An inside the box solution to selling Virginia wine for less

THE WORKING POUR

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Quality and quantity: Virginia Wineworks' bag-in-box option not only lasts longer, it's less expensive for both producer and consumer. Photo courtesy Watermark Design Quality and quantity: Virginia Wineworks' bag-in-box option not only lasts longer, it's less expensive for both producer and consumer. Photo courtesy Watermark Design

When I told a wine-loving francophile that I’ve been drinking wine from a box, he looked at me with such horror that I quickly followed up with, “I pour it into a glass first, of course!” His disgust had nothing to do with the image of me holding my mouth below the spigot in my fridge, but rather with the notion of drinking what he presumes is swill. It’s a prejudice held by many, yet, surprisingly, it’s us new world Americans upholding the stigma more than the old-world Europeans.

Fair enough, if we were talking about the boxed junk of the 1970s. However, not only is the wine inside today’s boxes the same quality wine that goes inside a bottle (and often at half the price), it’s also likely to taste better longer since the collapsible plastic bladder within the box creates an airtight seal down to the very last dribble. Europeans already know this—nearly half of the wines sold in Norway and Sweden are bag-in-box wines, and even in wine-traditional France, they account for about 18 percent of wine sales. Stateside, bag-in-box wine has been the fastest growing segment of the market for a couple of years now, though it still occupies only about 10 percent of market share.

Michael Shaps, who splits his time making wine in Virginia and Burgundy, says that half an aisle of his French grocery store is devoted to boxed wines. “The French are price conscious as well as very green. If you drink wine at lunch and dinner, then the box goes a long way,” he said. In late 2010, he and partner Philip Stafford took the cue and put three of their already value-oriented Virginia Wineworks wines into a three-liter bag-in-box. Now, instead of paying $16 per bottle, customers can get the equivalent of four bottles for around $40—buy two-and-a-half and get one-and-a-half free. It’s exactly the same Virginia-made wine from Virginia-grown grapes that goes into the bottles, so how can it cost so much less?

It all comes down to the costs of goods sold, and Shaps broke it down for me. Each pre-made bag costs 50 cents—and a glass wine bottle costs 75 cents. Since the bags get filled with four bottles worth of wine, the per-bottle cost for the bag becomes 13 cents.

The recyclable boxes that house the bags cost 60 cents, or 15 cents per bottle. The labels, corks, and capsules (see Winespeak 101) that bottles require cost a minimum of 60 cents and a maximum of $1 per bottle. Even using the minimum cost, we’re at 28 cents per bottle for the bag-in-box and $1.35 for the glass bottle.

And there’s still labor to figure. One person can operate the bag-filling machine, sealing 2,000 liters (or about 2,667 bottles) in six hours. At a $20/hour rate, that’s about 5 cents per bottle. The bottling line, which requires four people (though only four hours) to seal the same amount, brings each bottle’s labor cost to 12 cents.

Add it all up and compare the bag-in-box’s 33 cents total to the glass bottle’s $1.47. That’s a $1.14 savings.

Consider too that 2,000 liters of bag-in-box wine can be stacked to occupy 160 square feet, whereas 2,000 liters of wine in bottles fill 56 cases, which go on to four pallets, occupying 384 square feet. Also, bags in boxes weigh less and are at little risk for damage (in fact, Shaps jumped on a filled bag to demonstrate their durability), thus shipping costs less.

None of this even speaks to the bag-in-box’s environmental friendliness—it’s estimated to use 91 percent less packaging than bottled wine and has only 21 percent greenhouse gas emissions.
It seems that in a state where our wine’s quality-to-price ratio is often up against scrutiny, more Virginia producers might be bagging their wines, yet Virginia Wineworks remains the lone soldier. The demand’s certainly there—both the Virginia Wineworks Chardonnay and Viognier bag-in-boxes sold out months ago. Shaps and Stafford tripled their bag-in-box production this year and are adding a line of $32 nonvarietal boxes for sale in the tasting room. The new Chardonnay and Viognier will be out before Christmas, and the blends by January.

Across the pond in Meursault, Shaps, who recently bought out his French partner, will start bagging some of his Maison Michael Shaps wine for sale in both France and Virginia. Maybe next he’ll start selling his Virginia boxes in France.

WINESPEAK 101
Capsule (n.): The wrapping that covers the bottle closure and most of the bottle’s neck. Once made of lead, they are now made from plastic, tin, aluminum, or composites.

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