Market Focus

Wine Labeling

July 20, 2005

Pressure sensitive labels own a large share of this lucrative market.

If you are like most people, you don't know too much about wine. You know what you like and you like how it makes you feel, but the choices of brands can often be overwhelming. Usually, after wandering liquor store aisles and scanning the bottles, your final decision, conscious or not, ends up based on the appeal of the label. While a label provides much information, such as the winery, the country or region where the grapes came from, vintage and variety, the look seems to be the most important factor. And rightfully so. The label is practically just as important as the wine itself because it is the ambassador of what's inside.

"The label is often the biggest 'billboard' for the brand manager. They have mere seconds to grab the consumer's attention and get them to choose their wine over the competitor's product. The retail shelves are very crowded so it's really all about differentiation," says David Busé, VP, Collotype Labels, Napa, CA, USA.

Paul Gungner, now self-employed as a consultant, had worked for more than six years as art director at LSK Label, El Dorado Hills, CA, USA. "There is a lot invested into the brand, and the brand is the product, really. We want to think it's the wine in the bottle but it's the label on the bottle. It has to follow up with something actually good in the glass, but it's about that label and the brand. That's the make or break."

Until the previous decade, wine labels were a standard three-by-four-inch rectangle printed on flat paper sheets and glue applied. Since the introduction of PS labels, wine labels continue to evolve with rotary diecut shapes, popular foils and more creative designs.

"There has been a pretty strong demand for high quality, multiple colors, foil stamping, boxing, diecutting, special top coatings, and aqueous coatings that protect in scuffing," says Jim Reeve, customer service manager at Gordon Graphics, Novato, CA, USA. "The demand is for very high quality."

Because most of these demands can be executed only with PS labels, the converters have conformed and invested in the appropriate materials. Over the past decade, wineries have been changing their packaging processes to accommodate PS labels. This has caused some sheetfed offset printers to explore pressure sensitive label processes to maintain their market share, industry observers say.

According to the 2002 Global Wine and Wine Label Market Study Awareness Report by Alexander Watson Associates, self-adhesive labeling is the fastest growing label solution in the global wine industry. Growth rate is approximately 21 percent per year, and at this rate, self-adhesive labels will attain a market penetration of 68 percent by 2008, up from 27 percent in 2002. Self-adhesive labels enjoy their largest market share in New World wine countries, but Europe represents the fastest growing market and has the largest market potential for self-adhesive labels.

PS labels are on the rise due to the opportunities they provide in the production side, as well as offering economic benefits. Their versatility and flexibility, coupled with quicker turnaround time, are counted among the major benefits for the converters and the end users.

The label that adorns each bottle of Ponzo Vineyard's 2002 Zinfandel were produced by Tapp Technologies, of Langley, BC, Canada, and won the Best of Show award last year in the annual competition by the Tag & Label Manufacturers Institute. It also won the first place award in the wine and spirits category for offset printing, color process, prime label.

"The market is definitely growing for PS labels," says David Hoydal, a California based consultant to the narrow web label industry. "The largest companies out there are switching more to PS labels. One thing that it enables people to do is try out many more new looks and designs. It's a lot more cost effective."

"The growth of PS labels in the wine industry has primarily been driven by both marketing and production teams," adds Busé. "Marketing professionals like the flexibility in label shapes and sizes, innovative embellishments now available to them, and the speed to the market PS offers. Production teams like the consistency of application, durability and general ease of set-up when PS is utilized."

"When you look at the total applied costs, PS becomes more economical. These economies come from operational benefits (ease of clean up, quicker application), marketing benefits (new label sizes and shapes, possible clear materials), no need for equipment upgrades, and ease of operation," notes Erin Linville, market segment manager, Avery Dennison, Painesville, OH, USA.

General Manager Bill Knopka of Tapp Technologies, in Langley, BC, Canada, says that PS labels are advantageous for both converter and customer. "Cold glue can be less expensive on the unit cost, but gaining that cost decrease means that you give up other benefits, particularly for the winery. PS printing is in-line, and a finished label can be produced much more quickly. The winery benefits because it can decrease the amount of time to set up its labeling stations, and decrease the amount of time to change labels. You can print very economically for a long period of time with cold glue, but if you need to make frequent changes to meet the various changes in your marketplace, PS is the hands down winner."

Historically, glue applied papers have been less expensive than pressure sensitive products. "Over the years the price has narrowed, says Rick Harris, market product manager at FLEXcon, a materials supplier based in Spencer, MA, USA. "As people like us have made our products wider and run faster, and buy more economical products and have developed new lower cost products to fill these markets, the gaps between PS film and glue-applied paper is closing."


With the seemingly endless wine varietals, and each company trying to stand out on the shelves, packaging trends are becoming more advanced and unusual. Wineries are adjusting to the changes not only to keep up with the market but also to reflect who they are while retaining brand recognition.

"I think that when wineries look to design a label they first have to ask themselves 'Who are we?' because the answer is what you want to represent," says Eric Weisinger, general manager of Weisinger's Vineyard and Winery, Ashland, OR, USA. "If you try to represent something that isn't who you are then there isn't any integrity in that product and your image will only have a certain depth to it."

Weisinger's Vineyard and Winery is redoing its labels, the original designed back in 1988. "What the consumer finds appealing is not the same as what the consumer found appealing 15, 20, or even as recently as 10 years ago," adds Weisinger. "We are changing our label because, in part, we want to have an image that reflects us because we are not the same winery that we were in '88."

While the typical classy and sophisticated labels will always be available, trends are continually advancing in order to stay ahead and keep the target market alert.

Labels courtesy of Gordon Graphics

Knopka says that the biggest change for his company is simply the influx of new brands aimed at niche markets, particularly younger markets. "From our perspective it looks as though a lot of the designs are seeking to attract them and demystify wine. So, you are seeing many more brands that are geared at lifestyle. They seem to be having more fun and the design follows."

This trend is noticeable worldwide. Alex Mulvaney Jr., managing director of Labelgraphics (Glasgow) Limited, in Scotland, has noticed the same move toward a new image and target audience. "The new images for wines tend to reflect it as being a fun drink, a drink aimed at younger people, a less conservative look about the whole product. We see that the older established companies are looking at fresh designs and ways to compete and get into the young market."

Steve Wilcox, vice president of sales for Green Bay Packaging, Green Bay, WI, USA, reports that the wine companies are targeting a younger market by adding bright colors and creative new designs.

David Bowyer agrees. "Animals and goofy things seem to be taking a very active part on the shelf these days. With regards to the big marketers of the wine works, they are in fact doing a lot of gimmicky promotions," notes Bowyer, president of Vintage 99 Label, Livermore, CA, USA. An example he mentions is the Australian wine, Yellow Tail, and in the United States, one company depicts a 47-pound rooster.

Trends go beyond the designs on the labels. Bill Macnaught of Labelgraphics (Glasgow) Ltd. explains that certain enhancements such as multiple labels using specialized papers, foil blocking and embossing are showing up more frequently.

Linville says, "Trends include a move back to uncoated papers and a continued focus on clear films that offer the no-label look."

Market-driven innovations

A recent study commissioned by VinExpo, a trade group based in Bordeaux, projects that the US will be the top wine consuming nation by 2008. Those in the label industry who watch the wine business are aware of what that could mean in the marketplace.

Linville of Avery Dennison explains why the cost of a bottle of wine and the growth in the wine industry have a direct impact on the labels, as well as on all other packaging components. "When there is growth in lower cost wines, packagers do not want to incur the cost of a high end label. Higher priced bottles of wine, however, can justify a premium label that provides premium performance and a premium look."

This Winston Hill wine label won first place in the 2004 TLMI label competition in the category of wine and spirits, flexo, line & screen/tone, prime.

In order to be noticed in this inundated market, many companies worldwide are presenting original ideas. One company in Australia, says David Hoydal, came up with the idea to perforate the label, allowing the consumer to remove one piece as a reminder of what they drank. Some smaller companies are even double labeling so the consumer can peel the top one off and save it.

"The New Zealanders have pushed the screw cap, which is a huge packaging innovation," adds Knopka of Tapp Technologies. "More wineries in North America are embracing this."

"We had one client that desired a different label on every bottle in a case," says Knopka. "One of our customers, Bonny Doon Winery, creates new labels very frequently for their wine club membership and the labels are created from original pieces of art."

With all the demands in the market, even private label wines are growing. Recently, Sam's Club rolled out its own private label wines. "This is common in the wine business. In today's ultra-competitive marketplace, a lot of retailers and sellers of wine are looking for ways to differentiate themselves. Right now in the wine industry there is this enormous demand for the product, and the average quality out in the marketplace has never been higher," states Bob Paulinsky, Sam's Club wine and spirits merchandise manager.

Expert advice

Although many winery owners and their designers understand the creation of labels and the basics of print production, the variety and complexity of a label's components and processes can go beyond their knowledge.

Hoydal feels that the first thing customers have to understand is the cost of the value added components such as foil stamping, types of embossing and foil applications, and the lengths of the run. They also need to be able to differentiate the associated costs between rotary versus flat.

Customers of Labelgraphics (Glasgow) are given a specification sheet detailing the software programs that the company recommends they use. "I also recommend they make initial contact with us before they go too far with the design. We will tell them the kind of machinery that we will be using, the processes, and we'll send a letter explaining how we would prefer the finished art work to be produced," says Mulvaney.

Besides providing the films, substrate suppliers work with customers to get the best label produced. "We get called in once our customer (the label converter) decides what they want," says Rick Harris of FLEXcon. "They come with questions. They'll get the specifics from the winery and then they'll come to us and say, 'This is what we are doing.' We'll look at the printing process they are going to utilize to get the graphics and the image that the winery wants, and then we'll recommend films and adhesives that will fit."

Once the supplier and the printer agree on a paper or film, a test is run and a sample roll is sent to the winery. The winemaker does an application line trial and puts the package through environmental testing to make sure that the inks are going to perform. Some wineries, Harris says, run their labeled bottles through climate tests to make sure that the adhesives will work in the presence of condensation. After the follow-up confirmation that the product selected will work, they move forward. "So there is a lot of discussion back and forth to get the right product," he concludes.

There are also legal parameters enforced by the federal Tax and Trade Bureau and the Bureau of Alcohol, Tobacco and Firearms (BATF). Hoydal adds that it's beneficial to have a designer or printer who is up to date on regulations because those laws can change year to year. If the label is sent to BATF and it gets rejected, the company has to resubmit the label, causing much lost time.

The benefits of flexography

Flexography has been making a big name for itself in the wine industry over the past decade. "For a long time we struggled with the entrenched old-school notion that flexo is just garbage and has no business being on bottled wine. Those mentalities are starting to shift. People are waking up to the possibility," says Gungner.

Hoydal adds, "There are little things you can do to your design type sizes, fonts, color choices, and trapping with offset. By taking advantage of what flexo can do with spot colors we can come up with really vibrant color. Typically, flexo presses tend to have more colors. It's a lot easier and more cost effective for us to do a lot of unusual varnish treatments. We have no problem matching or exceeding the quality of offset on clear material and glass. The top label printers in flexo who are doing wine labels do as good a job, if not better, than offset."

According to Bowyer, flexography used to be considered the poor man's method of printing. "Twenty years ago, the quality was not that good. But the equipment has come a long way, and most important, so has the prepress. The platemaking and the software has come along tremendously, which has really raised the quality."

"The obvious improvements in computer technology have added to the enhancements in the design that can be produced," says Steve Wilcox of Green Bay Packaging.

Despite these advancements, observers say that the old flexo stigma is still around. Converters continue to encounter difficulties from designers who do not understand flexo, and who do not design properly for it.

As in any industry there are going to be difficulties. But, ultimately, the growth and demand of the wine label industry looks promising to the wineries, converters, suppliers and consumers. Knopka agrees, "It's an extremely dynamic industry. There is lots of competition, quality is the name of the game, and with technological differentiation, you need to stay ahead and continually seek to provide your customer with solutions, so that they can meet demands in their marketplace."

New wine label study
to be published in 2005

AWA Alexander Watson Associates will publish an updated version of its Global Wine and Wine Label Market Study this year. The report will available in the fourth quarter. More information is available from:

AWA Alexander Watson Associates
7429 Seneca Ridge Drive
McLean VA 22102 USA
703 821 3853
Fax: 703 821 3854