The Present and Future of Alcohol

Alcohol is a multibillion-dollar market in the US, one that must constantly evolve in order to keep up with changing consumer needs. The category has seen some serious innovation so far this year, and our understanding of where the industry is now has provided us with some pretty significant clues as to where we can expect it to go in the near future.

The Present: Millennials Don’t Have Brand Loyalty

 

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According to a recent Nielsen study, last month only 24% of millennials knew what brand they wanted to purchase when they entered a liquor store. This is in stark contrast to 52% of baby boomers, who tend to have more developed, concrete preferences in this category. The study also found that just 11% of millennials bought alcohol on impulse.

What This Means for the Future

 

Alcohol brands can look at millennials’ lack of brand loyalty as an opportunity to have greater influence in-store, which means more investment in assets like package design and in-store advertising. Additionally, brands can be expected to make stronger attempts at building relationships with consumers via social media engagement.

The Present: Heineken Just Debuted a Non-Alcoholic Beer

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Heineken just released “Heinken 0.0” in order to compete with industry giants like AB InBev, which has made it their goal for 20% of their beer to be low- or zero-alcohol within the next eight years. Non-alcoholic beer manufacturers are also seeing the product as a potential rival to soft drinks, which have been losing retail momentum to lower-calorie options (Heineken 0.0 has half the calories of Coca-Cola).

What This Means for the Future

 

Beer brands – as well as other alcohol manufacturers – are going to start considering the financial promise of alternative markets. While producing non-alcoholic beverages may seem like an odd departure from convention for Heineken, research has shown that the European market for non-alcoholic beer has grown over the past five years as the overall beer market shrank. In Spain, zero-alcohol beers have as much as 10% market share. The future of the alcohol industry is going to depend on identifying and supporting niche trends like this that show potential for going global.

 

The Present: “Poptails” are Taking Off in the US

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The recent trend of “sloshies” (frozen alcoholic slushies, usually with a white wine base) has now evolved into “poptails”, frozen alcoholic popsicles. Initially introduced into the UK market, the treat has just become available in the US through brands like FrutaPop. Each pop in this particular brand has 5% alcohol and comes in thirteen flavors, including Sparkling Prosecco, Cranberry Mojito, Pina Colada, Rum Punch, and White Coconut Sangria.

What This Means for the Future

 

Innovation in the alcohol industry is trending towards understanding the consumer’s environment. Both poptails and sloshies appeal to young people drinking outdoors – summertime parties, poolside lounging, and beach trips are all served well by these products. Additionally, freezing the drink allows brands to incorporate the kind of special cocktail features that one could find in a bar, like the sprig of mint encased in the boozy Watermelon Mint Lemonade Pop. Finding ways to include these types of added-value traits is going to be imperative for new product development.

 

The Present: e-Commerce is Changing the Game

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The explosion in popularity of both online shopping and subscription box services is affecting the way that alcohol brands are packaging their products. Bulky, heavy glass bottles were never especially ideal for shipping from warehouses to retail locations, and they are doubly impractical for direct mailing. UK startup Garcon Wines has been in the news lately for their ingenious flat bottle design, intended to make the wine easier to fit through a traditional English letterbox.

 What This Means for the Future

 

Alcohol manufacturers (particularly wine companies) will begin straying from classic bottle designs and will start looking towards new solutions that preserve the product in a lightweight, yet functional way. It can be as simple as following Garcon Wines’ example with more compact structures, or brands can go as far as Bota Box has with their award-winning cartons, which are both much lighter and far less prone to breaking than standard wine bottles.

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As more brands begin to focus their attention on e-commerce rather than retail, design strategy will move away from what looks best on the shelf and will instead consider what will provide the easiest means of quickly transporting the alcohol to the consumer.

 

Brand Stories: PBR and the $44 Beer Bottle

PBR's Brand Repositioning

Pabst Blur Ribbon, better known to most as PBR, has served as one of the most popular beers for middle class Americans since its origin in 1844.  What was once the cheapest beer on the shelf is now a global phenomenon.

Brand Repositioning in the Early 2000s

In the early 2000s, PBR gained popularity with urban hipsters, college students, and millenials. The new fans were attracted to the minimal marketing and non-mainstream attitude. Following a nearly 20-year decline, sales suddenly rose 5%.

While most companies would have rebranded to appeal to this new audience, PBR opted to keep their branding the same in order to maintain the authenticity that attracted hipsters in the first place. Instead, they sponsored customer events and featured user-submitted photography and fan art on their website to encourage customer interaction, all without calling in the PR team.

Finding an Audience Abroad

Following the example General Motors set in 1999, PBR set out to appeal to a worldwide market and created a case study in brand repositioning.  In fact, big-name brands have been branding to the foreign market for decades. If you’ve ever taken a trip to Europe, you may find Disney comics are just as popular there as they are here. Kit-Kats and Spam are two other food brands that sell just as well abroad—if not better—than they do domestically.

Through a licensing agreement and joint venture arrangement with China Pabst Blue Ribbon, the American company has been able to successfully branch outside of the United States. PBR rebranded their once generic American product with a luxury ad campaign. What has been deemed “Blue Ribbon 1844” is selling for $44 a bottle in China. The specialty beer is considered a luxury in China and gives the perception of riches.

Brand Repositioning - The Story of PBR

The brewmaster states that the specially crafted reddish brown strong ale is in fact better than its American counterpart. “Blue Ribbon 1844” has the appearance of brandy, an updated recipe, and is aged rather uniquely, but it appears that the branding and perception is what is attracting most Chinese consumers.

PBR was once considered a working-class beer, but due to recent rebranding efforts, it has become the beer of choice for hipsters, college students, everyday Americans, and foreign enthusiasts alike.  The increase in sales led to a 10% price increase in 2009.  PBR’s success domestically and abroad has led to pricing shifts throughout the beer industry worldwide.

Pabst Blue Ribbon has proven that any business can create a successful brand identity and reposition themselves to be who they want to be, regardless of their current image. They continue to be one of the fastest-growing consumer brands in the country, with widespread influence around the world.

Holiday 2013 Craft Beer Series

Works Design's 2013 holiday craft beer packaging

During the holidays, Works Design Group likes to give our clients a little something special, presented in our most creative format. This year, we decided that nothing could be more special than a series of four artfully designed craft beer labels. As a team we came up with some fun, wintery ideas to translate into hand-drawn labels.  Printing on Neenah Paper’s premium metallic line brought the designs to life. And of course, what’s the value of interesting beer packaging without great beer?  We enlisted some help from Sly Fox Brewing Company and chose some of their most festive brews on which to slap our kick-ass labels. Good beer, awesome clients and specialty designs? We’ll drink to that.

Cheers!

– Works Design Group

Works Design's 2013 holiday craft beer packaging

Works Design's 2013 holiday craft beer labels

 

Works Design's 2013 holiday craft beer labels

 

Works Design's 2013 holiday craft beer packaging

 

Works Design's 2013 holiday craft beer packaging

Works Design's 2013 holiday craft beer packaging

Works Design's 2013 holiday craft beer packaging

Works Design's 2013 holiday craft beer packaging

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