The industry’s expansion signals a shift from just a few years ago. According to an AWA Alexander Watson Associates report, the world’s four largest beer companies controlled 43% of the market in 2013. In 2015, however, the competition extends beyond Anheuser-Busch InBev, SABMiller, Heineken International and the Carlsberg Group.
The Demeter Group’s “State of the Craft Beer Industry 2013” claims that craft beers are expected to surpass 15% of the entire beer market in 2020 at the current growth rates. According to Laura Clark, global marketing director, beer and beverage, Avery Dennison, 2014 was a banner year for the beer industry. Craft brewing grew 18% in volume and 22% in retail. In addition, there are 615 craft breweries in the planning phase.
“There is a $50 million space for label sales across the premium pilsner and craft beer markets,” explains Clark. “Craft beer is growing strongly, and off-premises sales in craft are growing rapidly.”
“The beer market is exploding now,” says Scott Proctor, VP of sales at Lightning Labels. “Almost every city in America has at least one microbrewery. While Colorado is a top state for craft brewing, activity appears to be growing nationwide. Orders are coming in from northern California, Massachusetts, Minnesota, Arizona, New Hampshire and more. As consumers increasingly look for unique niche products not associated with big-box brands and stores, craft brewing is becoming an ever-more-healthy market, whose momentum is likely to stay high for some time to come. The beer label market will continue to benefit from that momentum.”
The label industry’s technological advancements have made it possible for many of the smaller craft brands to thrive. The evolution of digital printing and pressure sensitive labeling materials have provided cost-effective options for shorter runs.
“The beer label market is an exciting one,” says Trevor Richardson, market development manager, UPM Raflatac. “The significant expansion of craft breweries opening throughout North America is an exciting trend. The fact that pressure sensitive labels fit so well, from entry level to large production scale decoration, is extremely motivating to the print industry.”
AWA’s “Global Beer Label Market Study 2013” states that labels used as a form of product decoration for beer bottles accounted for 3,292 million square meters in 2012. As more beer brands are emerging within the market, consumers also happen to be drinking more beer. AWA forecasts that beer production will grow at an annual rate of 2.4%, and by 2017, global label volumes will increase to roughly 3,850 million square meters.
Miller Lite has utilized modern materials to give its white bottle and can a different kind of look. “They’ve decided to use the label and the package in a retro way,” explains Dan Muenzer, VP of marketing at Constantia Flexibles. “They’re actually using it to reposition the brand, and it’s been successful. They’ve seen that the label is a marketing vehicle, and in this case, the vehicle that they’re using is nostalgia.”
With so many beers available to the public, many consumers are making their choice based solely on the label. The research group Mintel discovered that 66% of craft beer drinkers claimed that the look and style of the beer bottle was as important as any other factor. In addition, 70% of those surveyed said that the brand of beer one chooses says a lot about his or her personality.
“With the vast array of options on the shelf today, designers are looking for ways to draw attention and differentiate,” explains Jackie Kuehlmann, marketing manager at Inland (formerly Inland Label). “Some are doing this by designing to the substrate. We see some really stunning labels on metalized paper, where the designer has taken full advantage of the metalized substrate. There are so many options today to enhance your label that designers can really have a lot of fun.”
In order to create more attractive labels, there are several current trends in beer label design. According to Tricia Sime, Inland’s director of Packaging Innovation, brands are contrasting gloss levels on the label, using tactile finishes that include suede and raised emboss, and choosing interactive smart labels that use multi-functional and color-changing inks. As in many other areas of the label industry, other trends include driving down price and increasing speed to market. This must occur in tandem with creating a product that pops on the shelf and creates brand identity.
“There are just some stellar beer graphics going on right now,” adds Muenzer. “They’re really pushing the envelope in terms of some of the looks and textures like metallic and mattes. So that segment of the beer industry has really changed.”
UPM Raflatac offers Vanish, a thin clear film, to provide a no-label look. This product line is a range of clear PET films that features a 0.92 mil facestock.
Lightning Labels, the all-digital converter, has access to over 20 presses with CMYK printing. The company’s most popular material is white BOPP, which can be finished with a high gloss overlaminate to produce sharp colors or a matte overlaminate for a more subdued appearance. A chrome BOPP with an added white can also be used to provide a metallic look.
“Customers are looking for designs and approaches that are eye-catching, creative and fun,” says Proctor. “Uniqueness is quite important, and many use the chrome material and white ink combination to achieve this.”
“From a design perspective, we are seeing a lot of hand-crafted looking labels, using the craft substrates. But a lot of designers are able to achieve this hand-crafted look with graphics on white paper, as well,” says Kuehlmann. “Hand written fonts add to the handmade look, and when combined with a technology we call shingle collation, brands can literally have batch numbers on their labels just as if each bottle were hand numbered.”
The beer market is another space that can benefit from smart technology, as well. Through RFID and NFC technology, smartphone users can access content from beer brands, especially in the craft segment, looking to tell a story. “It is incredible how smart technology can be used in marketing for beer labels,” adds UPM Raflatac’s Richardson. “The craft industry is in essence selling the experience – how the beer is made, where it is made, the story of the brewery or the sourcing of materials. Having smart technology create consumer interactivity – especially when linked with social media – is a powerful way to promote, capture and keep consumers.”
Short runs aided by digital
Digital, short run printing technology has largely aided craft beers in their quest for shelf space. Through digital printing, converters can print as few as one label, which saves time and money typically allotted to platemaking in flexographic printing. Even though flexo still dominates the market, Smithers Pira reports that the demand for digitally produced material will increase 375% by 2018.
“Digital certainly has made an impact on the beer label market, but as with most things, it has its niche,” explains Kuehlmann. “Digital has enabled smaller, start-up breweries to have labeled containers that otherwise would likely be unable to afford print minimums. It has also increased the use of variable graphics in this space, although some of that is achievable with other print processes.”
Clark states that digital’s impact can also be felt when finishing the label. A craft brewer can differentiate its brand by using creative diecutting options that are beneficial in digital printing. Avery Dennison has also developed an expanded 2015 Craft Beer portfolio. The update features five new label constructions, including a royal white and matte litho wet-strength construction. In total, the portfolio has 18 constructions that are designed to provide a distinctive look on the shelf.
Digital has benefits beyond affordable short run printing. Beer companies both big and small are increasingly marketing seasonal beers. “Digital and variable printing fits the creativity of the craft brewer to a T,” explains Richardson. “Pressure sensitive labels and digital print technology allow the brewery incredible flexibility to fit the creativity that we are seeing in craft beer. A large number of ingredients and techniques are being used in creating seasonal or unique batches of beer, and digital printing fits this area very well.”
According to Proctor at Lightning Labels, beer makers have other needs beyond branding. The ability to adapt quickly to changing appearances and quick turnarounds are both needs that can be supported by digital printing. With short runs, having access to experienced customer support and printer counsel can help with problem solving.
“Craft brewers are constantly reacting to the market’s tastes and to the brewmaster’s whims,” explains Proctor. “Being able to affordably purchase labels digitally helps keep them competitive and timely. With a typical turnaround time on custom labels and stickers of three business days after proof approval, emergent events dictating a fast change can be handled, as well as dealing with upcoming holidays, seasonal events/markers and the like. Even almost literally at the last minute, labels and stickers promoting such mainstays as St. Patrick’s Day can be produced.”
In addition to seasonal beers, special occasions like weddings, sporting events and beer festivals may also necessitate custom labels.
The pressure sensitive advantage
While wet glue applied labels still account for the lion’s share of the market, pressure sensitive is gaining ground. AWA’s report states that the North American market makes up the largest share of pressure sensitive label usage. In North America, 32% of the labels are pressure sensitive, compared to 62% in wet glue applied labels. In Asia, the world’s fastest growing beer label market at 4% CAGR, wet glue applied labels account for 94% of the label demand.
“We definitely see a continued transition to pressure sensitive for lots of reasons,” says Muenzer. “One, just graphically, you can do so much more, and two, from an efficiency standpoint, it’s just a more efficient labeling method. Ultimately, it’s a lower cost.”
According to Avery Dennison, pressure sensitive labeling offers several advantages, including faster changeovers, minimized waste and reduced clean-up. The label’s flexibility can also accommodate multiple shapes, designs and sizes, which is especially useful for short runs.
“With the drive toward premiumization, brands are using touch-and-feel to engage consumers,” says Clark. “This includes stamping and embossing. Pressure sensitive labels enable greater flexibility in design and label shape.”
Avery Dennison’s pressure sensitive Fasson labeling portfolio includes multiple substrates and adhesives. The company’s Z3338 and Z3300 adhesives are designed to perform in heavy condensation, and they are ice bucket and cold box tested. Clear-on-clear films, metalized papers and films, glossy white materials, laminated foils and traditional uncoated papers are all substrates available in Avery Dennison’s portfolio.
“For the premium pilsner category, we offer the Prime Film portfolio that features ClearCut, label and adhesive technology. ClearCut is designed for speed, reliability and low contamination levels,” says Clark. “It ensures exceptional adhesive wet-out and water whitening resistance, which make it a great choice for the clear-on-clear no-label look.”
Avery Dennison also offers the S7400 adhesive, which is designed specifically for the beer market. Fasson AT20 is another adhesive that allows for peeling and relabeling, and the S-100R adhesive allows labels to be washed off at 100 degrees F, allowing reuse of the bottles.
UPM Raflatac also provides Silvervac WSA (wet strength), a pressure sensitive metalized paper that resists moisture and exposure to an ice chest. According to the company, the labels will remain intact for over 24 hours after being placed into wet conditions like an icy bath. These labels pass a 48-hour ice bucket test and offer an alternative to screen printing. Silvervac WSA uses RP51 permanent adhesive for beer bottle labeling. “Standard metalized papers will degrade in heavy moisture exposure,” explains Richardson. “All of the effort that goes into creative brewing and branding can now be pristine in the ice chest at the consumer level. We feel that having your brand stand out throughout the manufacturing process, retail shelf and the consumer use enhances brand image and extends the opportunity for brand loyalty and future purchases.”
Coors Light goes Inland for beer labels
Innovative packaging designs are not just limited to craft breweries looking to make a name for themselves. MillerCoors, one of the largest beer companies in America, has been a longtime partner with Inland, a family owned and operated label converter. When North American beer sales dropped, MillerCoors feared that consumers were bored with the product and sought more “unique and inspiring” brands. MillerCoors approached Inland with creating an outside-the-box solution for its flagship brand, Coors Light.
With the help of a focus group and a Coors Light marketing team, Inland developed a solution to replace Coors Light’s square cut label. The new Coors Light Super Cold label featured thermochromic inks that would change color as the temperature deviated. When the beer is deemed at the optimal drinking temperature, the white mountains on the label transform to blue to highlight the brand’s attributes.
“This smart label technology visually indicates when the beer is at the optimum temperature for enjoyment – yet another way to communicate ‘cold enjoyment’ to the consumer,” explains Inland’s Sime. “Today, the availability of printed electronics and other leading edge technologies are redefining the limits of smart labels. Smart labels can use a myriad of technologies to provide real time information about location, temperature, movement and even authenticity.”
The beer label market is a significant aspect of Inland’s operations. According to Kuehlmann, the company conducts 50% of its business in this space. Inland offers offset, gravure, flexo and digital print technologies when printing its labels. “Beer has always been an important part of our business and continues to be a growth area for us,” adds Kuehlmann. “We continue to invest in technology and equipment to support beer label production.”