Saxco Update - May 2026
Cost pressures remain; visibility improving
Welcome to May’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 May 13th. 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.
Influences on packaging decisions
The wine market is beginning to show signs of movement, but not momentum. Buyers are engaging selectively, focusing on specific varietals, formats, and price points where they see near-term opportunity. Wineries aligning their strategies to today’s market dynamics are finding pockets of stability, while those relying on legacy models continue to face pressure. Buyers are prioritizing flexibility, shorter-term commitments, and targeted fulfilment rather than large-scale inventory builds. Near-term, the market remains adequately supplied, with pockets of oversupply still present.
Consumer behavior remains a central factor. Occasions are shifting, frequency is down, and younger consumers continue to engage differently with the category, placing greater emphasis on experience, value, and flexibility. Growth that does occur is not stemming from broad-based consumption increases, but from targeted products matching consumer demand.
These dynamics are increasingly influencing packaging decisions. Format, size and occasion positioning are playing a greater role in how wines are marketed. One notable trend is increased demand for smaller format bottles, particularly 187ml and 375ml, as wineries respond to changing consumption patterns, single-serve occasions, and more moderated drinking.
Geopolitics & trade policy
From a packaging standpoint, cost pressures remain, though visibility is improving. Energy-related surcharges are still flowing through pricing in the second quarter, reflecting Q1 volatility.
At the same time, recent geopolitical developments are reinforcing how sensitive glass production is to energy supply. Disruptions tied to the Iran conflict have begun impacting fuel availability in key manufacturing regions, contributing to production slowdowns, rising costs, and potential supply constraints. While the full impact is still developing, this underscores the importance of planning for continued variability in both pricing and availability, particularly for energy-intensive packaging like glass.
Trade policy remains an overhang. The 10% import surcharge continues to affect landed costs for imported goods, while export challenges persist in key markets. While not new, these pressures are now being more consistently incorporated into planning and pricing strategies.
The bottom line
The market is not recovering in a traditional sense, but it is becoming more defined. The difference between growth and decline is increasingly tied to alignment between product, packaging, pricing, and how consumers are engaging with wine today.
What this means for you
Focus on alignment, not scale: Growth is coming from targeted opportunities where product, packaging, and occasion are clearly connected.
Build flexibility into your packaging strategy: Choice in format and supply is becoming more important as both demand patterns and supply conditions continue to shift.
Bottle Tidbits – Energy is one of the most important, and often least visible, inputs in glass production. Glass does not just require heat, it requires constant heat. A single glass furnace operates continuously at temperatures above 2,800°F and can consume energy equivalent to tens of thousands of homes in a single day. Once running, these furnaces cannot be easily turned off, making energy availability and cost a critical factor in glass supply. In today’s environment, shifts in global energy markets do not just influence pricing, they can directly impact production capacity and availability.