September 2021 | News | Vertical Focus

Vertical Focus | Beer, Wine & Spirits

Tags: Food Logistics

Some States in Low Spirits

Liquor shortages in several U.S. states will likely continue into 2022, local news outlets report. Bars and restaurants struggle to stock their shelves now that some COVID-19 mandates are lifted and consumers venture back out, and the high demand is straining supply. Three reasons why:

1. State limitations: North Carolina establishments must purchase alcohol from the state Alcohol Beverage Control (ABC), and Vermont and Ohio from the Division of Liquor Control. These state-run spots have been inconsistently stocked, with July 2021 sales at ABC stores up 38% compared to July 2019.

2. Labor shortage: The labor shortage among truck drivers, dock workers, and warehouse employees on top of congested ports, slower manufacturing, and more expensive raw materials has disrupted liquor supply chains and small businesses across the country.

3. Materials: Not only is there a lack of glass bottles, aluminum cans, corks, and kegs for small breweries and distilleries, but also packaging materials such as the paper for labels and the crowns that sit on top of bottles.

Uncorking Sustainable Bottles and Packaging

A new generation of packaging could make wine, spirits, and beer production cheaper, faster, and more sustainable. Here's a look at some packaging innovations in the works, the Beverage Media Group reports:

New plastics: British packaging company Garçon Wines created a flat wine bottle made of recycled PET, which is 87% lighter than glass. It packs tightly into cartons without added packaging, fitting 91% more product on each pallet. Better use of space, shorter loading time, and faster deliveries add up to savings for winemakers and a 50% reduction in emissions.

Replacing glass: Frugalpac's paper bottle, similar to a bag-in-box but molded into a Bordeaux-style bottle shape, is made from 94% chemical-free, recycled paperboard fused with water-based glue. Five times lighter than a glass bottle, it resists spills, humidity, and breakage from a five-foot drop. And its carbon footprint is 84% smaller than glass.

Six-pack rings: Corona recently introduced a recycled barley-straw six-pack holder. Design firm Spearhead Group eliminated plastic packaging for Don Julio's margarita kit, replacing it with a clamshell case made from bottle-hugging cardboard, which is cheaper and 20% lighter.

Returnable bottles: New York-based startup Good Goods created a reusable wine bottle, and gives a $1 store credit for each returned bottle. The incentive works: The pilot program saw an 88% return rate among 4,000 consumers.

Shrinking product: BrewVo's patented brewing method separates out water and alcohol, producing a nonalcoholic beer with six times the flavor density. It's shipped in a small bag-in-box, and water and alcohol is added at the destination. It's 86% lighter than kegs, significantly reducing shipping emissions.

On-Demand Alcohol With a Slurpee Chaser

On-demand delivery became essential during the pandemic as consumers ate and drank mostly from home—so much so that it has become an expectation. As a result, 7-Eleven is upping its convenience factor by delivering beer and wine to consumers' doorsteps in 30 minutes to one hour.

The convenience store chain teamed up with Minibar Delivery, an alcohol delivery service provider, to provide the new service. The initial launch will take place across 600 7-Eleven stores in Florida, Texas, and Virginia.

Consumers can use Minibar Delivery's app or website and choose from 7-Eleven's wide selection of wine and beer, as well as the store's top sellers such as Slurpees, hot dogs, pizza, and chips.

In the past year, 7-Eleven's delivery footprint has more than doubled, with 90% of its stores offering delivery via third-party providers or its app, the company says.

Anheuser-Busch: Sustainability on Tap

Big brewer Anheuser-Busch is investing $64 million to install solar panels and emissions-reduction technology at its Los Angeles brewery, the largest solar installation of any brewery in the United States. Its other green initiatives include:

  • Making all domestic beer with 100% renewable energy by 2021.
  • Reducing carbon emissions by 25% across its value chain by 2025.
  • Making 100% of its packaging from majority recycled content or returnable content by the end of 2025.
  • Recently started bringing products to market in cans made from low-carbon aluminum.
  • Implementing How2Recycle's labeling system to help consumers recycle and address the end of its value chain.
  • Rolled out the new label in summer 2021 for its Bud Light products, the first major beer to use the How2Recycle label.

Grab-and-Go Cocktails Shake Up Manufacturers

Consumer demand for healthier and more convenient alcoholic beverage options is overflowing. Manufacturers are getting into the mix by introducing more single-serve packaging such as cans, as well as lower-alcohol products. Shippers and service providers should keep an eye on these liquor supply chain trends, says ResearchAndMarkets.com:

  • Spirits-based, ready-to-drink cocktails, typically available in single-serve packaging, will maintain the largest revenue share from 2021 to 2028.
  • Cans rapidly gain ground in the wine industry due to convenience (no corkscrew needed), lower costs, and recyclability.
  • In terms of packaging, cans will experience the highest growth due to increasing demand for easy-to-carry, grab-and-go packaging.
  • Canned wine is easy to store and stack, making it a preferred option for e-commerce distributors.
  • Wine-based drinks, perceived as healthier than spirits and malts, are the second fastest-growing segment.
  • Consumers are switching to lower-alcohol drinks flavored with juices such as lemon, cranberry, orange, and passion fruit.
  • As more organic, gluten-free, and keto-friendly ready-to-drink cocktail options become available, more consumers are buying them.
  • More premium options for pre-mixed cocktails with high-quality flavors, taste, and package design will enter the market and drive growth.

Craft Brewers Can't Can IT

Breweries embraced to-go-friendly cans instead of kegs when bars and restaurants shut, and now are struggling to find aluminum can suppliers due to high demand.

States with a high concentration of craft breweries are more affected than others. For example, more than 30 breweries in Colorado shut down during the pandemic.

Because more consumers seek sustainable alternatives to single-use plastics, the demand for cans won't likely subside. On top of that, sales of canned hard seltzers bubbled over to more than $4.6 billion in the past year, Nielsen reports.

A few U.S. can manufacturers exist, but they mainly work with large brewers like Anheuser-Busch or Molson Coors. Most craft brewers, defined as producing 6 million barrels of beer or less per year, don't have access to the same resources.

Consequently, some brewers are sticking new labels on empty cans stamped with beers they no longer sell. Some breweries that didn't package beer on-site before the pandemic have added small canning lines or hired mobile canners that bring equipment to the plant.

Ball, one of the world's largest can producers, is increasing new production lines and building three new plants, adding at least 6 billion units of can capacity.

Deutsche Post DHL bellies up to the bar

In its largest acquisition in 16 years, Deutsche Post DHL inked an agreement to purchase Germany-based J.F. Hillebrand, which focuses on ocean freight forwarding, transportation, and logistics for beverages, bulk liquids, and other products requiring special care.

Hillebrand brings specialized capabilities that will provide DHL customers, particularly in the alcoholic beverage, food, and bulk liquid segments, with additional value-added services, the company says.

For example, it will provide access to high-quality flexitanks, which are flexible bladders that fit inside standard shipping containers, and used to transport liquids in bulk. Hillebrand's IT platform will also fit well with DHL's suite of tools and digitization strategy, which focuses on simplifying and optimizing customers' shipping processes.

While DHL Global Forwarding already offers specialized alcohol delivery with its Gori wine and spirits business, Hillebrand will add new services that increase volumes on several trade lanes, the company says.






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