price segment.

Another regulatory issue with canned wine is waste. Holy Grape's cans are made of aluminum. Every year, you have to declare the amount of waste you expect to produce (the cans themselves plus the packaging waste from shipping). These costs have to be factored in, especially since they recur annually, even if you only produced once.

Don't do things by halves when you want to start your business, and invest enough resources in your marketing. Planning and strategy matter just as much as testing with your target group. Over time, Holy Grape found that the target group for canned wine is female and closer to 30 than 20, since €4–5 per can is less of an option for 20-year-olds.

If you have an unusual business idea, there are three things you especially need: missionary courage, a top team around you, and enough patience and stamina to wait for the right timing if you have to.