Canned wine is no longer a fad, it's a $45 million business

  • Sales of canned wine grew 43 percent in the U.S. from June 2017 to June 2018.
  • While canned wine is still a tiny portion of the wider industry, it is one of the fastest growing categories thanks to millennial drinker.
  • These cans can be brought to places that glasses cannot, like the beach, the park and campsites and are also easier to recycle than glass bottles. Some casual drinkers also see canned wine as less pretentious.

It's time to ditch your corkscrew. Canned wine isn't just a passing summer fad, it's a $45 million business, according to Nielsen.

Wine in cans with pull-tops instead of corks isn't new, but it has become a staple for young drinkers over the last few years and the trend shows no sign of slowing down. Sales of canned wine grew 43 percent in the U.S. from June 2017 to June 2018, according to BW 166, a beverage alcohol market research firm.

While canned wine is still a tiny portion of the wider industry, with about 0.2 percent of total wine sales, it's growing rapidly thanks to millennial drinkers, according to Nielsen data. By comparison, bottled wines grab nearly 90 percent of the industry's sales, but are growing much more slowly. (Boxed and bagged wines take the remaining market share.)

Compared with previous generations, today's young adults are more likely to drink wine than beer, Ray Isle, executive wine editor at Food & Wine, told CNBC. However, they don't have as much disposable income, making more affordable wines in cans more appealing.

"Millennials aren't looking to spend $70 on a bottle of wine," Isle said.

On average, a 750-milliliter bottle of wine will cost between $11 and $25. Whereas, canned wine drinkers pay about $4 to $7 for a 375-ml can. These cans are the equivalent of a half of a bottle or, about 2.5 glasses of wine. Some wineries are packaging their wine into even smaller cans of 250 ml (about two glasses of wine) and 187 ml (about one glass of wine).

These cans can be brought to places that glasses cannot, like the beach, the park and campsites. Wine cans are also easier to recycle than glass bottles and are seen as less pretentious to casual drinkers.

Single servings of wine can be good for wine makers, too. One in four wine consumers said they would be more open to trying new wines if they didn't have to buy a full-sized bottle, according to research by E. & J. Gallo Winery.

The surge in popularity of canned wine has led to a massive boom in the number of brands launching their own cans. Over the last three years, the market has grown from about dozen brands to more than 100, including big names like Barefoot, Trader Joe's Simpler Wines and Francis Ford Coppola.

In 2017, E. & J. Gallo Winery's Barefoot brand produced more than 12 million cans of its wine spritzers. So far this year, the category has grown 31.1 percent, the company said.

Barefoot's wine spritzers come in five flavors: summer red, crisp white, Moscato, red sangria and rose. These products accounted for more than 58 percent of the canned table wine sales last year and 61 percent of that category in the last 52 weeks, the company said.

Another E. & J. Gallo Winery brand, Dark Horse, offers rose and pinot grigio in cans, and saw sales growth of 38 percent in its canned wine over the last 52 weeks.

House Wine, owned by Precept Wine, one of the largest privately owned wine companies in the Northwest, currently has four of the top 10 canned wines on the market — its rose, rose bubbles, red blend and chardonnay. By the end of the year, canned wine will represent 50 percent of the brand's volume, the company said.

House Wine also offers brut bubbles, sauvignon blanc, and pinot noir, among others in cans.

While a handful of brands have offered canned wine in the last decade or so, including Francis Ford Coppola's Sofia brand, the category didn't take off until around 2014. The explosion was thanks, in part, to Union Wine Company and Infinite Monkey Theorem, indie wine makers on the West coast, Isle said.

"Truthfully, the idea came from one of our wine-induced brainstorming sessions during the rebranding process," Ryan Harms, the owner and founder of Union Wine, told CNBC. "The wine in a can is a direct reflection of our company philosophy – making great craft wine minus all the fuss."

The demand for the canned wine is so great that Union Wine had to build its own 43,000-square-foot bottling and canning facility. Now, production of its Underwood canned wine has outpaced its bottled wine. This year, 55 percent of its wine was packaged into cans.

"We're making this investment because our bottled wine sales continue to improve and the demand for the Underwood cans is growing rapidly," Harms said.

Of course, all innovations come with critics.

Despite its growing popularity, some might argue that canned wine doesn't have the same romance as a traditional wine bottle. Others say the can itself may reduce the aromas of the wine, and thus the taste.

But "the category is just fantastic fun," said Catherine Bugue, director of education at Napa Valley Wine Academy. She said it offers people an easy and convenient entry into the industry. Not to mention, "it can be good wine," she said.

Devon Broglie, master sommelier and chairman of the Court of Master Sommeliers Americas division, said canned wines are "very drinkable" and a "solid value for the money."

While he predicts the incredible growth of the canned wine industry will start to stabilize over the next few years, he expects the market will continue to expand in selection and quality.

"[Canned wine] is not to be frowned upon, at all," he said.