Alternative packaging in the Australian market: consumer perceptions

By Ben Luker

Awareness of alternative packaging amongst Australian drinkers is on the rise, but COVID-19 has limited opportunities for conversion. The key drivers towards casks and cans are portability and the desire for smaller portion sizes amongst younger drinkers. However, the pandemic has removed the out-of-home occasions where this is most relevant, limiting demand.

The pandemic of the past 12 months has been hugely disruptive for everyone. However, with the rollout of a vaccine promising that the devastation might be coming to an end, it’s time to briefly look backwards to see what we’ve learned.

One trend that has stuck out to us at Wine Intelligence over the past year: consumers are sticking with what they know and are shying away from experimentation and adventure. Since March 2020, when we started tracking the impact of COVID-19 on wine consumer behaviour, wine drinkers around the world have been consistently turning to wines they view as familiar, safe, trustworthy and reliable. We hypothesise that this could be either due to having less time to shop, and therefore making quick decisions when in the store, or consumers having less spare cash or fewer occasions to trial a new type of wine. The loss or severe restriction of the on-premise channel in many markets, taking with it the opportunity for hand-selling a non-traditional product, may also be playing a role.

This is seen case in point in the Australian wine packaging field. Throughout this crazy year, consumers have stuck to their beloved 750ml glass bottle, which remains the dominant format in the Australian market.

However, our data shows that awareness of alternative packaging formats is growing amongst regular wine drinkers in Australia – it is just not translating to increased purchases. There have been significant increases in awareness of smaller casks (2-3 litres), half bottles and wine in cans in particular. In the case of wine in cans, awareness has grown significantly over the past three years, yet the conversion to purchase rate amongst those aware of wine in cans has declined. Interestingly, the growth in awareness has been driven by older drinkers, particularly those over 55 years old, reflecting their broader knowledge and time in the category.

It’s not all bad news though. While increased awareness amongst older drinkers is driving very low conversion, Gen Z and Millennial drinkers are far more likely to purchase different formats once they’re made aware of them. Younger drinkers are also more likely to consider purchasing a range of alternative packaging as they consider them a suitable choice for people like them. This trend is prevalent across the category. Younger drinkers are much more willing to experiment than older drinkers who, although increasingly aware of new formats, are generally content to stick with their established favourites.

Our research also digs deeper into the consumer perceptions and drivers to consideration for alternative packaging formats. Through quantitative research and interviews with trade experts, we discovered that consumers shifting towards alternative packaging are motivated by two major factors: moderation and portability.

Major factors driving change

Moderation is a major trend that is becoming increasingly prevalent throughout the alcohol sector as drinkers continue to place more and more focus on their health and wellbeing. Our research suggests that alternative packaging provides a way for consumers to control serving sizes through reduced volumes (such as single serve cans) or by extending the shelf life of their purchases (such as casks allowing drinkers to have a single glass without opening a whole bottle). Trade experts predict that this shift will increase demand for smaller formats – and producers who can pair this with increased variety could be positioned to take advantage.

The second factor, portability, centres on the fact that alternative packaging types are easy to transport – in contrast to fragile glass bottles. This might explain why purchases of these formats have struggled to rise alongside awareness in the past 12 months – occasions where portable packaging is a bonus simply haven’t occurred in 2020. Consumers indicated that they would be more likely to consider numerous alternative pack formats when drinking outdoors, travelling and at festivals or sporting events, all occasions that were significantly impacted through COVID-19.

Our trade experts also raised a third factor – the environmental benefits of alternative packaging. However, our data suggests that this message hasn’t reached Australian consumers. Our recent Global SOLA report found that 61% of regular wine drinkers in Australia believe that glass wine bottles are a sustainable form of packaging – significantly higher than the global average. The problem isn’t that Australian drinkers care less than their global peers about the environment – our data shows that they’re concerned about sustainability – simply that messaging around the environmental benefits of sustainability hasn’t resonated.

It’s safe to say that the dominance of the glass bottle isn’t under threat. Nevertheless, the rapid growth of awareness of alternative packaging shows promise, and it will be interesting to see if consumers take a few more risks with their purchases once the threat of COVID has passed. In the meantime, it’s imperative that brand owners and marketers capitalise on the key drivers to these alternative formats – moderation and portability – to help deliver conversion to sales. It’s unlikely that we’ll see Australians rush to ‘crack open a can of wine’ at dinner parties any time soon, but on the beach or at this summer’s music festivals? Don’t bet against it.

This article will also be published in the July 2021 issue of the Grapegrower & Winemaker magazine.

Watch Ben Luker’s 2021 PACKWINE Forum presentation on the topic here: