Kegs & By-The-Glass – Two Hot Trends

Two articles circulated on wine industry news outlets today touted two continuing hot trends:

  • The growing use of kegs by wineries to support and expand on-premise business;
  • By-the-glass sales are booming due to Millennials’ joy of exploration of new wines and flavors.

Excerpts from the news releases today highlight the convergence of the two trends:

According to Food & Wine magazine, ‘By-the-glass orders account for as much as 80 percent of the wine sold in restaurants, upward of 600 million bottles a year. If just five percent of by-the-glass wines came from a keg (one holds 26 bottles’ worth), it would keep over 30 million bottles out of landfills.’
Bespoke Collection Wine Brands Launch 20L, Recyclable Keg Program to Wholesale Partners, PRNewswire

The Millennial demographic’s penchant for experimentation has led to a surge in new product activity in the wine category, and marketers see openings for by-the-glass programs to help continue cultivating new audiences through the trial-friendly format. “Almost all the growth in wine is coming from new, innovative products. …,” says Marc Goodrich, COO, Banfi Vintners. “One thing we’re involved in a little bit, and we’re waiting to see if it takes hold, is wine in kegs for the on-premise. It could be a very interesting way for the on-premise arena to provide a better by-the-glass experience.
Wine By The Glass Sales Rise As Millennials Look To Experiment, Diversify Repertoire, Shanken News Daily

Wineries need to be aware of converging trends, such as alternative packaging that provides convenience in a particular use environment, plus cost-savings and environmental benefits to consumers, that can further drive consumption through specific sales channels and/or outlets. The two trends above illustrate how one can amplify the other, creating a growth cycle that benefits wineries, on-premise, and consumers looking for choice and value.

The 20-L keg used by Bespoke Collection Wine Brands touts these benefits in their press release (link provided above):

  • … kegged wines afford restaurant and wine bars upwards of 65 days of fresh product, compared to the two to three day shelf life of an opened bottle of wine – and they emerge avant-garde, cool doing it.
  • Across the country, restaurants like Prospect in San Francisco, Second Bar + Kitchen in Austin and Two Urban Licks in Atlanta are embracing kegged wines as a modern and eco-friendly option for their wine programs.
  • Bespoke Collection’s sharply-packaged, 100 percent PET plastic kegs are easy to use and completely recyclable after use.

As in other consumer goods industries, innovation often drives success, and the U.S. wine market – again, led by Millennials – has never been so open to embracing innovation than today. If a winery isn’t seriously examining alternative wine packaging for potential opportunities among their customers, then they are potentially leaving significant business to those wineries that are innovating.