NEW STANDARDIZED GLOBAL BOTTLE SIZE: 700ML BOTTLES ARE ALLOWED FOR SPIRITS TO SELL IN THE USA.
Just a few weeks ago, the TTB announced several changes for the permitted bottle sizes allowed in the United States. Most notably was the inclusion of the 700ml bottle. And no, for everyone reading this in the US, that isn’t a typo. In addition to the current US standard 750ml bottle, the 700ml format is now also an acceptable retail size. While 750ml bottles are the standard for wine bottles across the world, outside of the United States the majority of distilled spirits are sold in the 700ml format. This change aligns the US with all other major distilling countries and will impact a producer’s go-to-market strategy and long-term planning. There are a few key changes that we see coming from this addition, both for US and international distillers.
Easier path to international growth
There are only two notable countries, the United States and India, which have historically used 750ml as their standard. Within European countries and most countries around the world, the 700ml is the standard bottle size for distilled spirits. What this historically meant for brands looking to expand beyond the US was setting up a second bottling and packaging line, or, needing to calibrate back and forth between the 750ml and 700ml format. With this new change, domestic brands will be able to start with a 700ml size here on their home turf and move that much quicker into the international market. Of course, the opposite is also true for international brands as well, who won’t have to adjust to the unique US format. Ultimately competition around the world will continue to increase, putting additional importance on packaging and bottle design.
Retail cost will likely stay the same
While it may not be a popular value proposition for consumers as this transition is made, the trends of other CPG categories show us that this new, slightly smaller format will look to hit the same retail price points as the current 750ml format. We actually see this as a gift to our industry here in the US. The added margin means existing producers will have an opportunity for an immediate profit bump after a challenging year of COVID. Also, this margin lift could be applied to strengthen a brand’s appeal with additional spend on bottle design, decoration, packaging, and marketing. With competition intensifying, having these increased resources to create a unique brand statement will prove pivotal for success in this decade.
Nimble and new have a distinct advantage
Since retail and wholesale pricing is likely to stay consistent, there will be financial pressure to move to a 700ml format for increased margins. For well established brands, the transition may take some time to convert production and distribution systems to a size switch. However, new brands launching in 2021 will be able to capitalize on this change immediately and have the advantage of being in a consistent size and format from Day One. There will also be a brief period of time where having a 700ml bottle will be something novel and unique within the US. At ByQuest, we have 700ml options ready within the Wildly Crafted line and virtually all of our bottles from Europe and Mexico can be available in the 700ml size. Here’s a side by side visual of our 700ml and 750ml Wildly Crafted® Primal bottle; visually, the difference is hardly noticeable.
What are your thoughts on this upcoming change to the US market? Will you be looking to make a shift to the 700ml format? Let us know, keep the dialogue going, and as always keep unpacking.
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