SPECIAL REPORT: Labels that differentiate

From craft beer label materials to the no-label look, today’s label options are endless. Hugh Lenz explains how labels can help drinks get noticed and sold

For beverage consumer packaged goods companies, competition at the shelf for consumer attention has never been fiercer. The emergence of store brands, regional brands, versioning, and customisation, to name just a few, combined with the sheer growth in the number of products vying for attention, are driving brand owners and packaging designers to pursue new directions in label and package design that create a premium, differentiated look, engage consumers and motivate purchase. Fortunately, next-generation pressure-sensitive products and technologies can help beverages get noticed and sold by creating labels and packaging tailored to the demands of a changing public.

Benefits of pressure-sensitive labels
No matter the market, pressure-sensitive labelling is gaining in popularity. According to The Freedonia Group in its Labels to 2015 study, pressure-sensitive is the material of choice for more than 70% of labelled products, a demand said to rise 5.2% annually. In the US, label demand will reach US$19 billion in 2017 according to a 2013 MarketWatch release, with the pressure-sensitive segment accounting for more than 75% of the total market.

The continued appeal of pressure-sensitive label decoration can be attributed to its versatility in delivering high-impact shelf appeal, improved operational benefits versus other decorating technologies, flexibility for late stage product differentiation and its effectiveness in dealing with SKU complexity due to easy and efficient label changeovers on the application line.

So what’s creating this growth? Aesthetic and performance factors from evolving pressure-sensitive technologies are driving label trends that dovetail with consumer demands.

Consumers have become increasingly savvy, with a growing appreciation of and demand for packaging aesthetics. Product shelf appeal is a must have and consumer packaged goods worldwide are finding shelf power equates to brand power.

A large portion of shelf power, however, is the ability to create consumer trust by making packaging transparent. The no-label look created by clear pressure-sensitive film materials allows consumers to see exactly what they’re buying, increasing consumer confidence and trust.

The new Avery Dennison adhesive portfolio ClearCut, for example, provides best-in-class clarity, non-water whitening and wet out performance, making it valuable for beverage converters. It also enables further downgauging of filmic facestocks and liner systems, delivering sustainability benefits by reducing overall material consumption while improving manufacturing efficiencies through fewer roll changes on application lines.

Consumer interactivity
The need to succeed at shelf is encouraging packaging designers to innovate materials. And many are combining technological innovations with interactivity to attract consumer attention. For instance: thermochromatic inks on packaging are now telling consumers whether the beer they’re buying is cold inside; and electroluminescent labels, along with a graphic equalizer display, are allowing packaging to light up

As technology becomes ever present in consumers’ lives, people are embracing and expecting tech enhanced experiences everywhere—including in labelling and packaging. Smart packaging is such an innovation. One of its most promising areas is near field communications (NFC). NFC can deliver information directly from a brands package to a consumers NFC enabled smartphone. The technology can link to almost any kind of digital content -- such as a website, coupon, survey, or video/music stream -- all without the inconvenience of downloading an app. 

NFC is changing the ways brands interact with consumers by facilitating the building of relationships through direct consumer engagement. By 2018, shipments of NFC enabled smartphones are expected to reach 1.2 billion. Beverage is a key target area for this new technology.

To help brand owners capitalise on NFC, Avery Dennison is offering labelling products with NFC capability, which is being used by wine and spirits companies to combat brand counterfeiting, create provenance and participate in direct-to-consumer marketing.

Differentiation in wine labels
Due to the enormous brand proliferation in the wine segment, designers are increasing embellishment to differentiate products on shelf. Papers that combine a rough, porous surface with a rich tactile feel are being used as a canvas for such techniques as deep embossing and foil stamping. The increased need for paper performance is also leading to greater demand for higher bases weight papers with enhanced wet strength while the desire to standout on shelf is driving the trend in the increased use of bright white, uncoated facestocks.

For white and sparkling wine label materials, the challenge of condensation and exposure of labelled bottles to cold and wet environments in ice buckets and cold boxes is impacting film and paper choices. Here facestocks are being combined with wet-strength additives, under-laminates and unique adhesives to provide the necessary performance.

Increasing brand owner demand for application specific solutions is also sparking growth in specialty papers. From fluorescents and holographics to dissolvables and natural kraft papers, these materials are proving extremely successful for many distinct looks in the beverage market.

The rise of the Millennial demographic is definitely impacting beverage label trends. With individual segments once dominated by either male or female audiences, today’s beverage reality sees the blurring of genders when it comes to shopping decisions. 

The beer market
Nowhere is this more evident than in the craft beer label segment, which grew 18% by volume in 2014 and 22% by retail dollars, reaching an impressive US$19.6 billion in overall North American sales. In this area, papers that reflect an artisan vibe are gaining in popularity. Beer bottle label materials are now incorporating uncoated papers which are being used to convey the unique craftsma

nship of locally sourced and/or produced beers. Wood veneer facestocks, pioneered originally in wine, are also go-to choices to showcase the market trend to barrel aging and flavour extensions.

Other packaging trends in craft beer include a move to 22-ounce and 750ml glass packaging, as well as 12- and 16-ounce cans, increasing the portability and market penetration of local brews. While earlier generations might view canned beer as “de classe”, today’s Millennials can’t be bothered with such an attitude, a reality that is having an increasingly powerful impact on the marketplace due to one simple fact: In the next 5-10 years, Millennials will represent nearly half of the beer and spirits consumers.

Sustainability
Concurrent with the growing importance of the Millennial demographic is the growing focus on what they champion: economic and environmental sustainability. Increasingly, sustainability is becoming a consumption driver, particularly in the area of wine label materials. Forest Stewardship Council-certified (FSC) label papers are becoming the industry standard.

North American consumers are becoming more adventurous in terms of new flavours and are willing to try out new brands if the brand can show differentiation and added value. Next-generation pressure-sensitive labels products and technologies can help beverage companies get their products noticed and sold by creating innovative labels and packaging that dovetail with the societal trends and consumer related drivers of a changing public.

28 April 2015 - Hugh Lenz Avery Dennison, business development manager - beer & beverage