With e-commerce flourishing due to the pandemic, wine suppliers are looking for more efficient ways to package and deliver their products.
The market is diversifying in terms of packaging formats with people buying wine in various formats to suit the occasion.
Sustainability remains a big priority for the industry, with suppliers seeking to reduce their environmental impact.
Richard Lloyd, General Manager, European Operations and Supply Chain at The Park, Europe’s largest wine packaging company, tells Grocery Trader what are the biggest trends in the wine category and how the wine industry can become more sustainable.
Tell us about The Park. What does the company do?
The Park is Europe’s largest wine packaging company, offering producers a range of multi-format packaging, distribution and storage. We provide customers with innovative, bespoke solutions from grape to bottle with a sustainability-first mindset. We became an independent packaging business, rebranding as The Park, in 2020 and since then have been growing at pace, currently packaging 1,000,000 bottles and 150,000 bags of wine daily.
What have been some of the company’s biggest achievements so far?
In the last year, we’ve grown production by 25% – that’s an increase of 10m cases – and as a result of this rapid upwards trajectory, we’ve recruited an additional 50 staff members during that time. Furthermore, we’ve made significant investments to increase the capability and capacity of our site yet further. In the midst of a tumultuous period, it’s an exciting time for The Park. We now work with many of the top 20 wine brands in the UK and are responsible for 25% of the wine sold nationwide.
We’ve also been able to instill effective sustainability initiatives throughout all that we do at The Park to lessen our environmental impact, which is vital for the health and longevity of the world we live in. We’ve successfully become a certified carbon neutral site and use our own on-site wind turbine to provide 50% of the electricity used, we also send zero waste to landfill.
Navigating the unprecedented and complex challenges of our first year as an independent packaging business has been an enormous accomplishment. The impact of the pandemic on businesses has been well-documented and, when coupled with Brexit and the worst shipping crisis on record, this makes me even prouder of what we’ve achieved during this time.
Of course, we’ve also been delighted to receive external recognition for what we’ve achieved, such as the 2018 UK Manufacturer of the Year award. Together with our team’s collective thirst for knowledge and commitment to continuous improvement, it’s these foundations that have enabled us to go on and become the continent’s leading wine packaging facility.
What is the value of the UK wine market?
900 million litres of wine is drunk annually in the UK.
Within this, we’ve seen a gradual move to more wine coming into the UK in bulk and The Park is at the forefront of this trend. Since its inception 10 years ago, over 90% of the wine distributed from The Park has been brought to the UK in bulk.
What are the biggest trends in the wine category at the moment?
The pandemic has accelerated changes in purchasing behaviour and drinking patterns and we’ve been able to react to this with our flexible and innovative approach. For example, with eCommerce flourishing, business-owners are looking for more efficient ways to package and deliver their products – our 100% recycled flat bottle is a perfect example.
Perhaps even more significant is the growth in interest for different formats. People are increasingly buying wine in multiple formats to match different occasions – for example, choosing cans for when out drinking with friends, smaller size glass bottles for drinking in moderation at home and bag-in-a-box for more social occasions.
And of course, sustainability continues to be a huge focus for the category. We are all accountable for the environmental impact of our businesses and need to find ways of reducing this throughout the supply chain. All of the team at The Park are passionate about finding ways of implementing more sustainable practices in order to lighten our environmental footprint through continuous learning and development, and across the company we have made an ongoing commitment to put the planet first and reduce non-recyclable plastic and water consumption. The Park is proud to be certified carbon neutral and we even have our own wind turbine on-site, which provides us with 50% of our energy. We are also certified to package organic and Fairtrade products.
What effect has Covid-19 had on the wine market?
Covid-19 has had a significant impact on the wine market. Illness and the so-called ‘pingdemic’ have led to labour shortages, massively affecting production and distribution capabilities across the supply chain, whilst the closure of the hospitality sector has had a knock-on effect on on-trade business.
But it’s not all doom and gloom for the sector. Covid-19 has forced wine producers to explore new avenues and there are some signs of a resurgence, fueled in particular by a growth in the off trade due to the increased demand for enjoying wine at home.
Consumers are now taking the opportunity to become more engaged in wine and be more confident about experimenting. Furthermore, we’ve seen an increased thirst for more convenient formats to match multiple occasions, including cans, smaller sized glass bottles, PET bottles and boxed wine.
Is the wine industry doing enough to be sustainable? How can it be more sustainable?
Sustainability is incredibly important, not just to customers but for the long-term health of the planet. We all need to take responsibility for our impact on the world around us and seek out ways of reducing this footprint. And the wine industry definitely needs to play its part – from more biodynamic agricultural practices to product packaging and shipping.
The Park is playing a huge role in this by aiding more businesses to use its carbon-neutral facility and also optimising distribution to customers through consolidation of products and fewer trucks on the road, ultimately reducing carbon footprint.
Our entire workforce is committed to reducing the environmental impact of The Park. As a result, we’ve led the way for the sector for several years, sending zero waste to landfill because there is increased care when sorting waste and identifying those products that have sustainable waste streams. 100% of the energy used on-site is renewable, with 50% of this coming from our own wind turbine – in fact, the largest allowed on shore in the UK. And we’ve no intention of stopping there! In just the next 12 months, we’ll have the first electric HGV in the UK and will be installing solar paneling, and we are also looking at making our 3-D printing closed loop, by using waste plastic on-site as printing material for us to make machine parts out of.
One of the biggest challenges we see is the use of stretch wrap throughout the wine packaging process and this is an area that we, at The Park, feel particularly passionately about. There needs to be, at the very least, a significant reduction in its usage for the wine industry to become greener and we’re already implementing initiatives here to eliminate stretch wrap from our processes by 50% by 2025. We are also aiming to be the first to have a completely plastic-free pallet with primary, secondary and tertiary packaging.
What’s important is that we take an interest not just in what’s happening in front of us on our premises, but along each step of the supply chain to ensure that we are doing everything possible to reduce the environmental impact of wine production. At The Park, we work with the Carbon Trust to achieve this and have set ourselves ambitious goals to reduce non-recyclable plastic and water consumption on-site. This partnership allows us to map the supply chain of a selection of our brands to ensure its carbon footprint is understood and offset from grape to bottle. This also provides a labelling option for the products that utilises our carbon neutral position to ensure consumers understand the environmental journey of their favourite brands, a vital resource when faced with the current climate crisis.
Do you think lower ABV and lower sugar wines are set to grow?
Yes, definitely so. Consumers are focusing more on their health and wellbeing and the trend for “clean drinking” and reducing alcohol consumption by drinking in moderation is driving demand for more innovative and creative “NOLO” options, enabling them to match the strength of the wine to the drinking occasion. IWSR recently reported that it anticipated consumption of “NOLO” drinks would grow by 31% by 2024. The Park is leading this movement through its on-site capability to reach any ABV from 0% upwards, as well as offer multiple formats for convenience. And it’s the same for low-sugar wines, because consumers are more informed about health and they are actively looking for products that deliver clear health benefits.
How is the current shipping crisis affecting the wine industry? Is there a delay in wines reaching supermarket shelves?
With the largest proportion of wine drunk in the UK coming from New World countries, the volatility and uncertainty of shipping is causing inefficiencies throughout the supply chain, which is ultimately ending in an increase in the number of products being out of stock for periods of time. With the cost of inflation also putting pressure on overall supply chain costs, it’s an incredibly challenging time for the wine industry.
Do you see bulk wine as a buffer against delayed shipping and a cost-effective way to keep stock moving?
I see the ability to have stock at different points in the supply chain as critical to “buffer in” the volatility and variability of shipping. Having the right mix of wine in bulk is the optimum way to attempt to mitigate the impact of the global shipping crisis.
Does The Park have any new packaging launches coming up?
Whilst I can’t go into specifics, we are working with a number of exclusive partners to develop some formats that aren’t even in the market yet. We’ve also been working with our customers to look closely at purchasing patterns to determine whether the traditional secondary packaging formats – single bottles or boxes of six – are still relevant. Responding to shifting dynamics in how people purchase and consume wine these days, we’ve already had enormous success with our 4-pack and 10-pack products.
We are also trying to improve the customer service of own label wines with an exciting new customer portal that makes it easier and more efficient for customers to access tangible data and our continuous improvement principle of “understanding value in the eyes of the customer”.