Why Brits Don't Drink Boxed Wine, When The French Do? #31

16:51Laura Riches:well there are two there are two kind of reasons why that preconception exists one remains which is wine doesn't age in a box so if you buy a bottle of fine wine you might lay it down i i don't but you might lay it down in your cellar yeah um and there might be an optimum time five ten years in the future when you open that wine that's not this but then that's also not how most people drink like most people 98 % of wine is bought and consumed within two weeks so you know

17:23Jamie Holtum:that's 98 % of wine is bought and consumed in two weeks yeah that's a good start yeah I mean it's

17:29Laura Riches:and I think you can see it in the way we live our life oh perhaps people are a lot more organized than me but you know I've got a couple of bottles that we've picked up over the years perhaps they've been gifts occasionally I'm organized enough to put in a you know well I don't anymore I run a wine company but you know one might have put in an order from a wine subscription or something but but actually most of the time you're rushing into insert whatever supermarket and grabbing so 98 %

17:57Jamie Holtum:of wine is drunk within two weeks or consumed within two weeks I guess you're what you're saying is but the whole bottle's not drunk right like that's that's what you're saying you may buy it but it will have a glass and it'll sit on your countertop with some sort of cork in makeshift

18:12Laura Riches:cork and then you'll pour it away.

18:14Jamie Holtum:Do you have an idea of then what the market then is for those people?

18:21Laura Riches:There's some outdated stats that talk about pouring wine away. I think what's more compelling to me is the number of people who said, when I was thinking about this concept, do you know what? I fancy a glass of wine. I'm a wine person. I fancy a glass of wine on Tuesday, say, but I can't justify it. So I'll have a GNT or, you know, so I'll have an RTD. Yeah, exactly. So, you know, choosing not to drink wine because there was an operational constraint, um, which can be easily unlocked with, with a change in format. Um, and then, you know, there's, there's also a kind of, I guess, heritage reason why, why people assume that boxed wine needs to be cheap long and that it's entirely legitimate which is that the um boxes themselves used to be lined with aluminium yeah and you know i guess the role that the the lining plays is to stop oxygen from getting to the wine that you know if you think of oxygen as being like the enemy of the wine um and in a completely sterile environment that aluminium lining would work perfectly but if you pick it up put it in your car boot perhaps that you know, gets knocked around, you might not be able to see them, but these tiny little hairline cracks would appear in the, in the aluminium.

19:36Laura Riches:And it meant that the wine would oxidize very quickly. And therefore winemakers were very reluctant to put their wine into box because they're like, well, wait a second, I've just spent a year picking the grapes, doing the harvest. I don't, I don't want to put it in and for it to taste like vinegar. So you have this kind of race to the bottom where the only wines in boxes were the cheap funk. Now the packaging technology, It feels very funny using the word technology. It's hardly high tech, but the packaging technology has improved significantly. So now you're in a situation where the lining itself is completely malleable.

20:09Laura Riches:So it protects the wine. And furthermore, the tap creates a vacuum. So that's what means that boxed wine is no longer at risk of oxidizing before you open it. And furthermore, when you do open it, you've got the six weeks. So it's kind of reversed, but there's this heritage.

20:24Jamie Holtum:So effectively, a lot of the population was almost trained to think that box wine was poor because it actually was poor. Right. And do you look at adjacent categories, RTDs, you talk about them. And not long ago, four or five years ago, it felt a bit of a compromise to pick up a Marks & Spencer G &T and drink that instead of having one at home or whatever. But the quality, you look at something like Moth and Rob, we've had a couple of times on the pod. It's a fantastic quality product in a canned format. And is that the inspiration that you take and say, well, yeah, that was a deeply entrenched behavior that alcohol in cans was no good unless it was a beer and therefore consumer perception has changed and therefore behavior has changed?

21:17Jamie Holtum:Is that the kind of model that you think, yep, that's what we're doing here? Yeah.

21:21Laura Riches:So I think you use a really good example with the RTDs and cocktails in particular. Rob knows I'm a big moth fan. That is certainly helpful, particularly helpful in the trade, actually, where venues have tried out having canned cocktails because there's a really compelling operational reason. If you think how long it takes to mix a cocktail and you're in a fast serve environment, it makes total sense. And so there's been this rapid adoption. And now the idea that you can put a quality wine in a can is is now sort of seeded and that it makes way for wine i think there's also within our category although um adoption of things is is slower it's not that long ago that screw tops were considered you know you know unthinkable and if you think now i'm actually relieved if it's a screw top i don't have to dig out a corkscrew.

22:16Laura Riches:So I think there is this movement in the category also. It's slow moving. Like I said, it's a traditional category, but people will adopt new things. Yeah.

22:27Jamie Holtum:I think it's a really interesting, obviously, I think from a strategic point of view, but the framing of it is very, very interesting. When you look at adjacent examples and you're going off, we all talked about jobs to be done and innovation jobs to be done and what are you solving, et cetera, you'll know the lingo very well. But this is a real functional job to solve, isn't it? And you're removing barriers to allow people to do it. I guess just from an emotional point of view, how are you then layering that on top? How do you make, you know, we talked about making people feel unique about choosing their mind, making people feel good.

23:02Jamie Holtum:How are you giving them that feeling of feeling good about picking Yeah.

23:06Laura Riches:So I love telling stories like, you know, it's, it's important that I can tell the story about the format and I can tell the story about, you know, internationally X, Y, Z, when selling to buyers or talking to investors, but actual customer stories are slightly different. And, and I think that's where wine has a real untapped opportunity. So at Naked Wines, One of the brilliant things about that job was I got to meet loads of winemakers, got to travel some quite nice places. And it struck me that, you know, people talk about the romance of a bottle of wine. But in most instances, the label is following a set of conventions from that region, whether that's Burgundy, Bordeaux or the New World.

23:55Laura Riches:And you sort of have a bit of blindness to it. You know, you might recognize it or give some signals, but it doesn't really tell a story. And, you know, if you see labels from across, let's say, like Burgundy with a swirly writing, you don't know anything about producer A or producer B or what makes their wine special.

24:15Jamie Holtum:Yeah.

24:15Laura Riches:So what we've tried to do with Lalo is to say, well, you know, we've got this extra space on a box. You've got five visible faces and on a can, you've got still probably like twice as much, possibly more space than you do on a wine label. So let's use design to try to articulate some more interesting and special things about these wines. So our Sauvignon Blanc, which is white with the kind of blue twirl pattern, that's a little snippet of wallpaper from the winemaker's home. It's not inspired by, it's an actual piece of wallpaper from his home. with the rosé, the mother and daughter, Anne-Marie and Camille, they make the wine.

25:00Laura Riches:But the dad is a painter. He loves to paint. So we asked him to send a photograph of his favourite scene from the Louberon region where they live. And we have created something that looks like a discarded paint palette. So I guess design is a really important part of our brand and our story.

25:19Jamie Holtum:Are you trying to create intricacy and depth onto a format which traditionally doesn't often have that? Is that the design ambition?

25:31Laura Riches:I would say we're trying to create theatre through the format. We're trying to say, this isn't apologising for not being a bottle. This is a can, this is a box, and it feels great and it looks great. And it says something that that bottle over there doesn't say. And for that to be, again, to be spoken about, you know, removing friction and, you know, not compromising. I think, and our customers think, the design on our boxes and cans is better than the design that they get on their, you know, average bottle of Shabley. And yeah, it's not apologising for what it's not. It's proudly what it is.

26:14Jamie Holtum:Definitely. And how do you manage the on-trade conversation? So I guess from Naked, you probably have some very good, I guess, relationships with people across wine. Is that, I guess, entrenchment of the negativity against box wine? Does that come up a lot across the trade or is that changing? I guess you've got two big jobs, don't you, from a consumer and a customer point of view on that?

26:43Laura Riches:So I think one of the big turning points at Lalo was we'd always been D to C and the boxes have been the hero. And we started to get asked by restaurants and bars who wanted to offer more wines by the glass. You know, could we take your boxes? And this kind of led quite organically into, okay, the entree, that sounds interesting. Um, honestly, I didn't know anything about the entree. Um, I was completely naive as to, you know, the role of wholesalers, how the buying tender processes worked. You know, I really was making up as I went along. Um, but what we found was we, we were the only people doing what we were doing with box.

27:29Laura Riches:So we would go into the tender processes and people would love the concept and they would love, you know, the liquid and we'd actually get quite far through sales processes. And then at the very last minute, someone would have a little wobbly about boxes. And it might be, what they would say would be something like, it doesn't quite fit in our fridge. It doesn't quite fit on our trolley. But what they were really saying was there's something, there's something about this and this was challenging because really through those processes we had to sell two things we had to sell the concept of boxed wine um but we also had to sell our brand lalo and our wine um so through a kind of series of conversations um lots of people would say to us that we love what lalo is doing but we're really looking for cans And there was a point in 2024 where I honestly, I was like, enough, enough is enough.

28:28Laura Riches:Let's see what we can do. And I rung up one customer who'd said this to us and said, look, if I get these made, will you be our first customer? I don't want to have an egg on my face if I've said like, we absolutely need to do this. And then no one buys it. So we had a customer. And, you know, what's been really interesting is I think people assume that having no competitors is a great thing, that having, you know, wide open space is an advantage as a startup. I would say the opposite. You know, actually, many of the accounts that we've won have been accounts that are totally sold on the concept of canned wine.

29:06Laura Riches:they perhaps had an entry-level brand in there before but they're looking now for how can we do this in a way that is more aligned with us as a brand that's perhaps more premium or more design led so actually i can go into a sales conversation or someone in our team can and it's it's not about the format and that's really refreshing now obviously there are more accounts more venues that you still have glass bottles and you still have to do that dual job but it is quite exciting when you can just go in and sell your brand.

29:36Jamie Holtum:What's sort of the sales split between cans and box?

29:40Laura Riches:I mean, 90 % of what we do in the entrade is cans.

29:43Jamie Holtum:Is it? Yeah, yeah.

29:44Laura Riches:And having, you know, we'd been sort of working for years on having boxes in the entrade and having these great conversations and these warm leads. And it really was the unlock was introducing the cans to the range.

29:59Jamie Holtum:That's a huge kind of flex or twist, isn't it? to the story because it was a box wine business it still is a box wine business but 90 percent

30:10Laura Riches:of the volume goes through cans 90 about on trade volume so direct to consumer the box is still the

30:16Jamie Holtum:hero okay got it got it so total business what would you say what's the split oh gosh no so i

30:22Laura Riches:mean the the on trade is is a now much larger part of our business so i guess the split is probably like 70 % can, 30 % boxes.

30:32Jamie Holtum:And that's all predominantly through DTC.

30:35Laura Riches:Yeah. Yeah. And what's important about this, I think, is it is a deviation from the original idea, which was wine and boxes, DTC. But I'd say in other ways, it's a natural evolution, which is the job to be done. And the pain point was being able to have the odd glass. And for that to be in a format that makes that really easy for every glass to be fresh. So actually the formats might be different, but the very essence of what Lalo is, great wines, 12 pounds per bottle equivalent, something that looks great, you can feel proud of, that tells a story. It's the same. It's just tailored to the specific occasion.

31:22Jamie Holtum:What's the kind of learning there? Because you said being fed up and being asked to produce a CAN format. And I guess maybe that is the learning, is to say, well, make sure there's demand there before you make a big shift or anything like that. But did it take quite a lot of conviction and courage to change that and to move the mission slightly towards CAN?

31:46Laura Riches:i think that the the learning is to is to like follow the demand now i'd say there's a big caveat there which is you we get asked new things all the time you have to have you have to filter out you know every customer email i think you should do a pinot noir i think you should do an aged merceau i think you know whatever i think it was when you sort of have to start pattern matching which is like is this a demand is this a genuine demand is this something that is going to move the dial for the business or is this you're not quite right for us so i'm going to hurl a suggestion but i think you know actually asking someone to put them money where their mouth was and to say

32:33Jamie Holtum:like if i make this will you buy it was the validation that we needed i think you know it's

32:39Laura Riches:also really easy with hindsight to say I should have done it sooner. And I wish I'd wish we'd done it sooner, but you know, you only know what you know in that moment and you have to, you know, there are many more things that we've said no to and that's been the right call. So, yeah.

32:55Jamie Holtum:Just a question and we kind of dovetailed it earlier, the conversation about building brands in wine is seemingly pretty difficult to do because a lot, you know, a lot of the variation and the detail and the provenance story. Whispering Angel did manage to do that. And as we mentioned before, the call got bought by LBMH. I don't know this category particularly well, but that looks like, when you look across the category, that looks like a bit of an outlier, you know, in terms of how they built that brand quickly with pace, how they created a name, which was easy at a bar and easy to talk about, how they tapped into a category which was flying at the time.

33:42Jamie Holtum:I actually read an article last week that people are buying chilled reds over rose these days. But looking adjacent to Whispering Angel, what do you see in that story? You think, yeah, okay, they got some really big things right that we can maybe try and replicate.

33:56Laura Riches:Yeah. So I think that you're totally right. The idea of brand in wine is quite a new thing you know prior to whispering angel there were a few a few brands um but they tended to sit right at the bottom of the market so i mean interestingly the biggest wine brand in the entire world is franzia yeah um which is a boxed wine brand um number one on volume and value so i think what they tapped into was using some of the kind of tactics strategies outside of wine to create something that is memorable and i think for me that's having as you said a name people remember his genius name is such what's even me no one knows but it sounds cool and you can say it you don't have to like you know ask someone how it's pronounced having some sort of visual cue yeah which for them was this pale rosé that's what everyone drinks now but it wasn't at the time you know people were drinking this sort of electric pink sort of zinfandel and so having something really unique and memorable and then you know from what i understand the way sasha built it you know real sort of founder led before founder led was a buzzword you know out there you know in the entree selling the story and selling the treatment and and so i think that that proved in wine that it it could be done and i guess you've got this visionary founder who who made that possible um i would argue now with wine the idea of brand is now becoming a bit more accepted um i'm going to use the example of the chicken wine no i mean no one could say the name so they've now la vielle femme has become the chicken wine um there's quite a lot of data around uh wine labels with animals because people can say the chicken wine or the porcupine wine or whatever they want to say um and i think now the the industry is kind of waking up to the fact that oh you can you can create a this thing called a brand like and and people will remember what that is and they'll be sticky to it rather than you know there's this domain this vineyard or whatever kind of yeah yeah exactly and and you know for us we wanted to when we were naming Lalo we wanted it to be something that felt like a startup brand that felt cool it felt innovative that wasn't Vinda whatever or like you know had like tied yeah exactly tied to a particular yeah product format

36:33Jamie Holtum:yeah wine it's interesting isn't it because you know we work across total beverages a lot and liquid pack format, you know, activation, every touch point is scrutinised and debated. And how do we tweak and improve and iterate to get an advantage, meet that job to be done better constantly? And it feels like wine is sort of just waking up to the fact that it has different levers to pull than Providence and Liquid and a bit of legacy. So yeah, it's really interesting. Great energy, really, that could potentially come from wine in this kind of next few phases, which gets us on to kind of thinking a little bit about the future with moderation being a big thing.

37:16Jamie Holtum:Although, as we talked about earlier with Stephen Bartlett's comment on a podcast about drinking wine, there's backlash around the self-optimisation. So who knows what that will mean. But with the idea of control and moderation, which is certainly here, do you get those sort of questions from investors, from customers questioning that and saying, hang on, have you seen the amount of consumers drinking less or moving away or switching to non-alc?

37:47Laura Riches:one thing the wine industry could do better is to debunk the the sort of headline data is incredibly sexy to imply that people aren't drinking wine anymore you know it's it's you know sensational easy headline yeah thousands of wine thousands of years of drinking wine and suddenly in this in this last five years we've all changed our mind and you know a lot of data is cherry picked on this front. It remains that the wine industry dwarfs low and no, that a lot of growth in low alcohol wines is being cannibalized by 0%, that there's this sort of like, you know, like I guess exchange of market share.

38:35Jamie Holtum:Have you ever tasted a nice non-alcoholic wine?

38:37Laura Riches:I think what the guys are doing at Wednesdays to Men is brilliant okay for me i love wine yeah and it's um i think that the fermentation process is what wine is like that the creation of alcohol is what wine is so while i love their brand and if i had to if i had to drink a non-alc it would be wednesdays to men i i just don't think that

39:05Jamie Holtum:you get that same that same experience in mouthful yeah sorry no but i you know i think i think we

39:11Laura Riches:don't like it's i'll tell you what it is when when you see these headlines that are you know perhaps cherry-picked data about you know how no one's going to be drinking gen z aren't drinking which i've got views on it's almost like it feels a bit taboo to challenge it it feels a bit like puns like pardon the pun but like a bit sour grapes to say oh is that poop yeah so you know yeah from your perspective yeah yeah so i mean i've seen you know lots of lots of data that kind of counters that and and you know it's i think it's now becoming a little bit more accepted to say oh hey wait one second you know using gen z as the example well you know people were saying gen z aren't drinking as much as previous generations well that that was true to an extent.

39:57Laura Riches:I mean, Gen Z are very young in terms of like drinking age, the starters. They had formative years during COVID when no one was going out socializing and drinking and have, you know, saddled with loads of student debt in a cost of living crisis. So, you know, has adoption of wine been slower than previous generations? Yes. But actually the data is showing that, you know, as you know, fingers crossed, things are starting to kind of ease off and there's a bit more optimism, they're adopting wine at the same pace. So I think, you know, am I, am I asked about it a lot? Yes. Am I worried about it? I think, I think it's about creating a, a product that is relevant to the world we live in now that allows people to moderate their drinking, that looks cool.

40:42Laura Riches:That is a brand. You know, the fact is that Boxing Canned Wines are growing at a 24 % caga and that doesn't seem to be slowing down if anything is accelerating.

40:51Jamie Holtum:I think we speak to a lot of people, founders, but also a lot of people within the industry. And I think it's the people who understand the nuance or the brands that understand the nuance that are going to win. You hear evangelical founders go on and on about how people have stopped drinking. Alcohol's dead. I mean, it's just total rubbish. And you get brilliant founders like M.A. Ermgassan of Petiva, who just gets it. It just gets, we're creating great drinks and sometimes I drink and sometimes we don't and that's okay. And the control and moderation is a thing, but it's just that exactly to your point is understanding the bigger picture, understanding that Gen Z have had a ridiculously impactful time with COVID and cost of living.

41:42Jamie Holtum:And things are a little bit different and things are slower. But as you say, if boxed wine is growing at 24 % Kaga and there are lots of pockets of growth across alcohol, yeah, consumption has changed. But it's brands that can understand how and why and when that are going to win versus a black and white take and saying, well, the world is going to go no low or whatever. Yeah. So it's a really smart take. And the data, we've got reams of data on it. the data that we see every day just demonstrates a totally different picture to what, you know, the Daily Mail or the Times say every day. So yeah, you're spot on.

42:20Laura Riches:I think it's like all things, you know, data and advice, you know, the skill isn't to be blinkered, like that doesn't help anyone, but it's actually to be able to kind of filter, not cherry pick but filter what's relevant here what's what's the actual message what what do i need to incorporate into the way that i communicate or the brand that i create and what's just noise and i i think there is a lot of noise around alcohol um and we perhaps as an industry don't do a great job of presenting the counterfactual yeah and last question because we're out of time

42:59Jamie Holtum:what is the ambition for Layla? Where do you want to take it? Where do you see it going? What would kind of, you look back in five, 10 years and you see a headline about Layla, what would it say?

43:15Laura Riches:Well, we've spoken about Whispering Angel. I would love to do for all format what Whispering Angel did for Rosé. And by that, I mean, create a brand that is memorable, that people associate with quality. And if they don't buy it themselves, they're looking for something as similar, to be considered the premium aspirational brand in our category and a category that we have created. And I think what Sasha did at Whispering Angel, he created that category. He made rosé, pale Provence rosé in a very heavy bottle, which is very bad for the environment. And I would like to be, you know, Lalo, we prove that drinking in all formats is not just, you know, a sustainable swap, it's an aspirational swap.

44:08Jamie Holtum:Aspirational, easier, more convenient, all of it. And yeah, I think that's very powerful. I think the concept of category kings or category queens is spot on there, isn't it? Is create your own category and become the head of it or become the driver of it. And yeah, it feels like Lalo is certainly doing that. So Laura, thank you so much for coming on. It's been really good to have you. We started with Aidan Turner with his chest out. We won't finish with him. But yeah, thank you so much for your time.

44:33Laura Riches:Pleasure.

44:34Jamie Holtum:Cheers.