Capsules in transition: will elevated cost drum tin out of the competition?

Although he does sell polylam capsules in the U.S., Bell of Rivercap USA noted historical problems with applying polylam capsules on the bottling line. Janson, however, cited developing technology that has rendered them "Similar in appearance and touch to tin capsules. (They) adapt easily on the bottling lines with no major adjustment. Because of printing sophistication, and raw material improvement, polylam capsules provide high quality finishes, and spin nicely on the bottles."

Stephen Forrest is managing director of EsvinWine Resources, Ltd., in Auckland, New Zealand. Esvin sells polylam and PVC capsules, as well as about 5% tin capsules, sourcing the tin product from Europe. PVC costs have risen a mere 10% in recent years, he noted. He remarked that in screwcap-happy New Zealand, "There has been a considerable decline in both PVC and tin capsule sales."

Frederic Catteau, general manager of Alcan Packaging Capsules of California in Napa, which provides both tin and polylam capsules, and is probably best known as the supplier of the (aluminum) Stelvin screwcap, said, "The currency (exchange between) euro/dollar had much more impact than the raw material price itself--example: aluminum."

Will tin remain in?

Catteau said, "There's clearly a switch to some other alternatives, such as polylam and Stelvin screwcaps.... If we look at some other countries such as Australia, New Zealand, South America, even in Europe, we see a switch." He estimated there were some 2 billion bottles of wine under screwcap in 2007: 65% of Australian wine, 90% of New Zealand wine. "South America is booming," he said, and the U.S. market for screwcaps grew 24% in 2007, 2.3 times more than the wine market itself.

Forrest of EsvinWine noted, "The most significant change we have seen is that smaller wineries now tend to purchase plain capsules, instead of decorated." He credits that to the high cost of producing small runs, which can be three times that for plain, undecorated capsules.

"It's difficult to say where the tin market will end up, given the cost of tin capsules compared to the alternatives. While I would not want to predict a swing back to tin any time soon, environmental considerations may ultimately have more of an influence on market direction."

Janson mentioned that in recent months, "We have been contacted by various customers in order to transfer their tin capsules to polylam, due to the rising cost.... This is a more and more noticeable trend in the U.S. and in Europe. We have a feeling that for a segment of premium wines, there will be a transfer from tin to polylam capsules."

Graham Wilson, president of long-time capsule supplier A.O. Wilson, Ltd., Ontario, Canada, commented, "We have just recently experienced a winery like that. The customer bought tin capsules for the first introduction of their package to the market, and now for the re-order has switched to polylam capsules. The price is definitely the reason."