2016 Package Price For Value Season At Art Of Animation Is the Wine Industry Ready for New Label Technology?

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Is the Wine Industry Ready for New Label Technology?

Many in the wine industry talk about the new things in label design that are revolutionizing the industry. These are people who point out that there are new label papers, foil applications, embossing techniques, tight sleeves, colors and scannable (QR) labels. Yes, there are some nice new looks for wine labels. But a new approach that will capture the imagination uses fascinating technology, combines captivating colors and has proven research that shows customers are impulsively compelled to pick up and handle the product on which the label appears. When was the last wine label you saw that you could try?

This new label product being promoted in the wine industry is a hologram. Holograms have been on the market since the mid-70s National Geographic magazine featured a small holographic image of an eagle on the cover of a monthly issue. I looked at it and was amazed that you could see the side of the eagle and then the opposite side just by turning the magazine cover.

I was a marketing manager for a company in Manhattan and was so intrigued by the holographic image that I wanted to use it in our consumer brochures. The main drawback was the price of the holographic image; approximately $2.00 each. Today, hologram labels can be made, in volume, for as little as $0.05 each, 1 x 1 inch. Pre-production/setup costs would be approximately $2,500. A front label for wine can cost approximately $0.74 each for a 4 x 3 inch size.

“Actual costs depend on how sophisticated the final image needs to be to get the desired visual effect,” says Mr. Alec Jeong, General Sales Manager at Integraf, a supplier of holographic labels. “For a high-quality hologram, pre-production can start as low as $1,000 for something as simple as a logo or as high as $8,000 for a stunning display that combines 3-D depth, animation and stunning reflections.”

What makes holograms so interesting? Holography is a photographic technique that records light scattered by an object, and then presents it in a way that appears three-dimensional. In the 70s, for the object to be displayed in 3-D, the model had to be the actual size of the image to be generated on a special paper using lasers.

New techniques now allow 3-D images to be generated using computer graphics modeling that can be applied to laser-type images to generate 3-D effects.

What makes the application of 3-D holographic labels so interesting for the wine industry?

· Holographic images produce a 3-D effect that draws the consumer’s attention when browsing the wine racks. Applications can be adapted for vertical or horizontal bottle displays.

· Manufacturing a 3-D label today is cost effective.

· Holograms can be used to combat counterfeiting of some wines.

· Holographic images can be adapted to many marketing requirements – branding, neck hangars and attention grabbers for customers walking past in an aisle. For example, some holograms can be produced that will produce a burst of light as you walk past a hologram tag.

· The entire label does not need to be made as a hologram.

· These labels speak to the tech-savvy millennial generation. This demographic represents over 60% of the wine market and is driving wine sales growth.

Ms. Toni Hamilton, Marketing Director at ASL Print FX, has put together some guidelines for effective wine labels. Do the holograms match her instructions? She asks, for example, on a store shelf, will the label attract attention in 3 seconds? Some research already done by Integra shows that holographic images perform well. Will a holographic image reflect the wine, winery and target market? Each demographic responds to messages and the format of sending a message differently. Research and testing will be the judge; more on market applications follow. Lastly, across almost all market demographics, labels should be fun, can have humor, use unique graphics, and can be somewhat quirky.

A label design firm in Napa said there are exceptions to most of the rules about good label images on labels, but they are passable.

We know that wine labels are/can be: art, informative (partly by law), entertaining and used to influence consumer action. Below are some thoughts about a wine label’s interaction with the consumer.

As consumers, do you think we are immune to manipulative marketing tactics; we’re too smart for that trick, aren’t we? But we shouldn’t be defensive about wine marketing tactics because the label can give us a lot of information (not just legal) about the brand choices available to us. Labels create lasting loyalty, stimulate new wine trials, drive enjoyment/expectations (mental expectations of psychology) and allow us to connect with the creators of some of our favorite wines/wineries and producers. Combined with the internet, we can now be more educated about our wine purchases and become educated brand evangelists for great cheap and expensive wines.

The life and value of a wine label is based on research and testing. And research shows: “The more the consumer likes the label, the more they like the wine.” At least this is according to Mr. David Schuemann, Owner of CF Napa Brand Design, a top-rated design and marketing label firm in wine country.

David Ogilvy, an icon of the advertising industry, had many quotes about using visuals to sell products. One thing I appreciate that can be applied to holographic wine labels, “If you grab your attention in the first frame (applying to TV commercials) with a visual surprise, you have a better chance of keeping the viewer . People watch ads a lot because they open with something boring.” “On average, five times more people read the headline than read the body copy.”

In addition to advertising (print, TV, direct response), the wine industry in general has one key marketing tool in its bag of tricks to reach the consumer and motivate the consumer to that first try: the label is a key tool in bag. The label cannot bring and perpetuate a bad brand, product or image to success. But, it will encourage a trial and then a repeat customer.

Summer Business Monthly reported, in the Hispanic market 70% of the wine purchase decision is related to price, recommendations make up 40% and label design represents 14% of the purchase decision. Of course, there is a lot of overlap between the categories, but the relative importance of wine labels is enough to make it important in selling wine. If household referrals came about as a result of a tag-initiated trial and follow-up recommendation, tags can impact sales by nearly 30% of trials and repurchases.

Mr. Kyle Swartz, reported on Beverage Dynamics, January 2016: “In terms of labels, 46% of women said they were intrigued by ‘traditional/classic/sophisticated’ designs. 39% were intrigued by ‘fun and whimsical’ looks, while 37% noticed labels that indicated “organic/sustainable” wines.” “Smart and clever” appealed to 36% of respondents, and “benefiting a cause I care about” intrigued 30%. Do you think any of these answers play into the discussion of holographic tag?

These comments are important given that 83% of wine is purchased by women, of which 36% are millennials and are primarily focused on purchasing experiences rather than just the product itself. As the US is the largest wine market in the world, labels are extremely important. It’s also notable that Swartz reports, 53% of women browse tags. As noted by Ogilvy—The first frame (substituting “visual impression” for our discussion) will prompt further exploration.

Wine is back in the spotlight for growth, largely attributed to millennials. As a demographic, millennials represent approximately 60% of the US market and are focused on wine purchases in the $11 to $20 bottle wine range. However, label strategies are not necessarily driven by the price of a bottle of wine. At ALL price points for each product, the product is repurchased based on a price-to-value relationship. No one buys Two Buck Chuck thinking the quality/value is a bottle to hoard for 10 years or to place in a fine wine auction at Christy’s. But at any price point, labels will generate evidence of the value proposition and this is communicated with a brand strategy.

In an effort to show that I’m not out of touch with reality. We all know that there are many components that influence our wine purchasing decision apart from personal acquired/settled preferences for a specific wine. For this discussion, we are focused on the tactile and visual questions that lead us to take a first taste of a wine that we see in ourselves. These are not listed in any order or inclusion.

· Price

· Label design

· Weight of the bottle/product

· Type of closure (plastic corks or screw caps will not be visible under foil)

· Description of the wine on the front and back labels

· Varietal/style

· Designation/AVA

· Acquaintance with the wine producer

· Recommendations (friends or retailers or wineries)

As an aside: There has been a lot of attention lately on the wine market in China. Here the label is very important because of the traditional importance of images and colors. Interestingly, colors like red, gold and yellow signify wealth, good fortune and elegance.

I came across a 2010 study authored by Vince Bonofede of California Polytechnic State University. The title of the research is- ANALYSIS OF THE AESTHETICS OF THE DESIGN OF SUMMER LABELS AND THE CORRELATION WITH THE PRICE. Contrary to the title of the study, it touched on label design issues in wine selection. The study was based on mathematical and regression analysis and looked at 7 categories of rules related to design aesthetics.

After complex analysis, Bonofede concludes, “After all wine is meant to be enjoyed, not a stressful walk down the wine isle. If a wine label is what catches your eye first, then go for it and enjoy .” That is, if a wine label was aesthetically pleasing to the consumer (eg color, shape, font size, etc.), then the label could have an overall effect on the consumer’s opinion of the wine (Burnhard , Martin and Troncoso (2008).

I think holographic labels will soon make their way into wine labels. Of course, using such images will promote product trials, conversation, label reading for information, brand promotion, and promote a long-lasting product and winery image. The frequency and impressions of such a label should be researched as a marketing component.

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