Sage words and a good assessment of the current situation except, as Tyson Stelzer quotes in his book “Screwed for Good”, those words were published over 20 years ago in 1980. Back then there was an expectation of significant bottlings in screwcap and it becoming a significant alternate seal to cork in the Australian marketplace.

Crash and Burn

Despite this initial enthusiasm by the mid-80’s the screwcap had faded from use; well, ‘crashed and burned’ is probably a more adequate description. Pewsey Vale took a pasting and the move damaged the brand significantly and others had a similar results in poor sales.

So what happened back then? Peter Bourne wrapped it up in an article in 2000:

Screwcap fell well out of favour as a seal until the current resurgence in 1998/1999.

Mixed Feelings

Moving forward to 2003/4 we have an increasing number of brands appearing in screwcap, with significant bottlings in aromatic white wines; Riesling in Australia and Sauvignon Blanc in New Zealand, and now the market here is now seeing the emergence of reds in screwcaps. The European and American markets are a year or two behind our markets and are only seeing small amounts of wine in screwcaps at present.

We appear to be at a crossroads, will we see a continuing growth in acceptance of screwcaps, or will it crash and burn once again?

The industry appears to have more reservations now than it appeared in Peter Bourne’s summary above. While there are makers who have thrown their weight behind screwcaps, such as Jeffrey Grosset; Keith Mugford of Moss Wood, and Michael Brajkovich of Kumeu River, others have varying degrees of reticence in embracing screwcaps.

Bass Phillip’s Phillip Jones has appeared in full page ads endorsing cork, John Middleton of Mount Mary as similarly come out in favour of cork for his wines. Other makers have taken to partial endorsement for the screwcap. Most commonly this is in seeing white wine in screwcap, with a ‘wait and see’ approach for reds. This is the case for industry giants such as Southcorp and BRL Hardy, and also for smaller concerns such as Tahbilk and Dalwhinnie.

Screwcaps also have their critics as well. Some of this is marketing related; “there’s no romance with screwcap” or “they look cheap”, other factors are to do with the nature of the closure; “wines won’t age under screwcap” and concern of reductive characters due to the airtight seal. A further comment thrown in is “If screwcaps are so good, why did they fail so spectacularly in the 80’s?”

Why indeed?

It appears to me that if we can’t explain that last question, then screwcaps will fail once more.

Is Screwcap the Beta videotape of the wine world?

The tastings of the older wines sealed in screwcap have shown that it’s not a technological problem that’s stopping the widespread acceptance of screwcaps. So what is it?

Brian Marks and Wayne Mortensen from the Melbourne's Victoria University School of Management looked at the issue from a technology innovation viewpoint, as opposed to the traditional TCA taint/ oxidation/ reduction/ aging concoction that the wine industry has concentrated on thus far.

This approach has merit, after all history is littered with innovations that haven’t been embraced by the mainstream market.

The “qwerty” keyboard I’m typing this on is a woefully bad design. The “Dvorak” layout is far more efficient and user friendly, but the qwerty design is still keeping most of us in ‘hunt and peck’ mode. Beta Video tape was superior to VHS, however owners of Beta Video players were consigned to the “Beta Losers” Section of the video store until they gave up and bought VHS, and most of us are using Windows rather than Macs in the home aren’t we?

In their paper “The failure of a wine closure innovation: A Strategic Marketing Analysis” Mortensen and Marks identified several factors for the original failure of the screwcap to gain customer acceptance and the lessons that can be learnt this time around.

These factors included “The failure to effectively demonstrate the relative advantage of the screwcap seal to consumers and to address the complexity and incompatibility of the seal with established user traditions”. Note the latter point is not about the complexity of the technology, after all, it’s just a simple twist, moreover it is that the technical benefits of the screwcap, in addressing taint, oxidation and bottle variation, is relatively complex and hard to convey. If customers aren’t really aware of TCA Taint as a problem, it can be a tough sell convincing them of the benefits of a Taint-free alternative.

To paraphrase their summary of the failure; the promoters and early adopters of Screwcap seal were not effective as opinion leaders, or as role models to take the innovation to the point of it becoming a mainstream alternative to cork.

As such, back then the screwcap crashed, and crashed hard. So much so that for almost 20 years, wine in screwcap was shunned.

So what’s Different Now?

The situation appears to be different now, there is an acceptance, or perhaps an indifference, in relation to screwcap in the Australian and New Zealand markets, at least with White Wine. This has very little with the mechanics of the screwcap, after all the screwcaps on wine now is no significantly different than in the 70’s and 80’s. So what is it?

So Are Screwcaps Down the Chasm?

Here's where another bit of management thinking comes into play. Business Consultant Geoffrey Moore found that any new innovation conforms to a 'Technology Adoption Lifecycle', with customers separated to five key categories, along which the cycle of adoption proceeds. These are

1. Innovators - Enthusiasts who are by nature take up the new technology on the grounds that sooner or later it will improve their lives.
2. Early Adopters - Visionaries and Entrepreneurs who want to use the innovation to make a break with the past. (Groups 1 and 2 form the ‘early market’)
3. Early Majority - Pragmatists who buy only when there is a proven track record of useful productivity improvement.
4. Late Majority - Conservatives who are very price sensitive and pessimistic about the added value of the product; they buy only when technology has been commoditized.
5. Laggards - Skeptics who are very difficult to capture.

Note that in the case here of screwcaps we’re talking two different “Customers”; the Wineries or Winemakers who may use screwcaps, and the End Customer who buys the bottled wine.

The tricky bit here is that between the Early Market (Innovators and Early Adopters) and the Early Majority there is a Chasm, into which the innovation may fall. This is best illustrated in the diagram:

The Screwcap fell into this Chasm in the 1980’s. The early users of screwcaps, the innovators and early adopters, could not convince the pragmatists of the early majority, either winemakers or customers that screwcap was worth using. Critical volume was not reached and the Chasm had another victim.

Bridging the Chasm

Moving to the current day, as I said in the introduction we are seeing a growing number of wines in screwcap, is it enough to cross the Chasm and be bought by the Pragmatists and Conservatives in the industry and in the general public?

Moore says the way to cross the Chasm is to “establish a beachhead or niche foothold where there is a compelling business need for the innovation” Mortensen and Marks notes this has been established amongst premium Riesling makers in Australia. To this I’d add the makers of aromatic white wines from New Zealand.

This started with Innovators like Richmond Grove and limited bottlings by Pewsey Vale, Henschke and a few others. This provided to the impetus to the early adopters with Grosset and the Clare Valley makers, the New Zealand collective and a smattering of others here and abroad.

The “Beachhead” here was in addressing TCA Taint, which is particularly noticeable when present in unoaked aromatic whites, and also in providing a consistent seal to allow development in the cellar. The Beachhead was reinforced by the tasting of the older wines in screwcaps by wine lovers, finding that the seals had performed far better than expected.

This was combined with a marketing strategy, funded by the wineries, explaining why the change to the screwcap closure had been made. Another other key factor here is that the initial bottlings have been with premium brands, which help avoid the stigma of screwcaps being associated with cheap wine, which was a factor in it’s previous failure.

Another key element is that the world wine market, and in particular with wine media, is far more accessible today then in the 1970’s and 1980’s. This has provided increased visibility of the factors underlying wineries switching to screwcap to the mass market. The World Wide Web has also played a role, with the online community firstly communicating the results of the tasting of older Rieslings in screwcap, and then participating in the active discussions as wine in screwcaps begins to appear in other markets.

Mark and Mortensen conclude in their paper that beachhead has been made and the chasm has been crossed. Screwcaps are now part of the Mainstream Market for aromatic whites in Australia and New Zealand. In my view this has been reinforced in the year since this paper was published. Jeffrey Grosset noted in a recent lecture that 200,000 Australian wine bottles were sealed with a screwcap during 2001 but, during 2004, that figure is expected to have risen to 200 million bottles. The reports of introduction of these wines in screwcap into the European and conservative American market shows similarly that the entry into the mainstream market is only a matter of time.

Crossing the Red Chasm

While the whites are off and rolling, the situation for red wines is moving along the lifecycle to a different timeframe. It also appears that some of the early adopters of screwcaps on white wine are pragmatists or conservative when it comes to red wine. Is the Chasm any bigger for red wine than for white?

In my view probably not. The timing is different, however we are already seeing early adopters making significant investments in with screwcaps on red wine, and an increasing body of evidence in relation to addressing the makers and the customer’s concerns about how red wine develops under cork. I expect it will take a year or two yet to gain a ‘beachhead’ equivalent to what we now have with the whites, but on the basis of the impetus to date, the outlook is positive.

It’s interesting that makers also move between the various categories of using the technology. Jeffrey Grosset told me in November 2000 that he had no foreseeable plans for using anything other than cork for his flagship Gaia red, however 30% of 2000 Gaia was bottled in screwcap in 2002 with the majority of the wine using screwcap for the 2001 vintage.

Conclusions

The work by Wayne Mortensen and Brian Marks in applying management theories to the current development in screwcap use provide an interesting alternate insight into where the industry and the market is at present.

The model appears to work well, from Innovators and Early Adopters such as Richmond Grove, Grosset and Kumeu River, to the Early Majority such as Southcorp, and Tesco supermarkets in the UK and also blending of Early/Late Majority such as Tahbilk, and on to the skeptics such as Mount Mary and Bass Phillip. These makers may not see themselves as segment on a chart, particularly in relation to screwcaps, however the model appears to have a pretty good fit.

This also applies to the consumer as well. I see myself as an Early Adopter for screwcaps, which started when I first tasted some of the older Rieslings in screwcaps. A number of my vinous colleagues, both in the local community and in the broader online world, have varying degrees of enthusiasm for screwcaps. Some are pragmatist who will wait for a proven track record, others are getting on board early, as the demand for Moss Wood, Grosset and Cullens reds under screwcap have shown. Others are pessimistic and some will always require their bottle of wine to have a cork in it.

Does all this indicate that the screwcap will replace the cork as a seal for wine? Of course not. There will remain a sizeable, perhaps a majority, population of Conservatives and Skeptics (using Moore’s terms) who will continue to use and endorse cork. The cork industry will also continue with it’s own innovation path and also market the cork option to the world.

My view is that the Screwcap is now a mainstream alternative closure for wine. The Screwcap is not the Beta Videotape of the wine world. The wineries using screwcaps learned the lessons of the past and use an innovation strategy that has seen growth well beyond original projections by focussing on the core benefits of the screwcap in addressing TCA Taint and oxidation and bottle variation. The Chasm has been crossed, the future awaits.

© Murray Almond
12 December 2003

• Screwed for Good? - the case for screwcaps on red wines.: by Tyson Stelzer www.cellaringwine.com.
• The failure of a wine closure innovation: A Strategic Marketing Analysis by Brian Marks and Wayne Mortensen: http://www.business.vu.edu.au/MgtContent/Working Paper.pdfs/working paper2-2003-Wayne & Brian.pdf
• An Innovation in the Wine Closure Industry: Screwcaps Threaten the Dominance of Cork by Brian Marks and Wayne Mortensen http://www.business.vu.edu.au/mgtcontent/Working Paper.pdfs/Wayne Mortensen&Brian Marks 18-2002final.pdf
• Crossing the Chasm by Geoffrey A. Moore published by Harper Business
• The Dvorak keyboard - A Brief Primer: http://www.dvorak-keyboard.com