Beer labelling around the world

Dr William Llewellyn, vice president and senior consultant, AWA Alexander Watson Associates, provides a brief profile of the global marketplace for beer labels

Dr William Llewellyn AWA Alexander Watson Associates

Dr William Llewellyn, vice president and senior consultant, AWA Alexander Watson Associates, provides a brief profile of the global marketplace for beer labels

Change is a constant in the global beer market today, as a result of mergers and acquisitions, the rise of micro-breweries, legislation, but also, significantly, trends in beer packaging and labelling. This is a manufacturing segment which displays marked differences in profile across the world’s geographic regions, in terms of both beer type and packaging preferences (as well as the need to take account of local language content on labels), and demonstrates very precisely the complexity of operating in a multinational marketplace.

Volume growth

Our AWA researches lead us to estimate that, in the medium term, global beer production will grow in value terms at an annualised rate of 2.4%.  Dominated by multinational brewing groups with a multiplicity of brands, it is a buyer’s market for packaging and labels.  Containing and reducing the price of packaging is a key issue for brewers, since packaging represents a swingeing 28% of total production costs.   Packaging, however, is also a key sales tool, and one which beer producers around the world are keen to exploit with the variety of packaging, and particularly labelling, choices available today.

While we estimate that over 60% of all beers, globally, are still packaged in bottles, the profile of beer packaging changes quite dramatically by geographic region, presenting a variety of challenges and opportunities for decorating the product.

The regional choices

Europe’s market evidences the highest proportion of beer sold on draught – over 16% -- which mitigates altogether against any brand packaging.   This figure includes consumer-sized kegs fitted with dispensers for domestic consumption.   Compare that to Africa and the Middle East, where 85% of production comes in glass bottles and only 3% on draught, or North America, where only 7.7% is supplied on draught.   Here, the most-favoured packaging format is cans, which claim over 46% of the market.   Cans are also popular in South America, particularly Brazil, and are currently also attracting interest in the key growth markets for beer, China and Eastern Europe.   Overall, cans represent around 24% of total beer production volumes globally, offering consumer convenience, as well as total barrier qualities in terms of light and oxygen and better carbonation preservation.  They are usually direct printed, and do not usually feature an applied ‘label’ per se.

The printed label

Labelled bottles, both glass and plastic, are the most-widely encountered form of decorated beer packaging today.   In terms of labelling technology, the old-established wet glue-applied label dominates globally, representing some 2850 million square metres of labels in 2012.   Next most popular are pressure-sensitive labels,  at 227 million square metres in 2012.   Of the newer label technologies, wraparound glue-applied labels are only seen in the established markets of North America, Europe, and Asia, and heat-shrink sleeve labels are just ‘beginners’ in the whole beer market.

Printed paper labels, wet glue applied, remain the mainstay of the global beer label industry.   High wet strength one-side-coated papers are the first choice, but vacuum metallised qualities that bring the metallic ‘sparkle’ to a label is part of the brand signature of many beers, and a more cost-effective solution than solid foils.

Plastic films for the pressure-sensitive and sleeve label technologies are gaining prominence, not only for their functional water-resistant qualities, but also for their graphic possibilities – including the ‘no label look’ achievable with transparent pressure-sensitive films on transparent glass and plastic bottles. 

Today’s roll-fed and sheet-fed printing technologies can ably cope with the volume requirements of beers;  and, for micro breweries, ‘special occasion’ brews, and personalisation, the new digital label presses are a verstaile and cost-effective solution.  

The beer bottle

An estimated 200 billion units of glass bottles were sold in 2012 for the packaging of alcoholic beverages – 74% for beers, 11% for wines, and the balance for spirits and FABs, both single-use and returnable/refillable.   This is the ‘classic’ market for beer labels.

PET or plastic bottles in a variety of sizes also feature in the beer market, representing around 4% of global volumes.    Most widely seen in eastern Europe today, they are also gaining popularity in areas such as India where they overcome problems of glass bottle shortages and the higher price of cans.   Plastic bottles may also be labelled using the traditional technologies, and additionally with the use of plastic wraparound sleeve labels – a halfway house between glue-applied and pressure-sensitive formats, glued only at the seam.

Brand image – a key factor

As the profile of the beer drinker changes, the importance of high-quality label graphics is increasing.    New brands and sub-brands aimed at different consumer sectors (eg younger drinkers, women) or seasonal brews, require real differentiation – and the key here must be the packaging and, particularly, the label.   AB InBev estimate that 7% of their 2012 volume growth was attributable to packaging innovation – not only in terms of cost control and reduced weight/volume/waste, but also as a key sales tool.   While protecting the container’s contents must be the prime role of beer packaging, it is the consumer’s first physical connection with the product, and its label has a key role to play in conveying the nature of packaging’s contents. 

A wide choice for the buyer

The packaging print market is well-placed to meet brewers’ needs for innovative labelling and for direct print on to cans, cartons, and other new packaging formats, but the packaging buyer’s choice must be tempered by a knowledge of the preferences of the targeted local geographical markets;   by the cost base of the product concerned (and thus that of its packaging);  and, of course, by the additional need to comply with legislative requirements on functional data, barcodes, etc, on a label – which vary around the world.  

With today’s increasing focus on sustainability and recyclability issues, AWA has seen that packaging print is innovating today across a broader arena than ever before – ready to become active partners for beer producers around the world.

AWA Alexander Watson Associates have recently published the third edition of the in-depth market research report, Global Beer Label Market Study 2013.   Full details are available via the AWA website, www.awa-bv.com, where it is also possible to order the study online.

 

 

4 February 2014