9.1.5 Case Study

Screw Cap Wine Closures: A Case Study of a Resistant Innovation 1



Although screw caps perform well in preserving wine quality, the wine industry has faced consistent resistance to them from consumers and distributors. In consumers’ minds, screw cap closures have often been associated with cheap, high-alcohol wines and thus have had a negative image. As a result, consumers have not historically accepted screw caps on high-end, high-quality wines.

Between 1976 and the early 1980s, approximately 20 million wine bottles were sealed with the screw cap closure in Australia and New Zealand. However, by 1984, these wineries had stopped using screw caps because of consumer resistance. Wineries found two types of consumer resistance toward screw caps: The first is the image barrier, since brand image suffers when consumers perceive wines bottled with screw caps as cheap and inferior, and the second is a tradition barrier. “Traditional consumers,” a segment identified by wineries we interviewed, prefer the romanticism and tradition associated with opening a cork-bottled wine and have refused to adopt screw caps. Resistance also existed from the distribution side, from distributors that doubted consumer acceptance of screw caps and shunned the extra marketing costs of pushing the new product into the market.

Despite the dismal market launch failure in the late 1970s, the wine industry continued to push for the diffusion of screw caps. Stelvin screw caps were reintroduced into the marketplace in Australia, New Zealand and the United States in the early 2000s — using two quite different marketing strategies, with varying results. To date, U.S. wineries have experienced individual success in selling their screw cap lines to their target markets. However, screw caps are far from being accepted by the mainstream American consumer. A survey conducted in 2005 revealed that fewer than 10% of American wine consumers prefer screw cap closures to other closures. As a result, the mainstream U.S. market has not yet adopted the screw cap as the standard wine closure.

In Australia and New Zealand, however, screw caps have recently surpassed cork as the closure of choice for wineries, and screw caps are widely accepted by domestic consumers in those countries. Since the screw cap’s reintroduction in 2001, its usage has grown: In 2005, approximately 40% of domestically sold bottles of wine in Australia and more than 80% of domestically sold bottles of wine in New Zealand had screw cap closures. Wines with screw cap closures are now the first and fastest to sell in both markets. The quite different marketing strategies used by U.S. and Australasian (Australian and New Zealand) wineries have apparently led to these vastly different diffusion results. In particular, the New Zealand wine industry’s dramatic success in increasing screw cap usage yields key lessons about using horizontal cooperation, also known as “coopetition,” to market resistant innovations successfully.
Horizontal cooperation, or coopetition
, refers to the need to involve competitors in developing a marketing strategy for the innovation. In some cases, horizontal competitive cooperation can be a marketing option for diffusing resistant innovations; our research suggests it can be used effectively by competing companies when they benefit collectively from the diffusion of a resistant innovation. In these circumstances, two or more businesses share a mutual goal that cannot easily be attained without the cooperation of partners.
The best marketing strategy for a resistant innovation depends on the company’s overall goal relative to the industry environment.

1 Rosanna Garcia, Fleura Bardhi and Colette Friedrich, 2007, “Overcoming Consumer Resistance to innovation”
2 Source: Photo of glass of wine taken by www.freedigitalphotos.net (no photographer outlined).