New federal rule expected to spur sales growth of canned wine

A federal rule issued last week likely will lead to more wineries placing wine for sale in aluminum cans, a trend gaining traction in both the beer and hard cider sectors, analysts said.

The Alcohol and Tobacco Tax and Trade Bureau on Dec. 29 unveiled the regulation to allow wineries to use three new sizes for their products: 355 ml (12 ounces), 250 ml and 200 ml cans.

The ruling comes after the bureau originally proposed eliminating all containers for wine and spirits products. That plan was scrapped after criticism from wine trade groups and wholesalers.

Instead, the agency added the new sizes to the previous standard of nine different sizes ranging from 3 liters to 50 ml containers. The 750 ml bottle still remains the overwhelming choice for retail sale though some wine companies like Francis Ford Coppola Winery in Geyserville and E. & J. Gallo Winery have used smaller cans.

“We are encouraged that the federal government will still have them (the standards) in place … because what they do is they create a national framework for wineries to comply with. They are reliable and predictable,” said Tracy Genesen, general counsel of the Wine Institute, the major trade group for the California wine industry.

Most notably, the rule will allow wineries to sell smaller individual wine cans already in the marketplace. That would apply to the 250 ml can that is already popular on retail shelves in four packs. Gallo’s Barefoot winery has had success with that package size because it qualified as a permissible 1-liter container under previous regulations.

“These new ones that are permissible under (the federal agency’s ruling) ... can be even more of a shot in the arm for them as they grow,” said Jon Moramarco, an industry consultant with bw166.

The canned wine segment is still small. For U.S. retail outlets tracked by Nielsen, still wine in cans represent only 0.5% of the overall market at $86 million on annual basis through the end of November. Sparkling wine in cans was a little higher at $49 million, which represents 2.2% of that market.

But the market will grow with help of the new rule because it brings clarity, said Robert Williams, founder of WICresearch, a leading research firm for the canned wine market.

For example, the 355 ml can will become more popular possibly as the 12-ounce cans that are ubiquitous for beer and cider companies — and retailers are comfortable selling them. Thus, Williams said it could likely replace the 375 ml cans in popularity for those who do not want to pay for a full bottle of wine.

“The consumer tends to want to go with the cheaper price,” Williams said.

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell