indiana horticultural congress and trade showthe flextap was the first front push tap created for...
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INDIANA HORTICULTURAL CONGRESS and TRADE SHOW
Janos Radvanyi Jr.Commercial Director – Wine & Spirits
Scholle Packaging
29 January 2007
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Evidence of Change
• Packaging trends in the retail beverage market
• Packaging trends for the wine market within and outside of North America
• Wine sales growth in North America
• The future
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Convenient packaging.
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Orange juice MilkCoffee
Water Children’s drinks
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What’s the Point?
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Lessons Learned
• Consumers accept new packaging when it delivers convenience or value
• New packaging can grow the segment by increasing the base
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Australia: The Results
• Bag-in-Box has 53% of all domestic sales• Per capita consumption increased from less than
8 liters in the early ’70’s to over 18 liters today• Extensive sales of Bag-in-Box brands in the UK,
Scandinavia and the U.S
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The Trend in North America
• Premium wine versus the traditional 5-liter offering
• Extension of existing bottle brands• New price points offering value to consumers
but not extreme value
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• Convenience– 3 liters of wine in less space than 4 bottles– No cork screw needed– A glass at a time
• Value– The last glass is as fresh as the first glass
• Quality– Taste the wines
The Consumer Perspective
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Wine Market Council
“Freshness and keepability are issues for a majority of marginal wine drinkers that tend to deter them from developing the habit of having an open bottle of wine on hand for by-the-glass enjoyment at home.”
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The Wine Industry Perspective
• Increased consumption among marginal wine drinkers
• A package that positions wine as a viable alternative to beer and other adult beverages
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GLOBAL CONSUMPTION SNAPSHOTS
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Top 12 ConsumersGallons, million
0100200300400500600700800900
France Ita
lyUSA
German
ySpa
inChin
a UKArg
entin
a
Fed.R
ussia
nRom
ania
Portuga
lAus
tralia
2005
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Top 12 Consumers (per capita)Gallons per capita / yr:
02468
10121416
Luxem
bourg
Franc
ePor
tuga
lIta
lyCro
atia
Slovenia
Switzerl
and
Spain
Argen
tina
Denmar
kHun
gary
Austri
a2005
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Global Share of Consumption2005
20.2%
6.7% 2.6% 2.2%
68.4%
EuropeAmericaAsiaAfricaAustralasia
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SNAPSHOT OF WINE and BIBGlobal Wine
2004 2005 Change
Global Production (Gal) 6.6b 7.4b 7.7%
Global Consumption (Gal) 6.0b 6.0b 2.5%
BIB Volume (Gal) 0.3b 0.321b 6.6%
BIB Market Share 4.9% 5.1% 4.0%
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GLOBAL CONSUMPTIONConsumption by region:
USA Latin America10 liters/consumer/annum. 20% BIB Growing
UK
Up to 35 liters/consumer/annum.1% BIB Starting
Australia20 liters/consumer/annum. 9% BIB Growing
Scandinavia
20 liters/consumer/annum. 53% BIB Steady
New Zealand22 liters/consumer/annum. 48% BIB Steady
Continental Europe
18 liters/consumer/annum. 25% BIB Growing
Up to 50 liters/consumer/annum. <5% BIB Growing
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"3L cask wines growing faster than any other wine package segment"
Source: ACNielsen “What’s Hot” by the numbers
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The numbers are in…
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Source: ACNielsenTl U.S. Grocery & Drug, Liquor Mkt Aggregate
North American 3 L Cask - 52 week rolling $FROM SEPTEMBER 2003 TO SEPTEMBER 2005
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
$50,000,0009/
27/2
003
10/2
5/20
0311
/22/
2003
12/2
0/20
031/
17/2
004
2/14
/200
43/
13/2
004
4/10
/200
45/
8/20
046/
5/20
047/
30/2
004
7/31
/200
48/
28/2
004
9/25
/200
410
/23/
2004
11/2
0/20
0412
/18/
2004
1/15
/200
42/
12/2
005
3/12
/200
54/
9/20
055/
7/20
056/
4/20
057/
2/20
057/
30/2
005
8/27
/200
59/
24/2
005
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2005 - US Trend A.C. Nielsen
3 Liter ''Cask'' Wine Fastest Growing Segment in the US at 47.40%
$ Volume, 52 wks ending 7/30/05
$ Volume % Change vs. Year
Ago
Equalized Unit (a) Volume 52 Wks Ending 7/30/05
Equalized Unit (a) Volume % Change
vs. Year Ago Total Table Wine $3,890,686,430.00 8.80% 63,775,926 3.50%
Total Boxed Table Wine $231,000,872.00 12.00% 11,436,020 3.70%5L $199,083,397.00 5.40% 10,525,342 1.00%3L $30,681,268.00 77.00% 890,904 47.40%
3L less Than $12 $18,060,006.00 24.80% 651,128 19.20%3L $12 - $15.99 $3,925,152.00 161.20% 82,784 155.30%
3L $16+ $8,696,255.00 536.70% 156,991 515.00%(a): One Equalized Unit is equal to 9 liters
As the chart above shows, while the entire table wine category is enjoying strong growth, dollar volume of three-liter cask wines is growing nearly nine times faster than the overall category. The highest-priced segment of 3L cask wines - those selling for $16 or more per unit - is growing nearly 61 times faster.
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2006 Package Growth Led by 3L Premium Cask; 2006 Package Growth Led by 3L Premium Cask; Significantly by the Significantly by the Dominant/TraditionalDominant/Traditional
750ml Package750ml Package
Tl Table Wine $ Share % Chg - Current Year $ vs YAG
750 ML 65.7% +10.5%
1.5 L 22.9 +3.0%
5 L 4.4 +3.1%
3 L Glass 2.6 -2.2%
4 L 1.7 +0.6%
3 L Prem Cask 0.7 +44.2%
1.3
0.1
+13.2%
+13.4%
187 ML
375 ML
Source: Nielsen, Total U.S. Grocery & Drug, Liquor Mkt Aggregate + Select Liquor Retailers, 52 weeks ending 12/16/06
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What are we doing to improve our products for wine?
Continually improving keyfeatures through:
•New Innovations in processes and materials
•Customer Feedback
•Internal monitoring ofprocesses
FlexTap
Durashield 34 and Durashield 34ES
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Continuous Improvement: Closure
•Improvement of product flow rate •Improvement of oxygen barrier properties of the actuating button
•Improvement of the oxygen barrier properties of the tap body
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TAP (Detail)
Internal o-ring seal
Spring and PlungerAssembly
Actuating Button
The FlexTap was the first front push tap created for bag-in-box wine dispensing. The unique, ergonomic design fits naturally in the hand, and in independent consumer studies
was found to be more comfortable / intuitive to use than other tap types.
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FlexTap (Details)
1 Actuator Button 2 Seal Plunger 3 Spring 4 Lifter “Cam” 5 Lifter “Ramp”
The flow rate of the original FlexTap by
adjusting the angle and height of the Lifter Ramp
(No. 5)
1
2
3
4
5
A slight lengthening of the plunger stalk was also incorporated into the spring assembly to increase “tap closed” preload pressure on the o-ring seal (further enhancing integrity of valve seal).
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Improved flow rate over original fitment
Flow Rate (oz/sec at approx 8" column height)
High Flow FlexTap
(1.8oz/sec)
Original FlexTap
(.8 oz/sec)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Avg ounces / sec @ 8" WC Height
ounc
es p
er s
econ
d
Ramp modifications more than doubled the average FlexTap Flow rate
(From .8oz/sec@ 8” WC height to 1.8oz/sec@ 8” WC height)
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0.54 0.38 0.280
0.10.20.30.40.50.6
cc/pkg/day
Typical O2 Transmission
Original FlexTap
Hi Flow FlexTap w/enhanced button material)
Next Generation FlexTapwith High Barrier Body
FlexTap Continuous Improvement: Oxygen Barrier
Improvement to the barrier properties of the FlexTap have been ongoing: The most recent Updates to the FlexTap (High Barrier Body Material) will bring the barrier of the tap down to The low O2 transmission rates of taps made completely of rigid material.
Intuitiveness / ease of use, highest level of aesthetic appeal, and the O2 barrier properties of Fitments of 100% rigid material. Tamper Evident. The best of all worlds, and still improving.
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Oxygen Ingress Over Time
26.3418.84
16.4412.24
237.06
169.56
147.96
110.16
0
50
100
150
200
250
cc/1
00%
O2
1 mo 3mo 6mo 9mo
Estimated Package O2 Ingress over 9 months: Latest version FlexTap vs. 1 piece molded spigot and competitor's taps
3L with molded spigot 3L with competitor tap
3L with competitor tap 2 3L with latest FlexTap
26.3418.84
16.4412.24
237.06
169.56
147.96
110.16
0
50
100
150
200
250
cc/1
00%
O2
1 mo 3mo 6mo 9mo
Estimated Package O2 Ingress over 9 months: Latest version FlexTap vs. 1 piece molded spigot and competitor's taps
3L with molded spigot 3L with competitor tap
3L with competitor tap 2 3L with latest FlexTap
Film Transmission Rate: .05cc/day @ 100% O2 / 254mm x 254mm sample: The area of a typical 3L bag(263mm x 314mm= 825.8cm) Multiplied by 2 (represents both
sides of the bag) equals the base package
Transmission rate without fitment. Fitment Transmission rates (Spigot: .75cc/day, Competitor 1: .50cc/day, Competitor 2, .40cc/day, FlexTap: .28cc/day) were then added
to the calculated bag transmission rate to complete the formula.
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Oxygen Ingress Over Time (Small reductions add up)
237.06cc 169.56
cc100
120
140
160
180
200
220
240
cc/1
00%
O2
9mo
3L with molded spigot 3L with competitor tap3L with competitor tap 2 3L with latest FlexTap
38cc reduction over 9 months (FlexTap
vs. competitor)
147.96cc
110.2cc
A 38 cc ingress reduction over 9 months might not seem significant, but if that difference is divided by the average daily O2 Transmission rate of a FlexTap 3L
bag (.408cc/day), an estimated 93 day’s worth of O2 ingress is saved
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Progressive Filling Solutions
Web-Fed Inline Automatic
Web-Fed Rotary AutomaticSemi-Automatic
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Nitrogen “Puff” Tap Cavity Gassing System
• Nitrogen flow controlled by the fill valve position sensor (Fill valve in filling position – gas on, filling tap cavity. Fill valve in ready position – gas off).
• Nitrogen flows under the uncapped tap to flush out resident air in the tap’s internal cavity.
• System is easily integrated into the existing nitrogen “puff” feature** of thefilling valve
**N2 puff feature on the filling valve itself purges the vacuum valve and “puffs” a small amount of nitrogen into the bag spout neck prior to bag recap.
Nitrogen Tap Gassing System
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•Product is visible in the filled package
•Entrained air in the package is clearly visible
• User can see the product in the filled package
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Making it all happen through:
•Proven startup processes
• Dedication to package testing
•Global technology Resources
•A focus on innovation
•State-of-the-art product development
•A commitment to packagingpartnerships
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