Ep. 16: Reinventing the Wine Bottle with Santiago Navarro of Packamama

Join Keith Anderson and Santiago Navarro, founder and CEO of Packamama, a company reimagining wine packaging to lower emissions while winning at the shelf and preserving tradition. This episode is an interesting case study covering the importance of packaging from a transit perspective, the unavoidable risk of breakage, and the consumption experience of wine. Learn how Packamama has approached creating a package for the future with those and other considerations in mind.

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Keith Anderson: Welcome to Decarbonizing Commerce, where we explore what’s new, interesting, and actionable at the intersection of climate innovation and commerce. I’m your host, Keith Anderson, and together we’ll meet entrepreneurs and innovators reinventing retail, e-commerce, and consumer products through the lenses of low carbon and commercial viability. 

Hello, welcome to the Decarbonizing Commerce podcast. I’m your host, Keith Anderson. Many conversations about sustainability and climate in retail and consumer products disproportionately focus on the role of packaging, and understandably so, it’s among the most visible and tangible elements of a product’s environmental footprint.

But life cycle analyses often reveal that in many categories, packaging is a meaningful but not a primary source of emissions. But today’s conversation is about the wine category, where the glass bottle actually is the single largest source of emissions. That is, the energy required to produce, move, and recycle wine bottles accounts for almost a third of the typical wine’s climate footprint.

And so I was really intrigued and interested when I discovered a company called Packamama, which is reimagining wine packaging in the context of the need to prioritize lowering emissions, as well as a retail landscape where digital commerce is a growing part of the equation. And, you know, wine is, is I think a really interesting case study because the packaging is important from a transit perspective, because there’s always the risk of breakage, whether you’re at the digital or the physical shelf, it’s a really key part of how shoppers discover and choose which wine to drink.

And naturally, the consumption experience has, a lot to do with the packaging also. So I think it’s a really interesting case study to look at and learn how today’s guest has approached, creating a package for the future with those and other considerations in mind. And I think wine is also a really interesting category because it’s among those that is already facing significant impacts from rising temperatures and extreme weather.

So I’m really excited for you to listen to today’s guest, Santiago Navarro, founder and CEO of Packamama.

Santiago, we’re recording on a Friday morning, where I am, I guess, closer to the end of the work week where you are, so, happy Friday. Do you already know what wine you’ll be enjoying this evening?

Santiago Navarro: Not too sure yet. It’s been a busy week, but yes, likewise, happy Friday to you. I am speaking to you from central London. So I’m sitting across from Big Ben, actually. So very central London for those who know the City of London. I’m Santiago Navarro, CEO and founder of Packamama. Packamama stands for Packaging Protecting Mother Earth, or Pachamama to some indigenous peoples.

And what does Packamama do? We offer sustainable wine bottle packaging to the wine industry. Why sustainable? Because Shape Innovation allows us to pack these bottles like books or to cross pack them. So very spatially efficient. We get about double the product in the supply chain. Very lightweight because they’re made from recycled PET.

That’s the plastic we use for drinks bottles. And finally, recyclable in most recycling systems across the world. So, we, we offer this packaging to the wine industry, and I can immediately explain why, or if you have questions, Keith, please let me know, but, I think the context to why we do sustainable packaging in wine and why wine needs to decarbonize is a fundamental place where to start this conversation.

Keith Anderson: Let’s start with that, you know, why, why did you end up focused on wine and, and why was packaging where you focused within that industry?

Santiago Navarro: Yes, so I first came into wine as a wine retailer, and that’s, gosh, nearly 15 years ago now. And I was offering wine as most people do and the packaging in which it’s come. But actually when you take a moment to think to why does wine come in the packaging it does, you start to realize that actually, wine companies in 21st century are using 19th century packaging, which is an incremental innovation over 17th century packaging. So the round glass bottle as a wine bottle is a British invention in the 17th century by a gentleman called Sir Kenelm Digby, who came up with the glassblowing process to make wine bottles strong and at scale.

So pre that point, wine was moved around in other containers. But Digby came up with the bottle that’s known as the Onion Bottle, and that has informed the wine packaging for the last 400 years. 200 years ago, the French Adapted Digby’s Onion bottle to the bottle of shapes we know today. And if you pick up a wine bottle in California or New York or Florida or in Con in Europe, the UK, et cetera, these, these are the bottles that actually spread with the noble grape varieties, which are the principal grape varieties that have spread across the world, the world of wine. And with them came these two shapes. Actually, this bottle is informed on the Bordeaux, claret in some cases called. Then there’s the Burgundy bottle with the more slopey shoulders.

And so, it was whilst trying to build an online business in wine where I came to realize what a challenge using 19th century packaging is, because I know we might be here to talk about decarbonizing, but let’s start with talking about being successful. Wine is the ideal product for online sales because it’s got a long tail, like books or, or music.

And so, the possibility to sell wine online makes sense from a logical perspective, but actually wine has not been very successful online compared to the big retailers as much as it should be. And so, that’s in my view partly down to the problem with packaging. If you try to send out wine in round glass bottles successfully, D2C using couriers or third party delivery companies, it’s a real challenge.

It costs a lot of money. It requires a lot of packaging. If it breaks, it’s a health and safety issue because of, because of shard glass. And so, you know, wine needs a packaging refresh, and so it took me working in the wine industry to start to realize, that wine probably needed a bottle upgrade, and so that’s what I decided to do is to launch that bottle upgrade, looking at all the aspects that are relevant for successful… I mean commerce, you know, space and weight or volumetric weight, as it’s called, if you look at a, UPS or DHL or FedEx or whatever. And

Keith Anderson: Sure.

Santiago Navarro: how do we make best use of the space available in a carton, in a truck, in a, in a, in a, container and how do we light weight? And so then that extrapolates actually into cash savings can convert also into carbon savings. And, just a final point on that. We can elaborate more in a second, should you wish. The, wine industry has, a hotspot, or there is a focal point, which is the majority of wine’s emissions. And that is its current round glass bottle packaging. Its manufacturing, movement, and recycling.

So, yes, whilst glass might be considered the status quo, it is contributing the majority of wine’s emissions, US studies, European studies, Australian studies, all show the same thing. And so if wine wants to get serious about decarbonizing in a climate crisis, it’s got to change its bottle.

Keith Anderson: If we can spend just a minute or two, I think it’s really interesting that part of what led you to this business was the, the, sort of, what, what made wine a good fit for e-commerce, but some of what was holding it back, and I think it’s just worth unpacking for a minute some of the trade offs between the, let’s call it the prevailing packaging and, and what we’re talking about here. Obviously, lightweighting and reducing cube, or volumetric weight saves space. You know, you’ll have both material cost savings and, and other logistic savings. You’ll also, I would imagine, due to using plastic instead of glass, have potentially less shrink in the sense that you’re going to have less or no breakage, so all that I think makes a lot of sense as it relates to e-commerce.

Are there, are there scenarios where that packaging makes equal sense for a brick and mortar environment, or were you thinking of this as way that wine could, mature in, in e-commerce the way that other categories have by rethinking product design and formulation, packaging and other factors to be more compatible with that model of retailing?

Santiago Navarro: Yeah, great question, because initially I thought our greatest successes and advancements would be in e-com or D2C, but then I realized actually till consumers understood what they were potentially buying, it was better to be in bricks and mortar, so people could actually grab the pack, identify it, and then reorder it online, so, my preference nowadays, we’re available in nine countries, we’re launching in the US in the middle of this year, across the US actually with a big retailer, so, by, by middle of the year, we’ll, we’ll be widely available. Yeah, I’ve come to realize that we’re probably better starting in bricks and mortar and then evolving into D2C, but there are instances where there has been an entire D2C deployment and it has been successful.

One such example is, end of last year in Australia, Australia’s largest organic wine producer, Tamburlaine Wines, produced just sort of 30, 000 units and put them up on their popular website and shared some of it at Cellar Door, but certainly through their website. And we were sold out before the festive season started.

So, really a very good pickup for tens of thousands of units very quickly and sold out really well and, and delivered really well, which is important because, as you correctly pointed out, costs of delivery when you have breakages, when you have expensive packaging, because it’s heavy and very volumetrically large to make up all the padding and other things required for fragile glass.

That doesn’t, it’s not helpful for wineries and I know that in the US, D2C is very important for wineries and actually wineries in the US are really good at bringing people to cellar door and signing them up to newsletters and then selling direct. So there is, you know, there is a need to have better packaging there, but in answer to your question, my preference for the time being, as we’re still new kids on the block, is that people can see us in bricks and mortar retail and, and can, you know, engage with what we do.

We regularly see on social media, people having discovered our product in some retail store somewhere and needing to share it with their community or their followers and these are just consumers so not somebody in a sort of professional environment but more in a social environment say hey look what I found and look at this how interesting it is it’s it’s flat back etc and that’s I think important also with packaging that works in summary so just use the term works for multiple facets it’s engaging it should stimulate people to you know, pick up that product and stand out from the crowd.

And that’s also important in wine, because even in bricks and mortar retail, it’s usually a quite a big selection. And so, having a competitive advantage through visibility on the shelf is important.

Keith Anderson: Yeah, I want to come back to the consumer perception and, and, you know, attitudes and behaviors towards it. You’ve mentioned retailers a few times, when you’re working with retailers, are these for their private label or own label wines, or how do you work differently with a retailer versus a winery?

Santiago Navarro: Yeah. So we’ve been really grateful to those retailers who have positively engaged with us and helped us to navigate how we potentially get more wines into their stores. We recognize that, wine producers… well, getting wine producers to push is far, far harder than getting retailers to pull. And what I mean by that is if a retailer says, “We’re open to seeing what brands might be interested in this bottle for our stores” and you take that to producers they’re of course really excited that there might be an opportunity to get a new listing or listings whilst if you go to producers and say “will you use a novel packaging that’s, you know, not got all the data you want to prove that it’s zero risk and will you use this and pack into it and then offer it?” Most will say no because I want to prove demand before I take supply.

And so, yeah, the, the engagement retailers is super important. It’s mostly been branded to date. There is some own label coming up in 2024. But, but yeah, ultimately we should end up doing both. Because, the big retailers have become very good at own, own label, wines and, and they can be very large volume and that’s where we can have the biggest impact on reducing emissions is, once again, Packamama stands for Packaging Protecting Pachamama or Mother Earth and it’s really important that that’s what we do.

We take all the aspects, the other aspects of packaging super seriously, like protecting the goods that are inside it, being of the best quality, all the food contact approvals, all those matters are taken for granted. And, frankly, if nobody’s doing those basics, then they should not be in business.

But there, in our view, there needs to be another layer and an important layer that’s not just some icing to the packaging cake, but it’s the foundational items of what you do. And that is being a benchmark example of all the levers you can pull that are meaningful to reduce emissions, because we’re in a climate crisis, but also because wine is more deeply impacted than most by global warming.

The vines that give us wine, vitis vinifera, as it’s called, so it’s one strain of the, of the very varied number of grapes used, including, eating grapes. They are very sensitive to temperature. And for 8, 000 years, they’ve been, they’ve enjoyed consistency. And now they get inconsistency.

And that is freak cold, drought, blistering heat. It might go from blistering heat to freezing cold to blistering heat again. So it’s these extreme weather events that freak the vines out to avoid getting geeky on technical terms. And they’re not good for wine. A couple of years back, France paid out 2 billion euros to producers because of a freak cold snap in, in April. Bear in mind that that’s in the run up to summer, where, where the vines, you know, the grapes start to ripen and then, then only harvest at the end of summer. And traditionally, actually, Europe has harvested its grapes at the end of summer, but now harvesting comes right into mid summer and August because it’s been, so incredibly warm so soon, et cetera.

So yeah, there’s more I can share on that. I don’t want to get into too much detail on it, but I think it’s important to realize that wine has a far larger existential threat risk from global warming than some other products we eat and drink. And so wine must over index in its, meaningful actions to slash its emissions more than others do, because it should do it for its own survival.

Keith Anderson: Yeah, I think it’s a great point. We, I come from a background in consulting. And so I love a nice 4 box chart that that sorts things into quadrants. And one way we’ve been looking at categories across the industry is on one dimension, action you take to mitigate the future impacts of, emissions and warming, and the other is adaptation. And, you know, there are a half dozen categories that are rising to the top of the list, cocoa is one, you know, wine, I think is likely to be another one. Olive oil was one. We interviewed Berk Bahceci of Heraclea, which is a family owned olive oil producer, but he was sharing similar, anecdotes about some of the really significant impacts on yield and surety of supply.

So, in, in some categories, what you’re doing is really, trying to reduce emissions so that the problems facing all categories, all retailers and all brands, are, are not getting any worse than they need to be in the future. The flip side, though, is the adaptation part of the equation, which is, because of the growing volatility and uncertainty, you know, some categories are being impacted much more directly and, it’s happening today.

So, I think it’s an important point that you share.

Santiago Navarro: Yeah, there is, thank you for that, Keith. There are two things discussed regularly in wine about adaptation, not mitigation, and that is grape varieties and location. So, on the grape variety front, in a warming planet, more people can plant the grape strains that have, from let’s say southern Italy or Sicily, that have become really, I guess well adapted to blistering heat.

But the reality is the beauty of the world of wine is the cooler climate, chardonnays or pinot noirs from Burgundy, or the wines from Oregon, et cetera, we can’t, the, the world of wine loses its beauty. If we suddenly have just a few great varieties delivering a very similar flavor profile, then we have this huge diversity that makes the wine industry unique, not rare, unique in terms of the variability and the beauty it offers.

So, so that’s the grape issue. We can’t, you know, ignore that. And then location. Of course, there’s a possibility to move to where it’s currently cooler and abandon where it’s warmer. But once again, Australia is a good example, so Tasmania is a cooler part, and south of the mainland continent, but there’s not enough space for all the producers to move to Tasmania.

The Northern Californians can’t all go to Washington State, which is also good for grape growing and it’s more, more than so likely to be cooler. You know, Northern Italy, Tuscany, you know, very beautiful part of Italy. You know, whole communities have subsisted for generations on the wine industry and olive oil.

They can’t all move to continental, sorry, the Nordics or to the UK, which is higher up on the European continent. So, yeah, it’s, it’s, it’s, you know, there’s already a big growth in the English wine industry because, the climate here has become warmer. But can all French and Italian wine producers move to the UK?

Makes, no, it doesn’t make any sense. It’s, so adaptation needs to be looked at. But, yeah, if your house is on fire, put out the fire first, not start to look to buy another house. I mean, and that’s, that’s the reality of how you handle a fire in your house. You put out the fire first.

Keith Anderson: Yep. Well said, I want to, I want to jump back if we can just to the dynamic that you were describing between. The retailers and the producers because I think it parallels something that I’m seeing in many categories, which is, the retailers naturally have some leverage because, well, direct to consumer and marketplaces have really, lowered barriers to entry and made it easier to, you know, hang a shingle up reaching, a critical mass and scaling still happens mostly through retail. And so decisions about assortment and merchandising and marketing, often, you know, how you work with leading retailers is, big driver of your success. So, what I’m, what I’m seeing are retailers that have made commitments and are increasingly shifting their attention to scope three emissions.

And so they’re looking upstream and downstream. And most of what I’m seeing at the moment is more encouragement and incentivizing suppliers to, you know, take action that will align, their, their approach to doing business with some of the retailers climate and sustainability commitments. But, you know, what I’m seeing, the reason I asked about Unlabel was, before I understood the approach, I’m seeing some retailers.

Move most aggressively with their own labels to create choice within a category that looks the way they’d like to see things in the near future. And then in parallel, they’re doing things like introducing you know, dedicated sections, endcap displays, badges, or other designations that show up online at the digital shelf in store in the physical environment, but ultimately the retailers are increasingly using their position of leverage to try to influence what their suppliers are doing. And if I understood you, that’s a dynamic that you’re seeing play out as it relates to how you are engaging the industry. Is that, is that correct?

Santiago Navarro: Yeah, so, so a couple, yes is the short answer, but it requires a bit more context. So firstly, you’re right, as the retailer being the, gateway to the consumer’s wallet, has the power. So, so they can influence change far, far quicker than those who are further down the supply chain, including the very big CPG, multinationals, who will be obvious to those listening to the call, I don’t need to mention who they are.

And then if you look at, research done on the emissions from the big international retailers, scope three is where it’s all at. So, the last time I saw a presentation on this was from the, great, ladies and gentlemen at Rabobank, the, the, well known international bank. And they were showing high 90 percent across a number of global retailers in terms of what was scope three emissions.

So, retailers have to work with their supply chain to, to reduce their emissions. There’s no, no way about that. In terms of the own label versus branded. I understand why probably to date we’ve done mostly branded, but now we have two big own label projects coming together, which are, you know, all agreed and being put in place in terms of production, et cetera.

I think wine is probably more branded than most other products. We, whilst there is own label products, if we go into a, you know, if we look at an average basket of goods, grocery goods, wine is probably one of the more branded and the expectation is to show selection because the consumer has a view that the wine industry is all these little producers or probably harvesting by hand.

Of course, the wine industry looks very different than a commercial and than it does in the sort of romanticized pictures. But it’s that romanticized picture of the world of wine that partially makes people feel that it’s all warm and fluffy. But yeah, the, the own label must, join the branded.

And frankly, there just needs to be a shift in packaging. It’s really important that I highlight that my view as an organization that has a focus area on the type of packaging we do. We believe in better bottle packaging. We don’t believe in alternative packaging, because in our view, wine is consumed at dining tables with friends and family.

And so having a product that looks good is fundamentally important to the experience. But there are other formats like aluminum cans and, and bag in box technology that have been successful. And I applaud them and I wish them the best of luck. I also wish Lightweight Glass the best of luck. I just believe that the wine industry, if you look at a pie chart in the next few years of the types of packaging used for wine, it should look more like a fair and equitable split across the pie chart, because at the moment It’s one big slice and a crumb at the end for anything that’s non glass, and that’s not a proper split of a pie in any sense of the imagination, and, and, okay, we could get into discussion, by the way, of should you need mineral water that’s bottled, but if you do look at mineral water that’s bottled, it’s available in glass, it’s available in PET, it’s available in can, it’s available in carton.

These are the technologies that exist, that, that work for various reasons, and they satisfy different commercial and sustainable goals. And so, yes, you can see these, and if, and that’s the same that happens in most other drinks, but wine. Wine has existed in this bubble. My view is that bubble is no longer remotely possible, let alone sustainable.

So, we will continue to offer a solution that is respectful to heritage and tradition. This is a cross section design of this bottle shape that is designed exactly to replicate the most popular of the two bottle shapes. We will release a burgundy shape and flat pack also, because that bit is not broken.

It’s the part that connects the certain grape varieties that, That came from those two popular regions in France, Burgundy and Bordeaux. But, but, yeah, we just need a diversity of packaging to fulfill different consumption occasions, but different commercial and sustainability goals, not a one size fits all.

Keith Anderson: Yeah, I think that’s, that’s an important and refreshing perspective. In a lot of, in a lot of the aspects of sustainability that I’ve dug into and packaging and materials seems to be where some of the discourse is most polarized in a sense. You know, there’s a lot of, a lot of focus on “we need to transition everything to this approach or that approach.”

I think part of what we’re uncovering here is, as you say, different consumption occasions, different, commercial and distribution models have different considerations. I think it’s, it’s really interesting in any of these packaging scenarios to talk about the consumer and not only what it’s like when they’re at the point of decision, am I going to buy this one or that one?

Which is why I’m glad that we got into some of the brick and mortar and sort of retail experience discussion. And then secondly, at the point of consumption, this is where I see so much of the tension and, sort of stalled progress in a lot of the big multinationals, candidly, because they’re struggling to get all of the functions aligned on, you know, our, our packaging is how we stand out at the first moment of truth.

And. It has all of these other important, factors like preventing waste and preserving freshness and protecting the product and, you name it. And so, when, when there’s an emerging solution that is sort of singularly focused on the climate or sustainability benefits, there seems to be a lot of resistance if these other factors that we’ve been talking about aren’t considered.

Santiago Navarro: Definitely. I mean, I should be clearer and maybe have said this further up in the conversation that, in our view, sustainability is triple bottom line. When I say sustainability, I don’t mean environmentally friendly or eco friendly. That is the planet pillar of sustainability. But when I say sustainability, I mean planet, people, and profits.

You’ve got to work. You’ve got to be scalable, you’ve got to, you know, deliver benefits to the consumer, to probably the most demanding person in business, the chief financial officer, and you’ve got to, you’ve got to work for, for Mother Earth, as our planet is, is, so unwell. So, yeah, I think that’s, that’s, that’s an important one on the triple bottom line, if you cannot, show that you can be pleasing to all those three, then you’re probably not going to significantly scale. But I also want to add to the point you mentioned before, I mean, anyone who says they’ve got a solution that addresses everything in a, you know, global marketplace or in a, a global industry like wine, 32 to 35 billion bottles annually, that’s probably, frankly lying or they don’t know what they’re talking about.

Santiago Navarro: The Coca Cola company is a great example. You know, they went from the iconic glass bottle to PET packaging and aluminium, but they kept the iconic glass bottle and that is served in fancier drinking occasions. If you order a Coke in a fancy restaurant or hotel bar, they will bring it to you in the iconic glass bottle.

They will not serve it from PET or a can. But if you buy it on the go, you’re going to get it in one of the two measures and you’ll normally see them side by side depending how much Coke you want to drink because that packaging works far better on the go than than glass will, including the fact that you don’t need a bottle opener, but in the glass format you need a bottle opener.

So if you take that out and you know, don’t have one of those on your keyring like some people do, but not everyone, then, then you’re stuck. How do you get it open? So I think it’s important to look to those who have been phenomenally successful, not just successful, and look at what they’ve done in packaging and how it’s worked.

Because rest assured that if there was another packaging format that allowed success, the Coca Cola company would have deployed it.

Keith Anderson: Hey folks, this is the part of the show where we say thank you and see you soon to the general audience, plus and higher tier members of Decarbonize.co, stay tuned for the rest of the episode.

Keith Anderson: Thanks for listening. I’m Keith Anderson, the executive producer and host of Decarbonizing Commerce. Sonic Futures handles audio, music, and video production. If you enjoyed the show, we’d really appreciate it if you took a moment to subscribe and leave a review or share it with a colleague. For the full episode and more member exclusive insight and analysis, join the Decarbonizing Commerce community at decarbonize.co. Thanks for listening and we’ll see you on the next episode of Decarbonizing Commerce.

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