Is the Wine Industry Ready for New Label Technology?

Many in the wine industry talk about the new things in label design that is revolutionizing the industry. These are people who point out that there are new label papers, applications using foil, embossing techniques, shrink sleeves, colors, and scannable labels (QR). Yes, there are some nice new look to wine labels. But, a new approach that will capture the imagination, utilizes captivating technologies, combines tantalizing colors, and has proven research indicating customers are compelled impulsively to pick up and handle the product upon which the label appears. When was the last wine label you saw was one you could experience?

That new label product being promoted to the wine industry is a hologram. Holograms have been around commercially since the mid-70’s. The National Geographic Magazine introduced a small holographic image of an eagle on the cover of a monthly issue. I saw it and was amazed that you could see on side of the eagle and then the opposite side by simply rotating the cover of the magazine.

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

“Actual costs depend on how sophisticated the ultimate 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 $1000 for something simple as a logo or go as high as $8000 for a gorgeous display that combines 3-D depth, animation and stunning reflections.”

What makes holograms so interesting? Holography is a photographic technique that records the light scattered from an object, and then presents it in a way that appears three-dimensional. In the 70’s the object to appear in 3-D the model had to be in the actual size off 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 imaging to generate 3-D effects.

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

· Holographic images produce 3-D effect that capture consumer attention when pursuing shelves of wine. Applications can be tailored for vertical or horizontal bottle displays.

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

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

· Holographic images can be tailored for many marketing requirements-branding, neck hangars, and attention grabbers for passing consumers walking an aisle. For example, some holograms can be produced that will produce a burst of light as you pass by a hologram label.

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

· These labels do speak to the millennial generation who is technology savvy. This demographic does represent over 60% of the wine market and is fueling the growth in wine sales.

Ms. Toni Hamilton, Director of Marketing at ASL Print FX, has established some guidelines for effective wine labels. Do holograms conform to her guidelines? She asks, for example, on a store shelf will the label command attention in 3 seconds? Some research already performed by Integra indicates holographic images perform well. Will a holographic image reflect the wine, the winery and the target market? Every demographic responds to messages and the delivery format of a message differently. Research and testing would be the judge; more on market applications follow. Lastly, in almost all market demographics labels need to be fun, can have humor, should employ unique graphics and may be somewhat bizarre.

A label design firm in Napa has said there are exceptions to most rules about good labels-critter images on labels however are passé.

We know wine labels are/may be: art, informational (partly by law), entertainment, and used to influence consumer action. The following are some thoughts about the interaction of a wine label with the consumer.

As a consumer, do you think we are immune to marketing manipulation tactics; we’re much too smart for that trick, right? But, we should not be defensive about wine marketing tactics because the label can give us a lot of information (not just the legalese) about brand choices available to us. Labels create enduring loyalty, stimulate trials of new wines, foster enjoyment/expectations (the psychology mental expectations) and allow us to relate to the creators of some of our favorite wines/wineries and winemakers. Combined with the internet, we can now be more educated about our wine purchases and become educated brand evangelist for great inexpensive as well as expensive wines.

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

David Ogilvy, an advertising industry icon, had many quotes about using visuals to sell products. One I appreciate, which can be applied to holographic wine labels, “If you grab attention in the first frame (being applied to TV commercials) with a visual surprise, you stand a better chance of holding the viewer. People screen out a lot of commercials because they open with something dull.” “On the average, five times as many people read the headline as read the body copy.”

Other than advertising (print, TV, direct response), the wine industry generally has a major marketing tool in their bag of tricks to reach the consumer and motivate the consumer toward that first trial: the label is a major tool in the bag. The label can’t carry and perpetuate a bad brand, product or image to success. But, it will encourage a trial and then on to a repeat customer.

Wine Business Monthly has reported, in the Hispanic marketplace 70% of the purchasing decision on wine is price related, recommendations account for 40% and label design represents 14% of the buying decision. Obviously, there is a lot of cross-over between categories, but the relative importance of wine labels is enough to make it important in selling wine. If family recommendations came about due to a label initiated trial and a follow-on recommendation, labels could impact sales by nearly 30%-trials and re-purchases.

Mr. Kyle Swartz, reported in Beverage Dynamics, January 2016: “Regarding labels, 46% of women said they were intrigued by “traditional/classic/sophisticated” designs. 39% were intrigued by “fun and fanciful” looks, while 37% noticed labels that indicated “organic/sustainable” wines. “Witty and clever” attracted 36% of respondents, and “benefitting a cause I’m interested in” intrigued 30%.” Do you think any of these responses play into the holographic label discussion?

These comments are important given that 83% of wine is bought by women, of which 36% are millennials and are mostly focused on purchasing experiences not just the product itself. With the U.S. being the largest wine market in the World, labels are extremely important. It is noted also that Swartz reports, 53% of women do browse labels. As noted by Ogilvy-The first frame (substitute “visual impression” for our discussion) will cause further exploration.

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

In an attempt to show that I am not out of touch with reality. We all recognize there are many components that influence our decision on wine purchases, other than acquired/established personal preferences for a specific wine. For this discussion, we are focused on the tactile and visual ques that cause us to do a first try of a wine we see on the self-these are not listed in any order or inclusiveness.

· Price

· Label design

· Weight of bottle/product

· Closure type (cork or screw top-plastic plugs would not be visible under foil)

· Wine description on front and back labels

· Varietal/style

· Appellation/AVA

· Familiarity with the wine producer

· Recommendations (friends or retailer or winery)

As an aside: More recently there has been a lot of attention paid to the wine market in China. Here the label is very important because of the traditional importance of images and colors. Interestingly, colors such as red, gold and yellow connote wealth, good luck and elegance.

I came across a 2010 study authored by Vince Bonofede from California Polytechnic State University. The title of the research is- ANALYSIS OF WINE LABEL DESIGN AESTHETICS AND THE CORRELATION TO PRICE. Contrary to the title of the study it did touch on issues of label design on wine selection. The study was based upon mathematical and regression analysis and looked at 7 categories of rules relative to design aesthetics.

After complex analysis Bonofede concludes, “Ultimately wine is meant to be enjoyed, not a stressful walk down the wine isle. If a wine label is what grabs your attention first, then go for it and enjoy.” That is to say, if a wine label was aesthetically pleasing to the consumer (i.e. color, shapes, font sizes, 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 be making inroads on wine labels. Certainly, the use of such images will promote product trials, conversation, reading labels for information, promote branding and promote a product and winery image that is long lasting. The frequency and impressions of such a label need to be explored as a component of marketing.

Source by Steven Lay