By Mike Veseth, University of Puget Sound. Originally posted on The Wine Economist.

One of my favorite globalization books is The Box: How the Shipping Container Made the World Smaller and the World Economy Biggerby Marc Levinson. It is the story of how the invention of the standardshipping container (those 20-foot steel boxes you see on ships, railcars and truck beds) made international trade much cheaper, moreefficient and more secure. Now it looks like another kind of box isabout to shake up the wine world.

Cheap and Nasty

I’m talking about box wines or bag-in-box (theAustralians call them cask wines) that feature an airtight wine-filledplastic bladder inside a cardboard box. You use a built-in spigot toget to the wine. They can be found on the bottom shelf of the wine walland behind the bar and out of sight at your local restaurant. They comein several sizes — 3 liter and 5 liter containers are the most common.

Box wines have a bad reputation. They first appeared in the 1970sand were filled with generic bulk wines.  They were one step down fromthe popular 1.5 liter “magnum” bottles of  “Burgundy,” “Chabils” andthe notorious “Rhine” wine. Box wine was cheap, nasty stuff thatacquired a frequently deserved bad reputation.

[Re]-Thinking Inside the Box

It’s time to reconsider box wine. Screw caps had a bad reputation,too, until quite recently. We associated them with low grade swilluntil fine wines appeared under screw cap (the New Zealand producerswere in the vanguard) and we began to appreciate that that screw capshave many advantages. Now screw caps are actually associated with qualityfor some types of wine, especially youthful whites, and no one expectsto pay less or get less because of the screw-top closure.

The technology of box wine is very solid. The airtight bladder is aneutral container that is well suited to holding wine for relativelyshort periods of time. (Don’t cellar box wine — consume within a yearof production — check out the “drink by” date on the box.) The bladderand spigot do in fact protect the wine from oxygen in the short run, soit will last longer once opened (especially if the box is stored in thefridge) than similar leftover wine in bottles.

Bladdersare so good at the particular thing that they do that they have becomean industry standard technology for bulk  imported wines, which areshipped in huge bladders inside steel shipping containers (big bag in big box) and then bottled in the import market. So you may already be drinking box wine and not know it.

The Box Also Rises

The most recent Nielsen retail wine sales figures (reported in the October 2009 issues of Wine Business Monthly)suggest that box wine sales are growing. Wine sold in 3, 4 and 5 litercontainers (most of it is box wine, I think) accounts for just under 10percent of US supermarket wine sales, according to the Nielsen data(compared to 65% for standard bottles with the remainder in 1.5 literand other formats). Sales are rising in this category, with 3 literpackages up 8.7% in the last year on a dollar basis, for example, and 5liter packages are up 9.3% by value.

The total market for box wines rises if we include on-premisessales. Recent data (see previous posts) indicate that box wines (servedto customers in carafes and by the glass) are strong sellers in casualdining establishments.

The rise of box wine is part of the trading down effect, clearly,since most box wines fall into the two price categories that areexperiencing the highest growth. Sales of wines that are less than $3per 750ml bottle equivalent have risen 7.1 percent according to Nielsenand by 10% for wines between $3 and  $5.99. Supermarket sales of $20+wines, on the other hand, have fallen by 3.4%.

Nasty, Brutish and Short?

Does this mean that Americans have traded down all the way to thebottom, back to the nasty box wines of the 1970s? The answer,incredibly, is no. Or at least not necessarily, according to theOctober 15 issue of Wine Spectator.  You can’t miss this issueon the newsstand — it features a cover story on “500 Values for $20 orLess” and includes a set of box wine reviews that make interestingreading.

Wine Spectator purchased 39 box wines in packages thatranged from 1 liter to 5 liters. Twenty seven wines were rated as“good” (a score of 80-84) and ten “very good” (85-89). The names of the2 wines that scored below 80 were not reported.

The top box wine, going by the rating numbers, is a white: Wine CubeCalifornia Chardonnay, which sells in Target Stores for $17 per 3 literbox, which is $4.25 per standard bottle equivalent. It earned a veryrespectable 88 points. Wine Cube is a partnership between Target and Trinchero, the maker of a wide range of wines including Sutter Home.

The best red wine (at 87 points) is the Black Box Cabernet SauvignonPaso Robles 2006, which costs $20 for 3 liters or $5 per standardbottle equivalent. Black Box is a widely distributed ConstellationBrands product.

Good and Cheap?

Some box wine, apparently, is both pretty good and pretty cheap. Perhaps just to show that they really do rate wines blind, Wine Spectator gavea pretty good 84-point score to a non-vintage Carlo Rossi CabernetSauvignon California “Reserve” wine. Five liters for $13, in case youare interested,  That’s $1.97 per standard bottle equivalent.

How can decent wine be this cheap? One answer, of course, is thatyou can choose to make the wine itself less expensive by economizing inthe cellar in many ways (less oak or none at all for red wines, forexample). But to a considerable degree the box itself is responsiblefor the savings.

The bag in box container costs less than $1, according to the Wine Spectator article,which automatically saves $4 to $8 compared with a similar quantity ofwine in standard glass bottles and the box they come in. Shipping costsare also less since the boxes weigh much less than glass bottles forthe same quantity of wine and are less likely to be damaged intransit.  There are environmental benefits too, especially in areaswhere glass bottle recycling is problematic because the sour economyhas undermined the market for recycled glass.

Is box wine the future of wine? No. The wine market is too complexto be dominated by any single trend. But with better wine in betterboxes (and with consumers embracing a more relaxed idea of wine) boxwine deserves to play a bigger role in the future of wine. Anothertriumph for The Box!