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WBWE 2023: Bulk and the path to Cop 28

Published:  24 November, 2023

As the global supply chain continues to operate in a state of flux, bulk shipping is becoming an increasingly attractive – and sustainable – proposition for wine businesses around the world… if only the required number of flexitanks and containers remain in operation.

This week’s World Bulk Wine Exhibition (WBWE) demonstrated how far bulk has come on its re-branding journey to become a viable shipping operation for premium wine businesses around the world. From the Wine Society, which began pushing into deep sea shipping around 18 months ago, to retailers like Waitrose, bulk is increasingly leaving behind the prejudices of old and sailing into increasingly accepted and sustainability focused waters.

Climate action is now more urgent than ever. On Monday 20 November – the same day as the opening of the WBWE – the UN released its Emissions Gap Report 2023. Offering sobering reading, the report shows how, by the end of this century, the globe will have warmed by between 2.5C and 2.9C above pre-industrial temperatures, sitting far above the 1.5C set by the Paris Accord in 2015.

Even if the UK, US, China and the EU hit net zero in line with their targets, the planet is still set to experience catastrophic levels of climate change, with the “most optimistic scenario”, of limiting warming to 1.5C sitting at about 14%.

Increasingly, the wine industry seems to be turning its eye to bulk as part of a 360 degree approach to lowering carbon emissions.

Former supermarket buyer and founder of paper bottle brand Interpunkt, Andrew Ingham, set the tone for the fair when he said, “BWS is the single worst emitter of CO2 in any supermarket. I was under pressure as a buyer to address this, but sales and profit are a big thing too. People also say ‘well, glass is the most recycled material’. But actually, only 30% gets recycled and it costs more in CO2 terms in order to recycle a glass bottle with the amount of heat needed.

“There’s no magic silver bullet. We all need to do something.”

“The Wine Society is relatively new to modern bulk shipping,” added Simon Mason, head of wine sustainability and due diligence at the Wine Society, at a session hosted by the Sustainable Wine Roundtable (SWR).

He went on to point out that the company was founded on a more traditional idea of bulk with “barrels of Portuguese wine arriving in and being bottled in the UK. It just goes to show there are no new ideas, just rediscoveries of old ones.”

Today, the retailer is pursuing successful trials of alternative format, bulk-shipped wines, including a “top Burgundy” into BiB and another wine via flat bottle producer Packamama.

Bulk shipments still only represent a couple of per cent in terms of sales for the society. But Mason acknowledges that “In terms of de-carbonisation and reaching our target of getting all three scopes to net zero by 2040, we’re going to have to make significant changes in the way we do things.”

Barry Dick MW, BWS global bulk wine sourcing manager at Waitrose, shared: “There was maybe some prejudice against bulk shipping among some colleagues when I was first brought into this role, which was partly to look at bulk as one of the best efficiencies to improve the range. But that’s largely disappeared. We agree now that it can be done in a great way technically, particularly now that own and private label is increasing around the world… and retailers are in charge of two-thirds of their own range. Bulk is now accepted from a quality point of view… and in terms of de-carbonisation, it’s the starting point for a great discussion.”

One sticking point in the bulk supply chain might be this year’s globally scant harvest. The OIV’s latest figures estimate that global production in 2023 plunged to its lowest volumes since 1961 – a result of extreme weather in both the north and southern hemispheres.

The will to ship by bulk is clearly growing. However, the slowdown of wine production in 2023 led to a significant decline of global container rates this year, leading to a concern that some containers and tanks could be removed from circulation, and set back the bulk market by several years.

“Before Covid, bulk shipping was an invisible industry, but it became visible during Covid, because everyone was talking about it,” Horst Muller, global head of VinLog, said.

“Now, freight rates are low and there’s no congestion, which is a good thing for wineries in the short term. But over the next few years, the oversupply of shipping containers is going to be hugely problematic, as we have the renewal of freight contracts happening in a depreciated market. There just isn’t enough volume right now.”

In 2023, wine remains a highly globalised market. Last year, a total of 46% of wines consumed worldwide were imported, while for every two bottles of wine consumed, one bottle will have crossed a border.

This is “good news for the future of the wine industry”, Neslihan Ivit, head of unit oenology and methods of analysis at the OIV said, though the sector is also experiencing a tough trading environment with “consumption decreasing and costs increasing”.

The UK leads the way in bulk importation in many respects: it is the world’s third-biggest importer of bulk wine by volume and first by value, while also carrying the highest average price per litre.

In terms of how the dial is moving towards bulk wine shipping and the availability of alternative, sustainable formats, it seems we might see change faster than we expect – largely as a result of legislation.

“It’s coming for glass bottles,” Rob Malin, CEO & co-founder of When in Rome, said.

“Carbon taxation is happening across the EU. The UK isn’t in the EU obviously, but we copy their homework. That’s the future.”

Johan Arno Kryger, Nordic sustainability director, Hans Just Group, a distributor of wine and alcohol to the Nordic countries, agreed there is “Rapidly growing interest in reducing emissions in our part of the world. The new directive from the EU is making companies accountable on a whole new level. There’s a huge opportunity with bulk shipments to address those targets.”

“We’re seeing a complete transformation of society now with regards to sustainability and the environment. At the same time, I think we’re also not sure exactly what to do with it or which direction to go in. It’s a case of flying the plane as we build it,” he added.

In the state-owned monopolies of Norway, Sweden and Finland, the countries’ governments have officially aligned themselves with the Paris Agreement, making them accountable to specific science-based targets. This packs a considerable punch considering the government is accountable for the entire alcohol value chain in these markets, where they are currently looking to make various ambitious reductions in their scope 3 emissions, some by as much as 50%.

Meanwhile, Free Flow Wines – the US leader in aluminium steel kegs for wine on tap – has found success with a business model which ships 90% of its wine in bulk via flexi tanks or reusable steel tanks. The business model is based on offering prolonged freshness of the tanks (up to three months minimum), by using a mixture of both nitrogen and CO2, the same mixture used in Guinness kegs.

The savings to the on-trade have been considerable, Barclay Webster, vice president of business development, says. On average, operators are pouring 10-20% of their by-the-glass offering down the drain, while for some, that number rises to 45%.

“Boomers were left with a bad impression of wine on tap, so we’re still fighting against that. But we’ve focused on zeroing in on the problems, for example, moving away from low-grade steel, which gives an unpleasant sulphur note,” Webster said.

Thousands will be heading to Dubai in early December for COP28, the annual international climate summit held by the UN. With the future on the line, collaboration was a key theme running throughout the WBWE.

On the one hand, collaboration can mean a joined-up approach across a business’s action plan. This means using a variety of emission-reducing strategies, from switching to electric last-mile delivery services to alternative formats, working in tandem, of which bulk plays a part.

As Mason said: “No one measure is going to get us there.”

But collaboration can have a much broader application too, stretching not only beyond the supply chain to consumers, but beyond alcohol entirely, to other sectors.

Kryger concludes: “The future will be the entire ecosystem working together. There’s an old Danish saying, ‘If you want to go fast, go alone. If you want to go far, go together’. I think we’ll see that soon. In terms of collaboration and what can be achieved, it’s very exciting.”