Saxco Update - April 2026
Energy price volatility adds to packaging costs
Welcome to April’s update from our friends at Saxco, on market dynamics in beverage packaging.
This update first appeared as a paid subscriber feature in the Ciatti California Report on April 14th. If you are not yet a paying subscriber and would like full access to the monthly California Report, its actionable bulk wine and grape market intelligence, bulk inventory charts by volume and by varietal, and bulk/grape market activity barometer, you can check out our subscription plans by clicking this button.
Trade & energy uncertainty
Trade policy continues to create uncertainty. The 10% import surcharge under Section 122 has reintroduced cost pressure for imported goods, while export disruption, particularly in Canada, remains a meaningful headwind for US wineries.
From a packaging standpoint, energy remains a key factor. Natural gas, a primary input in glass manufacturing, saw significant volatility in Q1 due to severe winter weather and elevated demand. While forward pricing has begun to moderate, Q2 pricing will still reflect prior-period averages. As a result, energy surcharges are expected to trend slightly higher in Q2, capturing Q1 volatility rather than current conditions.
The key takeaway is that while the market is stabilizing, cost relief will not be immediate. The second quarter of 2026 will still carry the weight of Q1’s volatility before any normalization begins to show.
Innovation gaining traction
The California wine market remains challenged, but there are early signs the industry is shifting from pure correction mode into a more selective reset. Recent Ciatti commentary has pointed to potential “green shoots,” with bulk pricing stabilizing and some buyers beginning to pursue targeted opportunities. This is not a full recovery, but it does indicate that parts of the market are starting to position for what comes next rather than simply react to ongoing pressure.
Demand signals remain mixed, but not without opportunity. While overall wine depletion trends remain disappointing, there are pockets of resilience where product, price point, packaging, and occasion align with consumer preferences. Innovation in alternative formats, lower-alcohol offerings, and occasion-based packaging continues to gain traction. There is increasing clarity around what is working: Disciplined supply, focused channel strategy, relevant packaging, and consumer-aligned positioning are becoming the differentiators.
Companies must plan for near-term cost pressure – second-quarter glass pricing will reflect the first quarter’s energy volatility – and focus on aligning product, packaging, and positioning to specific consumer occasions.
Bottle Tidbits – Not all glass is created equal, and even color matters: Flint glass requires higher energy input, while amber and green glass can incorporate more recycled content, reducing energy demand. This means that, in today’s environment, glass color is not just aesthetic, it can influence cost, sustainability, and supply dynamics.