Bottoms Up

Beverage labeling is hot, or maybe cold, but either way it represents one of the real dynamic segments in package printing.

If a labeling method or configuration exists, you’ll find it on a beverage container somewhere. Whether it’s pressure-sensitive, shrink-wrap, cut-and-stack, wraparound, glue-applied, thermal, or even the package itself in the form of a pouch, you’ll find it being used to help sell a liquid refreshment of some type.

What makes beverage labeling so robust? Nick Van Alstine, president of Macaran Printed Products says the reason is simple. “Beverages are really high-profile. They’re a part of our everyday life, and visible pretty much everywhere we go. There may be no better example of the product that sits on the shelf screaming for our attention. The label has to be in fashion, and like fashion, a new and trendy look becomes part of the landscape.”

It’s not just the label that is in fashion, but sometimes the whole product category. Remember when people used to drink water out of a water fountain? Most water fountains you’ll find today are gathering cob webs right next to pay phones. It’s sometimes amazing to look around in a crowd and see the number of people with a water bottle at the ready. If Charles Schulz was creating his “Peanuts” comic strip today, he’d probably give Linus a water bottle.

And athletes don’t drink water … it has to be Gatorade, Powerade, or some other sports drink.

Trends with staying power

Although the popular use of bottled water and sports drinks might qualify as trends, they have a lot of staying power. To go along with this longevity, they are generating huge revenues for companies in the beverage market segment, and are largely contributing to the excitement being generated by the category.

Gary Hemphill, managing director for the research and con­sulting firm Beverage Marketing Corp., notes the impact that these trends are having in the beverage segment. “We’re seeing growth in a wide array of niche categories like bottled water, enhanced waters, sports drinks, energy drinks, teas, and others that are driving the demand for liquid refreshment.”

Another growing niche noted by Scott Pillsbury, president of Rose City Label Company, can be seen in the wine industry. “Wine labels are very personal to small wineries. In the northwest, many small owner-operators produce wine because they love it—almost as a hobby—rather than a full time profession. Because of this, they are very personally tied to the image and the label—often with their family name on it … The changing tastes of the market, together with improved technology, have allowed very small batch beer and wine makers to compete in the market like never before. This increases the need for custom labels, with small runs.”

These niche categories, however, just put a big exclamation point on an already exciting market. John McDowell, VP of sales for McDowell Label and Screen Printing, points out the key reason for the well-deserved attention this category receives. “The beverage market is dynamic because it is so vast—comprised of wine, spirits, beer, energy drinks, soft drinks, specialty coffees/teas, nutritional drinks, and water.”

With any market that holds so much potential, the competition is fierce and this is generating much of the opportunity that beverage labeling offers for package printers. “The true dynamic is how it’s constantly reinventing itself, largely through better packaging,” says McDowell. “Yes, brand owners are constantly introducing new extensions to their offerings, but the majority of brands that are successful at diversifying are accomplishing the goal with more effective product decoration.”

Because of the market’s vast size and diversity, it requires a wide range of package sizes and labels designed to appeal to varying consumer preferences, notes Hemphill. “Packaging is important in the beverage industry because so many purchases are based on impulse, and the package itself is often the last chance to sell the consumer on a particular product.”

The importance of packaging and labeling in the product sales equation has grown over time and has been especially evident in beverage marketing. “The fast-changing beverage arena has evolved from mass standardization in the 1980s and ’90s to brand customization in the 21st century,” says Dan Muenzer, VP of marketing for Spear. “Each beverage brand is being positioned as its own entity, so its positioning is less dependent upon advertising and POS [point of sale] and more on the package. Label techniques are often the most economical way to differentiate a brand without having to go through the time and money of a structure change.”

The drive to differentiate has put a special emphasis on label graphics. “Most of the changes we have seen with brand owners over the past five years have been in the realm of constantly creating a more graphic-intensive package—this, of course, falls right in the middle of our niche,” says McDowell.

Spear has also experienced this heightened focus on graphics. “Beverage labels are no longer product describers; they are part of the package,” says Muenzer. “Graphically, they have become far more complex over the past five years with multiple substrates, shapes, and print/graphic methods.”

Special needs

One requirement emphasized by these beverage label printers is the need to withstand both temperature extremes and moisture, not only in production, but in end use. “Depending upon the point of application, beverage labels need to be able to function with wet bottles, pasteurization, hot-fill, retort, caustic wash, refrigeration, and ice-chests,” says Muenzer.

The focus on adhesive requirements is common in beverage label applications. One example of a specific application is spelled out by McDowell. “Labels used for premium beverages—such as white wines and champagnes—can require the use of specific adhesives and facestocks that enable a brand owner to label wet bottles,” he says. “One phenomenon in the bottling production of white wines is that they are often filled at 40°F and immediately labeled. When the beverages are filled at these chilled temperatures, the bottles become covered with moisture. Implementing these provisionary adhesives/materials provides the brand owner the greatest amount of bottling productivity without compromising the aesthetic value of the brand’s shelf appearance/positioning.”

The importance of adhesive functionality throughout a product’s life cycle can be seen in the following example provided by Muenzer. He says that Spear has introduced a new pressure-sensitive label construction for the returnable beverage market. “This label looks exactly like traditional pressure-sensitive labels, yet it washes off the bottles during the caustic cleaning cycle. It is processed with the existing paper labels and does not require any modifications to industry-standard washing systems.”

From a quality perspective, a general observation is that the beverage market has an expectation that is in line with other consumer markets. Says Van Alstine, “In my experience, I have not seen where the beverage market is any more or less stringent on quality than other markets. Certainly, they do not appear to be as critical as the health and beauty market.”

This does not imply that quality is not important in this highly competitive market. These days, high-quality label printing is a given.

“If quality is not a part of your culture, it will never be realized in the finished product, regardless of the level of printing sophistication,” emphasizes McDowell. “The beverage market is no different than any other graphic- or package-driven consumer-goods category; quality controls have to be established in every step and procedure of the production cycle.”

Label methods

While all methods are used in beverage labeling, there is a general consensus that pressure-sensitive and shrink labels are growing, while cut-and-stack is experiencing a steady decline. However, while visiting an Italian winery earlier this year, Pillsbury was told that cut-and-stack labels were being used because pressure-sensitive roll labels wrinkled on the bottle. “I think this is the exception rather than the rule,” he says. “We see pressure-sensitive roll labels as the dominant format, especially in the markets we serve.”

Because of the wide range of beverage applications, label converters must decide on the breadth of products they want to supply their customers.

Spear takes the approach of being singularly focused on pressure-sensitive labels. “We believe it is best to operate as the industry leader in a very specific segment that provides global opportunities,” says Muenzer. “We do one thing, and we do it better than anyone: pressure-sensitive labels for the beverage industry. Our efforts don’t end with printing and selling a label; they begin there. Our entire ‘single’ product is built around a turnkey cradle-to-grave approach that includes the design community, material supply chain partners, beverage-filling line manufacturers, container suppliers, and recycling entities of this one product.”

At Macaran, Van Alstine believes it is “very important to be able to provide your key customers with the method of labeling that best fits their needs. A lot of time and hard work go into building a true supplier/client partnership relationship and there is a cost incurred on both sides if that relationship has to end. Our goal is to grow and adapt to our customers’ needs where it makes good sense for both of us. That being said, the vast majority of beverage applications we are involved with are pressure sensitive.”

McDowell Label has adopted a similar philosophy. “It is very important that we provide multiple product decorating methods for our customers,” says McDowell. “Many of them package their products differently for various retail venues, and our ability to provide them the trust of managing the integrity of their brand’s awareness/identity on each level is a critical component in leveraging our customer relationships. One of our beverage customers, for example, uses graphic-intensive, combination-printed labels on an ultra-clear label stock for the majority of its product decoration. However, on its smaller travel and sample sizes, it uses a heat shrink sleeve that clearly identifies the brand with the consumer.”

These companies present a range of business models that have met with success. Good companies are good at what they do, and are not necessarily all things to all customers. In the beverage market, there are a lot of opportunities for good label suppliers. pP