Some of my friends in the label industry know that I have been writing about the beer industry for decades, and in recent years have been active in other aspects of that field. With growing satisfaction, all of us who enjoy craft beer are delighted at the growth of local and regional breweries, makers of classic and new beer styles with flavor far transcending the commercial light lagers that dominate the marketplace.
It was only a year or so ago that the number of breweries in the United States surpassed the previous high of around 2,500 that operated before Prohibition – that most dismal period from 1920 to 1933. As Hrinya notes, the number has risen to more than 3,500, though not all are producing packaged beer; many are brewpubs, and a handful are brewing just for the bar and restaurant trade.
Here are some US marketplace statistics to give the label printer some idea of how large the target is.
The economic impact of beer in the US is now $253 billion. While that number does not put it in the top 100 industries, beer is still twice as big as the US wine industry.
In 2014, the beer business contributed 1.5% of the US gross domestic product, according to the Beer Institute, an association composed mainly of large commercial brewers. The $253 billion includes the contributions of brewers, importers, distributors, and retailers. The institute incorporated salaries of people involved in the beer industry, sales by brewers, and spending by people who work in the beer trade.
The American beer industry employs more than 1.75 million people, directly and indirectly, in more than a dozen different categories, including farming and packaging. The Beer Institute says that 70% are directly employed by large and mid-sized brewers and beer importers. Wages paid to all of those people were $78.6 billion last year.
Beer and other alcoholic beverages are taxed at several levels. Federal, state and local taxes on the beer industry amounted to more than $48.5 billion last year. That includes business, personal and consumption taxes, as well as taxes on sales, gross receipts and revenue collected from state and federal excise taxes.
Most of the beer industry’s economic contribution comes from large brewers, but it’s worth noting that one out of every 10 beers sold in our country is a craft beer. As reported in the previous issue, by 2020 that fraction is predicted to rise to 15%. (There is no legal definition of craft beer. Industry groups, particularly the Brewers Association, fight about that. Lately big brewers are buying up small ones and distributing formerly local brews nationwide. It is an irritant to purists, of course, but such is capitalism.)
As of June of this year, sales of craft brew were up 15% over the same period in 2014. Of the 3,500 operational breweries in the US, about 3,400 are craft beer producers. The Brewers Association, composed mostly of craft beer producers, says that about 1,750 breweries were in various planning stages as of June 2015. Craft brewers employ just over 115,000 workers.
A recent article in Fortune magazine pointed out the significant contribution that brewing makes to the farming industry. “Craft breweries tend to use a lot more of the key brewing components per batch than large competitors like Budweiser and Coors. How much? A recent research report from the US Department of Agriculture notes that the average craft style beer uses between three and seven times as much malt per barrel as a mass market lager.”
And the craft people use a heap more hops, too. Brewers say that today they must order their hops up to three years in advance to ensure an adequate supply.
A packaging blitz
Those who work in the beer business are well aware of what is taking place with packaging. I would describe it as a frenzy, and I know that the designers are loving it.
In the past two years alone, branding and packaging has been reworked at hundreds of breweries. New brews in seemingly endless styles and variations are being introduced by all of them. Everyone produces a beer for each season, and some make two. This means new front labels, back labels, neck labels, bottle caps, cans, four- and six-pack holders, 12- and 24-pack corrugated boxes, point-of-purchase graphics, truck graphics, billboards, print ads, online ads, television commercials, neon signs, glassware, clothing, and whatever else can spread the word.
For the bar, restaurant and hotel trade, known in the beverage industry as on-premise, this means little, because those venues rely on kegs and on menus rather than on branded promotion. The packaging is critical at off-premise retail establishments, the stores that sell beer for consumption elsewhere. The industry’s furious growth is frustrating many retailers because shelf space doesn’t grow on trees, and yet they want to offer a wide selection to maintain their edge in a highly competitive marketplace.
Many brewers employ graphical themes that link their beer varieties, making them easy to identify on the shelves. Others do not, which can confuse. Personally I don’t understand the latter decision, but those brewers are successful and well established. Regardless, the crowded shelves today make for a dizzying array of designs, colors, styles and names. (There are so many names today in use among brewers that more and more they are finding themselves challenged by another who has already trademarked that name.)
A new digital system
Some brewers are taking advantage of the capabilities of digital color label presses to differentiate their labels. One brewer in Belgium, Martens Brouerij, is using a recently developed inkjet system to apply images directly to PET beer bottles at the very end of the manufacturing process.
Martens is launching Dagschotel, a new brand, in coordination with a popular group of Belgian TV sitcom actors known as “F.C. Kampioenen.” The launch features four different images on the beer bottles, each of a different actor. Using a smartphone app with one bottle, the consumer can receive a special performance on the phone. When two bottles are brought together, the app delivers a dialogue between the characters.
The print process is called Direct Print Powered by KHS. A global supplier of filling and packaging systems for the beverage industry, KHS is based in Germany. The print system uses Xaar 1002 heads and low migration inkjet inks from Agfa to print CMYK+W in high resolution (1080 dpi, optical) at the rate of up to 12,000 bottles per hour. Images up to 2.75" (70mm) are possible on bottles up to 4.75" (120mm) in diameter.
Martens makes use of Plasmax FreshSafe-PET barrier coating, developed by KHS, to give enhanced shelf life to Dagschotel beer in conjunction with the low migration UV curable inks.
Of special note, to me at least, is the use of PET beer bottles. These are growing in popularity across Europe, but in North America you would be hard-pressed to find even one. They are easily recyclable, far lighter than glass, and represent an enormous savings in transportation costs. But old habits die hard, of course, and some Americans still refuse to buy a beer that comes in a can.
The author is president of Jack Kenny Media, a communications firm specializing in the packaging industry, and is the former editor of L&NW magazine. He can be reached at jackjkenny@gmail.com.