The unemployment rate in the United States hovered around 9 percent nearly every month in 2010. Consumers scaled back spending – as well as saving – and took fewer vacations. For everything economy-related, Democrats blamed Republicans and Republicans blamed Democrats. Yet there was one thing everyone could agree on: booze.
By the end of 2010, US consumers had increased their spending on alcohol by a handsome 10 percent. A divisive US Congress actually managed to come together and passed legislation that lowered taxes for small breweries (the Brewer’s Employment and Excise Relief, affectionately known as the BEER bill). Even in a horrendous economic climate, Americans have their priorities.
Europeans are no different. According to Health-EU, the public health branch of the European Union, Europe has the highest level of alcohol consumption per capita. And Asia may soon give it a run for its money. The Global Alcohol Policy Alliance stated back in 2001 that the alcohol market in Asia was primed to expand due to a young population and growing economy. It’s a safe bet that that’s still true today.
In addition to increased sales, the globalization of beer and spirits brands has greatly influenced the label industry. It has required beer and spirits brands to nail down their brand identity and ensure that everything about their brand’s look – down to the sheen on its label – is consistently and accurately replicated all over the globe. Brand identity and protection have become of paramount importance to brand owners, especially in regions where counterfeiting is rampant.
Globalization and brand protection
According to Kenneth Hirst, principal of Hirst Pacific Ltd., spirits brands “are seeking designs that appeal in multiple regions, both for a more unified identity and to be cost effective.
“Herradura Tequila is a good example of this. They wanted to unify their packaging and consumer identity by combining the round bottle sold in Mexico and the square bottle sold in the United States into one package line.”
In addition to keeping costs down, managing the identity of a product through labels and packaging can increase brand protection against counterfeiters.
“Counterfeiting has been going on a long time,” says Sarah Van Horn, manager of marketing & communications at SICPA, an ink manufacturer based in Lausanne, Switzerland. “It’s going on in a lot of different industries, but what’s happening is that it’s becoming more prevalent due to global distribution. The spirits that might be sold in one country are now being sold globally, and there’s demand for those products outside of where they are manufactured.”
An example of this, Van Horn says, is Bourbon. Historically made in Kentucky (in an area now known as Bourbon County), bourbon has increased its global popularity due, in part, to the appeal of a product that has been stamped Made in America.
According to Van Horn, as more American products are being sold overseas, the complexity of the supply chain drives the need for aggressive anti-counterfeiting measures on a global scale. Her company, she says, offers its customers several different approaches to the problem.
“SICPA can provide item-level identification across geographies for product tracking and tracing using standardized or proprietary systems,” she says.
“Supply chain visibility solutions, which employ high-speed coding and data capture, can provide manufacturers with data management systems from which to draw event-based information and other business intelligence about their products while securing them from adulteration and counterfeiting.”
According to Van Horn, there are two common types of counterfeiting: one that involves large volumes of a product, and one that involves the replication of high quality, high priced products. Once a problem faced mostly by high-end wine manufacturers, counterfeiting has, unfortunately, expanded its base to include spirits as well.
“I would say that many spirits are counterfeited, but in my experience, vodka, whiskey, and high-end wines are commonly targeted,” Van Horn says. “Stories of the seizure of these products are commonly noted in the press.”
And while counterfeit spirits hasn’t typically seen a problem within the United States, it appears that that is changing, too.
John McDowell, president of McDowell Label in Plano, TX, USA, has felt the effects of rapid globalization – and the need for increased brand protection in the US – firsthand.
“Domestically, there are greater controls for the manufacture and distribution of distilled spirits than there are internationally,” he says. “While the demand for security features has increased more for international brand owners, the demand as a whole both in the US and overseas has jumped exponentially.”
Van Horn says that customs seizure data indicates that China has consistently been the number one place for counterfeiting. However, the increase in globalization has caused counterfeiting to quickly move West.
“Now it’s moving its way through Europe and over here [to the US]. Since counterfeiting in the US has been much less than the rest of the world, companies here are trying to keep it that way. They’re being very proactive and taking care of it now so there is no problem.”
So what’s a company to do? Van Horn says that there are a wealth of high-tech, anti-counterfeiting tactics from which to choose.
“There are a lot of things you can do,” she says. “There are several security technologies that can be incorporated into the label or a tamper-evident seal. You can employ coding technology, whether it be visible or invisible, using covert markers. Multi-level authentication features can be used on packaging and labels, or as direct product marking.”
Additionally, she says, many of the technologies that are used for brand protection can also be used for marketing. Those technologies include coding and secure ink technologies, both of which have been used in the pharmaceutical and tobacco industries.
Technology and design
Besides the technologies used for brand protection, the competitive nature of the beer and spirits industries has granted converters use of the leading technologies in order to be the most aesthetically pleasing.
Dan Muenzer, vice president of marketing for Spear, a label converter based in Mason, OH, USA, says that there are significant differences in competition in the US compared to overseas.
“The US has about 300 million people, which is basically the size of Western Europe,” he says. “One in five beers sold in the US is a Bud Light. That’s one label for one beer. There’s a lot more creativity [overseas] in terms of trying to create a package that will help sell the product.”
According to McDowell, the spirits industry is growing with a proliferation of new brands, though the number of brand owners is decreasing due to both consolidation and the scale of private brands. As a result, brand owners are facing tough competition, and want consumers to feel connected – and eventually loyal – to their brand or brands.
“With this growth comes intense competition, thus, the need for innovative and sophisticated packaging,” he says.
“The sustainability or the lifecycle of a brand is often incumbent on its ability to incite an
emotional connection with its consumer. Specific to labels and shrink sleeves, the employment of sensory-stimulating tactile effects can enhance the graphic identity as well as actuate an experiential phenomena. What we see incorporated most effectively is the use of combination printing technologies on both labels and shrink sleeves.
“In fact, we are experiencing a dynamic surge of the implementation of combination printed shrink sleeves. Brand owners are foregoing the cost-prohibitive barriers and excessive lead times commonly associated with direct-etched glass for shrink sleeves, both frosted and clear. This allows them to reduce their inventory of dedicated glass and enjoy velocity to market with leading-trend SKUs, whether its based on new flavors, specific markets, events, seasons, and so forth.”
Charlie MacLean, president and CEO of ASL Print FX in Vaughan, ON, Canada, says the increased competition in the spirits industry has revived an interest in the various technologies that are available today for printing and packaging.
“In the liquor store, brands are very organized,” he says. “Marketers in all categories are looking to renew and invigorate their brands. Spirits manufacturers in particular are starting to look for specialty print capabilities such as effect varnishes, textures, and specialty inks & coatings.
“Spirits brands are also starting to transition to pressure sensitive materials, away from glue applied. Pressure sensitive offers the category an opportunity to differentiate brands with new decoration possibilities and efficiencies.”
MacLean also says that he has seen an increased interest in multi-panel labels.
“It gives the brand owner the opportunity to tell a story or to add recipes, or it might be cross-promotional,” he says. “And they are engineered to peel back and reseal easily, allowing for good consumer interaction.”
Stateside, Hirst adds that there is also the eco-friendly factor to consider, something that beer and spirits companies may not have considered years ago.
“Some new technologies and design elements used in spirits labels today are those appeal to sustainability and the idea of the ‘green’ consumer. Being eco-friendly both in the message you’re delivering as well as the materials used to deliver it is more important to consumers than before,” he says.
“UV ink is gaining in popularity because it eliminates the release of volatile organic compounds, which are increasingly restricted by government regulation. In many cases logos have gotten smaller and designs simplified to convey a fast and simple brand story while being as efficient at doing so as possible.”
“As for design,” McDowell says, “the pursuit to ‘out graphics’ your competition knows no bounds in the spirits industry.”
But what if you don’t have any competition? What if your product is the first of its kind, and you are able to set the bar for your future competitors by telling your own story? And what might happen if you chose to do everything – gasp! – hyper-local?
Adam von Gootkin and Peter Kowalczyk, co-founders of Onyx Spirits in Manchester, CT, USA, set out to answer those questions when they decided to produce the first moonshine available in Connecticut since Prohibition.
“The most important thing with the label,” says von Gootkin, “was implementing authenticity. We wanted to harken back to a time in New England when things were pure, more simple, and really well made.”
After sifting through more than 100 responses to an ad for a designer, von Gootkin and Kowalczyk chose Miladys Cruz-Fisher, principal and creative director of mCruz Dyzigns in Stratford, CT, USA. Cruz-Fisher worked with von Gootkin and Kowalczyk through several revisions (and a lot of research) before arriving at what von Gootkin calls “the living, breathing version of exactly what we had in our heads.”
According to Cruz-Fisher, the collaboration between designer and brand owner was the key to what they consider the label’s success.
“Graphic design has a great influence over the consumer purchase,” she says. “I think product manufacturers need to realize how effective a great design is over that purchase-making decision. Unless a consumer has previous knowledge of that product, the only thing the consumer has is that packaging.”
With the design squared away, von Gootkin and Kowalczyk set out to find the right printer. As it turned out, the right printer ended up finding them.
“I happened to see in the Hartford Courant that a local company was introducing a moonshine,” says Rod Milligan, vice president of sales at Label One, Deep River, CT. Seeing an opportunity for two local companies to work together, Milligan reached out to von Gootkin and Kowalczyk and it was quickly decided that Label One would be the company to print Onyx Moonshine labels.
Teamwork was again the key to success. Given the label’s complicated design, Cruz-Fisher and Label One’s graphics designer, Mark Sternberg, worked closely to ensure the finished product matched the original design. Milligan also chose to print on an HP Indigo press in order to meet the budgetary restrictions of a new company without losing the complicated shape or subtle metallic effects seen on the label.
“We used silver foil with a matte lamination, and it was a four-color process with white,” Milligan says.
Changes and Challenges
The cooperative nature that produced the Onyx moonshine label is at the heart of customer needs, says Karen Blumel, director of marketing at ASL Print FX.
“In the past, printers used to take orders, and that has really changed,” she says. “We are becoming more and more collaborative in order to help understand the objective and to add impact to the various technologies [available].”
As converters take on more responsibility throughout the label designing and printing process, they are faced with unique challenges. According to Hirst, a lot of that stems from innovations in technology and frequent changes in design trends.
“One challenge facing the converter industry is how these new innovations and technology affect the machinery and processes to put them in place,” he says. “Although great for design in the long run, sometimes the amount of time and money to get all new machines or source new production can outweigh the benefits of looking for another alternative.”
Hirst faced this challenge head-on when working with on the Herradura Tequila label.
“It mimicked a label-less look with clear label film,” he says. “The clear label option represents one way converters can achieve a new look without changing their machinery.”
MacLean, of ASL Print FX, believes that it’s not just the technology, but the seemingly limitless variety of materials that require a team effort from start to finish.
“Today, there seems to be an openness between the printer, designer and brand owner, to collaborate early in the process,” he says. “New effect varnishes, substrates, variable imaging, and so on – all of these capabilities are opening the door for new technology, and printers are starting to be recognized as an integral part of the brand team from concept to printing.”
According to McDowell, the choice of a substrate is of paramount importance, and can either make or break a label’s look entirely.
“Functionality is vital, thus, the use of either paper or film is a critical factor when identifying the desired demographic as well as vetting all the ‘fitness-for-use’ criteria,” he says. “It is critical that all elements of the packaging align with and support the brand’s positioning and essence.”
Sometimes a bottle’s literal positioning will determine the materials on which the label is printed. The competitive nature of beer and spirits sales in Europe, according to Muenzer, requires brand owners to chose more complex labels.
“We’ve had four or five products launched in Europe on iridescent film,” he says. “When those bottles are refrigerated behind the bar, that label really pops in the ‘fridge.”
According to MacLean, his company’s philosophy of partnership between converter, designer and printer has consistently yielded fantastic results.
“Every time we’ve collaborated and we’ve said ‘let’s look at the technology, not just the look, but the cost and waste associated with the process,’ we’ve wound up with an award-winning product.”
Beer and Spirits Labels
Alcohol: people drink it in good times and bad. Luckily for those in the label industry, the world has had its share of both lately. Here’s a look at design, shelf appeal and brand security in the world of beer and spirits labels.
By Catherine Diamond, Associate Editor
Published November 17, 2011