Since launching in 2020, Frugalpac’s innovation has disrupted wine shelves across the world, from independent stores to supermarket giants. Five years on, Ciaran Dickson, Commercial Manager Machine Systems at Frugalpac discusses the wine and spirits landscape.
It's a time of significant challenge for the wine markets. Globally, wine sales are at their lowest in more than 60 years[1]. If there was ever a time when disruption was needed, it’s now.
Enter Frugalpac. A world-first paper bottle for wines and spirits, the Frugalpac bottle is actually a sophisticated take on the bag-in-box concept, consisting of a liner pouch inside a fully recyclable paper bottle. In addition, Frugalpac is committed to improving access to these innovations wherever it can, making its Frugal Bottle Assembly Machine available to purchase for forward-thinking businesses.
“There’s a need for companies to do something a bit creative and a bit different,” explains Ciaran Dickson, Commercial Manager for Machine Systems at Frugalpac, in conversation with London Packaging Week. “We believe that packaging is the way you can do that. Gone are the days where younger generations are buying into a heavy glass bottle for a picture of a chateau on the front of it. It just doesn’t reflect who they are.
“Our bottles come with 360 degrees of sustainability messaging, which really appeals to a younger audience. Our messaging at the moment is that there's a low-carbon sustainable packaging alternative. Is it there to replace all the glass in the market? As much as we'd love that to happen, no, it's not. It's still within a certain segment. But it's helping people to understand that there's an alternative to your traditional wine and spirits packaging.”
While the paper bottle is Frugalpac’s current headline-maker, Ciaran is keen to stress that there are many more strings to the company’s bow. The bottle’s success came as a result of the company’s sustainable packaging expertise, not the other way around.
“Our team of engineers will look at the incumbent packaging in a certain market and review it from a sustainability point of view,” he adds. “We’ll ask how sustainable that is, what materials are currently being used, and how easy it is to recycle. Ultimately, we’ll look at ways that we can target that to create something that is more sustainable at this moment in time.
“Most of the wine industry’s carbon footprint is actually coming from the heavy glass bottle. Not just the freight, but also the making of it – the dredging of materials, the high energy costs of producing glass, and so on. We were very aware that the industry needed something more sustainable.”
Threading the demographic needle
“At the same time, we knew wine and spirits are very traditional industries,” Ciaran continues. “In some Southern European markets, they still don’t believe in the screw cap, for example. It’s all cork and those chateau glass bottles. So we knew there were going to be some challenges – but at the same time, our own research showed that only around 5% of people would not buy the Frugal bottle.
“The demographics showed that these were mainly older consumers. What we see is that the younger audience is more in touch with sustainability, and they want something that reflects their image. Something a bit stylish, with branding all over the bottle.
“Then when you get into the 35-50 year olds, you see people with mortgages and kids, who don’t want to pay more for a bottle. These are people who will go to a shop and see what wines are available and affordable. But this demographic also contains people who are paying off their mortgage and are at a stage of life where they want to leave behind a positive sustainable impact. It’s quite a complex picture and we’ve been able to thread that needle.”
This market analysis is why Frugalpac’s business model is not solely centred on its flagship product – instead, the company focuses on the machine that produces it. With the global supply chain plagued by uncertainty, this approach offers customers a degree of stability that is sorely needed.
“We’ve got two machines operational in North America, and over 50 serious opportunities across all continents at the moment. That’s our business model,” Ciaran says. “We’ve been aware of changes like EPR coming, and then you add in things like taxes and tariffs being thrown around at the moment… shrewd businesses are going to be looking at how to cope.
“If you look into the US, most of their glass comes from China and India. The US is now our fastest-growing market because we already have the machines in the US, so it’s a benefit for us.”
The decision to focus on the machine branch of the business could not have been made at a better time. When every SKU shipped across the world costs more than ever, onshoring packaging production with a single machine investment is now a particularly appealing prospect for many of Frugalpac’s customers.
“Big brand houses have the resources to put a Frugal Bottle Assembly Machine right next to their filling machine,” Ciaran says. “That could cut out so much carbon. Plus you’re not storing glass and other materials used to make these bottles, you’ve got your pouch and your flat die-cut card pieces. A single pallet can hold around 5,000 bottles before assembly – you’re not getting 5,000 glass bottles on a pallet.
“When there’s so much uncertainty around tariffs, why would you want to ship these costly materials around the world when you can make it literally next door to your filling line?”
Flexibility and filling gaps
This kind of flexibility does not just apply to logistics – it applies to branding, too. Ciaran has identified this as the next major avenue for growth, with the premium and luxury segments a particular target.
“At the moment we’ve got customers using the Frugal Bottle in 27 different countries,” he says. “What we’ve found is the smaller, disruptive brands get on board first, and they use it as a platform to compete against the big guys. We are on the radars of a lot of bigger players, and approaching them is about timing and the possibilities of what you can do.
“Bigger brands might use bottles that have a distinctive shape, and your classic 750ml Bordeaux bottle shape might not reflect that. We’ve learned how to shape paper and can look at other designs in R&D projects.
“We’ve recently done some tests with foiling, and other decorative techniques like embossing. There are plenty of possibilities to make the bottle stand out for more premium products.”
The events market is another that Frugalpac are “knocking on the door of”, to quote Ciaran. The value proposition for a bespoke-branded, lightweight, recyclable wine bottle at a live music event, for example, is one that the company has already covered – and intends to explore further. “Our bottles were sold at a Coldplay event in the UK – that was very successful, because people were able to buy whole bottles and bring them outside to enjoy the show.”
The applications for this technology, then, are much broader than they might appear at first glance. Retailers are starting to reduce secondary cartons around spirits. Airlines demand lightweight single-serve options. Live events are looking to run more sustainably. Everywhere you look, there are gaps that technology like Frugal Bottle can fill.
“It hasn’t been plain sailing,” admits Ciaran. “But it’s come at a time where companies are looking for something new and different. If we boil it down, the reason we got into this is because of the high carbon footprint within the industry. The reason the bottle looks and feels like this is because we saw other alternative packaging fail.”
As they sell both the machines and the bottles, Frugalpac’s ‘open source’ approach to solving packaging challenges could become a model for the industry. It puts Frugalpac’s customers in control – ultimately removing barriers to adoption in the process.
Frugalpac has put its message in its bottle – and the wine and spirits industries have received it. It represents the kind of disruption that these industries need right now – and it’s just one example of the kind of innovations set to be on show at London Packaging Week.
Ciaran will be joined by Miles Beale of the Wine & Spirits Trade Association and Jason Galley, Director and Chief Executive of the Metal Packaging Manufacturers Association to share his insights and thoughts on the future of the drinks industry as part of a panel discussion titled ‘Policy on Top: What the latest packaging reforms mean for the drinks industry’. The panel – one of over 70 held over the two-day event - is just one of many reasons that the event should prove unmissable for premium drinks brands.
Join Frugalpac alongside thousands of brand owners, packaging experts, suppliers, and more at Excel London on 15 & 16 October. Click here to register for a free ticket today.