WdV looks at how the move towards plain packaging could affect the drinks business and how it could also provide opportunity if approached in an innovative way that responds to consumer need.
Drinks packaging may be about to change significantly. On March 13, 2017, the European Commission adopted a report on the mandatory labelling of ingredients and nutrition declaration for alcoholic drinks. It has given the alcohol industry one year to develop its own voluntary initiatives – if at the end of that period it is dissatisfied with the industry’s measures, it will regulate.
A glance at a cigarette packet gives us an indication of where this might all end up, and for an industry long associated with beautifully crafted bottles, labels and outers, where every inch of packaging space is painstakingly designed to express the brand, this is concerning.
Yet, our recent research into consumer attitudes reveals that this may in fact be a significant opportunity for drinks brands. It may be a chance to lead on several emerging trends, and turn the threat of regulation into commercial opportunity. It is certainly a topic that ought to be top of mind for most drinks brand teams.
Regulating drinks packaging is not a new idea. The December 2014, EU Regulation on the provision of food information to consumers (1169/2011) made it mandatory to list ingredients and provide a nutrition declaration on all foods, except for drinks containing more than 1.2% alcohol per volume.
Within the EU, several member states have removed that exemption and many producers already provide that information. For example, back in March 2015 Diageo began to add calorie counts to many of its best-selling brands, including Smirnoff, Johnnie Walker and Guinness. However, this new legislation would remove the exemption across the entire area.
It has been driven by a large number of committed campaigners, many of whom are sceptical of the industry’s efforts at self-regulation. So, how do brands respond? There are three key steps: understand consumer opinion on the topic, devise innovative solutions that meet changing consumer needs, and find ways to create packaging that continues to communicate brand values to consumers.
Successful innovation and design must be based on recent, relevant consumer insight. This is why we built our insight community – Home of Ideas, a panel of more than 4,000 consumers across four continents, who offer us rapid, detailed insights into key topics. These insights are invaluable to our clients, giving them both initial ideas and then validation of creative ideas, all based on the latest opinions of a representative cross-section of their target audience.
When looking into this issue a few months ago, we gathered the views of 637 respondents in US, UK and HK over the 27th and 28th June 2017. Perhaps the most encouraging finding was that only 9% said the presence of nutritional information on drinks packaging would deter them from drinking. They do want the information – 61% would like to see nutritional information presented to them on pack rather than in a leaflet or website – but the main use they would make of this information is to make better decisions on which drink to buy.
Furthermore, our respondents were very clear that they would like to see information but would not like to see images, copy or graphics designed to deter them. They are looking for a system closer to food packaging – 48% would like to see a traffic light system – than to the extreme plain packaging of tobacco.
Given that cigarettes are entirely bad for you, while alcohol, like fatty foods, can, in moderation, be good for you, this seems a rational position. It also allows us to view the issue through the lens of our ongoing work to understand emergent consumer trends, and to consider some areas for product innovation.
Broadly, there is a trend for people to drink less. Figures from the Office for National Statistics revealed that, 56.9% of those interviewed had a drink in the week before being interviewed – a fall from 64.2% a decade earlier. Among younger people the fall is even more pronounced. The causes of this are complex, but concern for health is certainly a factor. It is a social change that is changing spirits consumption in three key ways.
Firstly, we are seeing people focus on quality over quantity. Between 2011 and 2015 there was a 3% drop in spirits sales volume but an 8% increase in sales value. Look at brands like Flavourly, a fast-growing craft beer subscription service that puts the emphasis on trying out new, premium beers, or Dalston’s premium colas, or Seedlip, the first non-alcoholic distilled drink which retails at £28. Premium drinks brands can proudly display nutritional information, highlighting how their experience is one of drink quality rather than alcohol quantity.
Secondly, the ready-to-serve drinks segment has for a long time been under-exploited, with own-label taking the lead in many areas. The greater emphasis on nutritional information offers opportunities for brands to own this space as it allows them, rather than a bartender, to select the other ingredients in the drink. We may see infused spirits offer a more sophisticated and premium variation on the ready-to-serve segment.
Thirdly, today’s consumers search for experiences as much as they do products. Look at The Bletchley, a pub in Chelsea which earlier this year launched a pop-up bar where visitors had to crack codes to win cocktails, or Pitch Black in Covent Garden where they serve drinks in pitch-blackness.
This enthusiasm for experience points to a way brands could deliver product while embracing the trend towards healthy drinking. It will take some innovative thinking by brand teams but it can be done. Nutritional labelling can become an opportunity.
Beyond this innovation, there are opportunities for drinks brands to connect with consumers by using on-pack nutritional information. Our research indicated that they will use nutritional information to choose between drinks, so get ahead of the curve and reshape your brand to become the one that consumers choose.
Is there a variant of your brand that could be created from ingredients that have a health story to tell? It may be a new coconut spirit, or a drink distilled from a hitherto unknown African grain, or perhaps sake – find the connection, tell the story, and then make a hero of the nutritional information. Execute that nutritional information, along with the rest of the visual identity, in brand relevant way. Find an appropriate tone of voice for your brand and audience.
Think too about structure. How would resizing your product affect the nutritional information you deliver? Would smaller sizes encourage trialling? Finally, our research showed that where you put the information on pack matters, and that this information ought to go on the back of the pack – consumers want information, but they don’t want it forced on them.
Moment of sale
Finally, consider the broader context in which purchase decisions are today made. In today’s multichannel world 60-80% of the time the moment of sale takes place before the shopper reaches the shelf. Your audience can begin their brand journey anywhere.
So, for Bombay Sapphire this led to us using technology to illuminate brand stories for global travel retail shoppers and produced a 78% sales uplift in the first year. For William Grant & Sons we produced point-of-sale toolkits that drove a tenfold sales increase in the first month after launch.
Combine this sort of multichannel thinking with the insight-led strategy, ground-breaking innovation and human-centred design, and, regardless of whether nutritional information becomes a regulatory issue or not, it can become a way to build that all-important trust with your consumers and offer significant commercial opportunity for your brand.Back to news