One of New Zealand's largest exporters of canned wine has launched a multimillion-dollar expansion into North America.
Wairarapa winemaker Joiy Wines moved into the lucrative US market after being approached by $16 billion retail chain Wholefoods, following a win in a major canned wine competition.
The international market for canned wines is growing at a rate of 13 per cent per annum and is projected to reach over $807m by 2028.
In contrast, the bottled wine category remains stagnant with a growth rate of 4 per cent.
The wine industry has struggled to attract millennials and small format options are increasingly seen as a way to deliver a more portable, environmentally friendly and portion-controlled product to this health-conscious market.
Joiy Wines, the first local winemaker to export canned wine, now produces over 700,000 cans for five markets around the world each year.
The company is on track to double its annual sales volume this year and is now the top-selling canned wine in Canada, the world's largest liquor buyer and one of nine countries where the government operates the retail sale of alcohol as a monopoly.
A successful entry into the US will represent Joiy's largest export opportunity to date and could see production volumes increase to over seven million units per annum - providing a significant boost for local growers, particularly in Marlborough.
The wine industry had struggled to attract an emerging millennial customer base, Joiy Wines co-founder Cath Hopkin said.
The company's focus from the outset had been taking premium wines into small-format packaging, Hopkin said.
"The domestic and export demand is now there, and we are seeing small format wines resonate strongly with millennials as well as our core target demographic aged 35+ who are choosing these products for a range of convenience and health reasons - such as portion control, lower alcohol, sugar and calories.
Cans also allowed Joiy Wines to address shortcomings of the bottled wine format - including the challenges around heavier shipping weight and fragility of glass, Hopkin said.
"The technology we use has now advanced to the point that the lining of can protects the premium wine better than glass, preventing light strike and allowing us to produce a product that is shelf-stable for four years - a significant competitive advantage for us on the international market."
The idea of canned wine was met with a lot of "raised eyebrows" from the local industry, Joiy Wines winemaker and co-founder Chris Archer said.
"Many were surprised at what we were doing as it went against their traditional pathway, making it a very lonely time for us."
In contrast to the industry-led transition from corks to caps, the growth of canned wines was consumer-driven and evolved over a longer time frame, due to competition from RTDs, he said.
"We are also getting a lot of export success in Government-run monopoly markets like Canada and more recently Norway, where we can compete on a level playing field against much larger suppliers."
Joiy Wines' successful entry into the US market would put pressure on an already limited local grape supply, with projections suggesting production volumes could increase tenfold overnight, Archer said.
Hopkin says the brand was born out of a desire to demystify the wine industry and its "wine speak" by showing it to be fun.
"We know that for those that do not grow up with wine, the beverage can be off-putting - the words are foreign and there is a lot of pomp and ceremony which is great in one way but can also be really quite negative in others."
The venture had been "a roller-coaster ride" so far Hopkin said.
"We're a team of two and while it can present some challenges it means we can move quickly and respond to consumer trends and desires."