In the competitive wine world, labels can make all the difference
Wine companies have a lot of demands. They must grow and secure grapes. They have to oversee a laborious winemaking process through bottling. Then they have to compete on the supermarket shelf with thousands of competitors.
But a key factor in a wine’s success is packaging, which can make or break a brand as evidenced by speakers Wednesday at the Wines & Vines Packaging Conference held at the Lincoln Theatre.
“You have a very crowded category,” said Steve Lamoureux, senior vice president of product innovation and design solutions at The Nielsen Co., a global information and measurement company based in New York. He noted that 3,600 new wines were introduced in 2015, representing 8 percent of the overall sector.
“There is a plethora of options for consumers,” Lamoureux said. “The vast majority of buyers are actually making a decision at the shelf. They aren’t just looking for a particular wine.”
The retail pressure on wine companies is tremendous. For example, a key difference between wine and beer is over media spending. In 2014, the wine industry spent $91 million on media advertising, but that was only 7 percent of the beer industry’s $1.3 billion, Nielsen found. That means that vintners are relying heavily on advertising at the shelf for their labels, which is especially precarious because wine consumers have less brand loyalty.
“That bottle is so important to that purchase,” Lamoureux said.
Even though the industry realizes the importance of label and bottle design, vintners lately have pulled back on their design spending even though there have been some blockbuster multi-million deals within the last year, said David Schuemann, owner and creative director of CF Napa Brand Design.He noted that the purchase price of The Prisoner Wine Company’s portfolio of brands from Huneeus Vintners to Constellation Brands, which included no hard assets, was approximately $285 million in April. The Prisoner wines ranked high in a Nielsen study last year for having a “fun” design among bottles marked $20 or more.; its label is based on an etching by the Spanish artist Francisco de Goya.
“In other words, (Constellation) paid millions and millions of dollars for a label design. So there is some real equity and value on that,” he said.
Schuemann’s firm worked on one recent successful campaign with the Slingshot wine label. The brand switched about five years ago from a traditional design with a little slingshot insignia at the top left of the label to a richer, more modern look. The new label features a shooting target bullseye with a hole that was die-cut through the paper, right under the vintage year.
“We didn’t show up in Nielsen data… We needed those big box stores,” said James Stewart of Stewart Cellars in Yountville, which makes Slingshot, in describing why they redesigned the label.
The design played a major role in its growth. During testing, people would pick up the bottle and rub a finger over the hole. That worked well for its target audience of more budget-minded consumers for a Napa Valley wine. The brand is a more accessible product, starting around $20 a bottle and featuring the tagline: “Irreverently Made in the Napa Valley.”
The gambit paid off, as Safeway picked up Slingshot a few months after the new label was unveiled. The brand also got into Total Wine and Whole Foods Market. Its production has gone from 4,000 cases annually to 20,000 cases since the switch, Stewart said.
“If a consumer is at a store and they’re curious enough to pick up a bottle, I’m already one step closer to being in the basket than anybody else on the shelf right now,” he said.