India Wine – Bag-in-Box Opportunity
 Bag-in-Box
(BIB) packaging for wine is the fastest growing category
by volume in the wine industry globally, achieving double
digit growth in the past few years with a positive growth
trend expected to continue for the foreseeable future. The
growth rate is significant, it’s on an already sizeable
base of 1.6 Billion (16,000 Crores) litres per annum recorded
in 2008.
BIB was invented by the Scholle Corporation
in the 1950’s and has been supplied to the wine industry
for over 3 decades. BIB in the wine industry today is an
integral component of the portfolios of the key global wine
brand owners, including the largest brand by volume, which
incidentally is a BIB product and not glass. The penetration
of BIB in terms of volume of wine retailed in the category
versus other package types in a number of countries is approximately
50% such as Australia and with Sweden achieving a higher
level of penetration with 65%.
The success of BIB has been largely due to the proposition
of convenience and economic value offered to the consumer
over other packaging types in the industry today. The ability
for the consumer to enjoy one glass at a time and be confident
the remaining wine in the package remains fresh until the
package is completely empty. The majority of wine packaged
in BIB has historically been at the basic or value end of
the industry, however, a move by the brand owners to increase
the proportion of premium varietals in the package has led
to the emergence of differentiated sub category. In many
countries it is not only driving growth but also making
a noticeable contribution to the value, profitability and
reputation of BIB, particularly experienced in the USA in
recent years.
The technology employed for BIB has been a refining process
over many years in the industry. There are three key technology
elements required for the successful packaging for wine.
First and foremost, as the bag is the primary packaging
the bag is required to care for the wine to ensure shelf
life is maximised and the wine quality is protected. Films
used in the bag construction are complex laminates that
have extremely low oxygen permeation rates, the taps are
designed to include low oxygen permeation rates and also
that they are ergonomic, intuitive, self closing and aesthetically
they look good to the consumer. Secondly the box, the box
is designed to be complementary to the bag, it provides
the mechanical robustness to ensure the packaging travels
through the distribution chain and reaches the hands of
the consumer in good condition. The large panels of the
box are available for the wine producer to maximise their
branding, a 3 litre box has 6 times more advertising space
than labels utilised on a glass bottle, the box utilises
quality graphics to support the wines positioning and messaging.
Finally, the filling systems technology is one where the
wine package integrity is maintained including gas management
and accurate weight control.
The economics for BIB is favourable when compared to glass;
a three litre BIB which is equivalent to four 750ml glass
bottles will generate direct packaging and supply chain
savings for the producer. For the consumer the retail price
point for BIB will be favourable over the equivalent number
of bottles. In today’s age, the environment is becoming
a stronger influence in the decision making process for
all companies worldwide. BIB generates approximately 50%
of the carbon dioxide emissions and creates 85% less waste
than glass, extremely positive position that may be utilised
in the brand owners marketing messaging.
The Indian Wine industry is very young in comparison to
the historical wine producing countries of the world. A
young industry always has a unique opportunity, and that
is to utilise lessons learnt by others enabling a fast track
of their own development, such as, including state of the
art technologies and winning marketing strategies used in
the BIB category globally. Notwithstanding the tremendous
growth experienced in India over the past few years there
still remains a significant challenge facing the industry,
which is to create awareness to the consumers of wine as
a beverage and how it is intended to be consumed.
Today wine primarily is sold ‘on premise’ in
India whereas the rest of the world ‘off premise’
has been a key to building demand and subsequently significant
volume growth. The availability for a consumer in India
to purchase ‘wine by the glass’ is very limited
on premise as the business owner is reluctant to open a
bottle to sell possibly only one glass and then the opened
bottle remain sitting on the shelf and unable to sell within
the following few days. If it’s not sold within the
required timeframe the remaining wine in the bottle will
have oxidised and will be required to be disposed of creating
a loss for the business owner. If the bar tender is not
aware the wine has oxidised there is a risk that upon a
pending request by a consumer for a glass of that particular
wine that the wine is served and the consumer has an unpleasant
wine experience, subsequently not returning to that brand
or possibly even wine as a beverage. Both of the outcomes
described above detract from a sustainable position for
wine in India. If BIB was the package of choice and knowing
that ‘wine by the glass’ is available while
keeping the wine fresh for months after opening the business
owner will be confident to have several wine styles and
brands available to the consumer, resulting in positive
wine experiences, less waste, increased profitability and
an increased awareness of wine for the industry.
At this time legislation in India limits wine packaging
sizes to 750ml, larger package sizes are not permitted to
be sold unless prearranged permissions are obtained. The
legislation is required to be addressed to permit the use
of larger package sizes as typically used in the wine industry
globally such as two, three, four and five litre.
It is recommended that the Indian wine producers transition
BIB into their portfolio’s as a product that can complement
their glass range to enable an increased rate of consumer
awareness of wine resulting in individual brand and ultimately
sustainable industry growth.
Contributed by:
M.G.Dixit
Sales Manager – India Region
Scholle Packaging (I) Pvt. Ltd.
206,207,208, Sanas Memories,
F.C.Road, Shivaji Nagar,
Pune 411 004
Tel no. +91 20 25667536
Cell no. +91 9730505551
email: mukund.dixit@scholle.com
19.01.2010
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