The spirits industry is changing and packaging is a key component of its transformation. We look at how digital printing is helping distilleries stay ahead of the trends in 2023.

Rapid changes in consumption habits, consumer preferences, and market standards are creating more hurdles and opportunities for distilleries to attract consumers with packaging that resonates.

A growing number of brands are discovering that digital printing provides an optimal solution to align their packaging to accommodate many of the changes affecting the spirits industry today, including:

Premiumisation
Moderation
Sustainability

A closer look at current trends within the sector reveals why this production technique has become a reliable solution to distilleries during this time of transformation.

Distillery Packaging Targets A New Drinker In A Changing Market

At first glance it would appear that spirits brands have little to complain about today. Global alcohol sales bounced back to pre pandemic levels in 2022 and are expected to enjoy an impressive 28% growth rate until 2025. In the US, consumers earning $100,000 or more reported spending a noteworthy 31% more on alcohol in 2022.

But just as in other industries, inflation and supply chain disruptions have taken a bite out of profits. Now more than ever, distilleries need flexible, cost-effective solutions that deliver options to producers and consumers alike.

Premiumisation

Premiumisation has allowed spirits brands to curtail price increases across the board. By offering new, higher quality products (or premium versions of existing ones) distilleries appeal to a growing number of consumers willing to spend more, without alienating their customer base due to dramatic price increases.

And as the data indicates, this tactic is paying off around the globe:

The number of Americans who reported spending over $50 on a bottle of alcohol rose from 24% in 2021 to 33% 2022.
Premium-priced RTDs (ready-to-drink beverages) comprise the fastest growing segment of the global market, debuting at increasingly higher prices.
In Europe, the craft spirits market is predicted to grow at a rate of 21.95% from 2022 - 2028, driven by greater demand and a proliferation of micro breweries & distilleries throughout the region.

Digital printing delivers high quality packaging in minimal turnaround time

Premiumisation is contributing to two major shifts in distillery products: more brand SKUs and higher quality packaging. Unfortunately, many producers are unaware of the invaluable flexibility and outstanding quality that digital printing offers.

Traditional offset printing requires laborious plate setup prior to each run. In contrast, digital printing needs no preparation and can seamlessly execute various designs with a simple file upload. It allows for uncomplicated initial test runs and can be interrupted and reset with the click of a button.

This significantly reduces production costs and turnaround times—a godsend for handling smaller batches of a wider variety of products. Digital printing enables packaging design to instantly adjust for:

A range of flavours
Limited editions
Seasonal blends
Holiday packs

But what about quality? Without a doubt, this is—by far—the top concern brands have when considering printing options, especially for premium products. Yet few realise the huge advances digital printing has achieved over the past decade, making it hands-down the best option for distillery packaging. So what’s changed?

Improved colour accuracy

Its precise replication of any colour has been a longtime flex of offset printing. But when hue powerhouse Pantone adopted the G7 calibration methodology (a system already in use by commercial printing worldwide) the doors opened to digital alternatives.

For the first time, its Colour Bridge Guide—a comprehensive swatch book of every shade imaginable—included corresponding 4-colour CMYK codes to each colour. This gave digital printing the capability of replicating an impressive 94% of all CMYK colours, bringing it nearly on par with the quality of offset printing.

More textures & materials

One way premiumisation is being translated into spirits packaging design is the use of a variety of textures and materials. Heavier, sustainable papers and hot foil stamping are just a few ways brands are communicating luxury to its market.

Offset printing has a reputation for being able to tackle just about any surface thrown its way. Yet just as with colour accuracy, advances in digital printing technology are catching up with traditional methods.

Not only can digital printing be used on secondary packaging materials such as fabrics, it can also handle the types of primary packaging the spirits industry is dependent on. Digital can printing has provided breweries a cost effective packaging solution thanks to advances in machinery such as Hinterkopf’s D240.2 digital printer capable of producing designs directly onto aluminium cans.

Higher speeds

Digital printing is known for its swift setup process. Yet when it comes to larger runs, the speed of offset printing compensates for its slow start and eventually outpaces digital printing. But equipment upgrades such as HP’s Indigo 200K Digital Press are closing those gaps.

The tech giant’s latest model not only offers 30% faster runs and a 45% increased productivity rate, it has also made digital printing a viable option for producing flexible packaging components used throughout the distillery industry such as labels, pouches, and folding cartons.

Now, not only can distillers run a wide variety of products, they can also produce higher volumes of a single product faster and more efficiently, prompting many suppliers throughout the industry to make the switch to digital printing for their packaging needs.

As consumers reach for premium products and production costs continue to rise, digital printing offers distillers a solid solution capable of handling their packaging needs at a lower cost.

Moderation

Behind the increased market growth and consumer willingness to spend more lies another, less encouraging trend affecting the spirits brand: moderation. And it’s a phenomenon borne out of rising prices, less spending power, and a greater emphasis on health and wellness.

A recent survey found that roughly 50% of adults around the globe plan on decreasing their alcohol consumption.
In 2022, 91% of ‘Dry January’ participants cited ‘health’ as their biggest motivator in taking part. While participation dropped from 19% to 15% in 2023, a larger percentage of participants claimed practising complete abstinence rather than reduced drinking, with 73% naming ‘saving money’ as their driving factor.
The largest cutbacks in alcohol expenditure are occuring in Europe, with overall sales volumes down, yet higher individual unit spending.

Advances in digital printing make flexible packaging & better labelling a reality

The fact that people are spending more yet drinking less is driving premiumisation. Yet spirits brands cannot solely depend on premium product sales to keep numbers afloat.

With no sign of decreasing inflation or market improvement on the horizon, distilleries need to adapt products and packaging to the health and economic factors at the root of consumers drinking less.

This can be seen in the following trends throughout the market:

Rapid uptake of no/low alcohol products
Growing preference for smaller, individual beverage sizes
Greater consumer demand for ingredients transparency in labelling

As with premiumisation, these changing consumer behaviours have big implications for spirits packaging.

Increase in SKUs

No-alcohol products are predicted to make up 90% of volume growth within the fastest-growing category of no/low alcohol RTDs/beer/cider/wine & spirits. The industry is taking notice, with big brands such as Bacardi and Heineken, as well as smaller craft brands like Athletic Brewing and Seedlip enjoying impressive sales of their no-alcohol products.

As distilleries initially introduce their own low/no alcohol products, an increase in product SKUs at lower volumes will call for shorter runs, a job best handled by digital printing.

Rethinking individual drinks

With consumers spending and drinking less, the demand for smaller-sized packaging is increasing. This has led brands back to the drawing table to reimagine individual beverage containers

The result? The introduction of cocktail/mocktail pouches and a greater demand for aluminium cans. Innovative equipment such as HP’s Indigo 200K Digital Press and Hinterkopf’s D240.2 have allowed distillers to turn exclusively towards digital printing for their flexible packaging and aluminium printing needs

Furthermore, as inflation drives production costs up, finding cost-effective solutions such as digital printing will allow brands to curtail steep price increases on their products.

Clearer product information & more promotional opportunities

As consumers adopt a more health-centred diet and lifestyle, it’s unsurprising that they’re paying closer attention to what goes into the products they consume.

QR codes are increasingly being used to communicate product information across all industries. While spirits companies have been slow to jump on the trend, the recent increase in consumer health concerns regarding its products have prompted distillers to include interactive labelling on their packaging.

Pernod Ricard recently announced plans for an upcoming launch of digital labelling throughout its products. The spirits giant would include a scannable QR code on the back label of each of its brand bottles, which would display relevant health information.

In addition to greater ingredient transparency, booze brands are also using QR codes as a promotional tool, linking customers to recipes, contests, and special offers. Industry powerhouse Diageo added a code to its Tanqueray No. 10 bottles, taking customers to its website for cocktail tutorials and more.

Digital printing provides an optimal solution for QR codes and packaging due to its lack of setup and easy sample runs. This is crucial when companies need to test, add, or edit a QR code within their packaging.

As the spirits industry adjusts to the health and economic factors driving moderation, digital printing offers distilleries the flexibility needed to adapt to consumer habits, preferences, and demands while keeping costs down.

Sustainability

The growing demand for eco-friendly packaging within the spirits industry is both a driving factor and direct product of changing trends throughout the market.

Sustainable packaging has come a long way from its original brown paper and twine beginnings, sporting a far more attractive aesthetic and status appeal in our time.

Considering recycled materials are now an instant nod to product quality and natural ingredients, it’s no surprise that eco-friendly distillery packaging is becoming more prevalent among an increasingly selective customer base. And brands hear the message loud and clear.

Packaging contributes to 20-40% of the carbon footprint produced by the spirits’ industry.
According to a recent survey, 86% of consumers under 45 were willing to spend more for more sustainable packaging. Likewise, 57% of respondents of all ages claimed they were less likely to purchase products in non eco-friendly packaging.
Irish Distillers have committed to the exclusive use of secondary packaging which will be 100% recyclable, reusable, and/or compostable across its entire brand portfolio by 2025. Likewise, the Scotch Whiskey industry has pledged to reach net zero by 2040.

Digital printing is a cost-effective way for distilleries to approach sustainability

As production costs rise and eco-friendly packaging becomes a significant factor feuling purchasing decisions, distilleries must make every effort to cut costs and appeal to their market.

Digital printing does just that. It makes sustainability feasible for producers of all sizes, as both an attractive product feature and cost-effective production practice.

Reduce energy consumption & costs

When it comes to energy consumption, time is money. By reducing each SKU run by hours, producers automatically cut dozens to hundreds hours of electrical usage. This equates to lower operation costs and allows distilleries to take a step closer to becoming carbon neutral, a goal many brands have already committed to.

Less waste, better supply management

As mentioned earlier, traditional printing requires a tedious setup process for each individual SKU. Because of this, most printers require minimum quantity amounts to offset costs.

But as unit sales volumes drop and distilleries expand their product range to embrace premiumisation and no/low alcohol options, most brands will be producing more runs of smaller volumes. The absence of minimum run amounts allows brands to adjust production to sales in real-time, prevents overproduction and ultimately reduces waste.

Improved brand image

With Millennials now making up the largest consumer demographic, and Gen Z trailing close behind, brands are now motivated more than ever to adopt sustainable practices and policies that resonate with these eco-conscious customers.

And as these generations gain more sway over markets, an eco-friendly brand image will be more crucial than ever. So much so that a recent survey among Gen Z respondents revealed a whopping 65% of Gen Z would pay up to 48% more on purpose-driven brands.

Digital printing offers distilleries a way to use less resources and shrink their carbon footprint while simultaneously saving money and increasing efficiency. Few (if any) sustainable practices offer such benefits to both producers and the environment. Now brands of all sizes can attract customers with impactful, green practices they can easily implement and afford.

There Has Never Been A Better Time To Go Digital

The fact that today’s consumer is more selective, yet willing to pay more than ever, has granted distilleries a rare opportunity to put better products on the market and revamp their brand image.

Digital printing allows spirits labels to experiment with packaging design and sustainability without spending an excess amount of time, money, and supplies. And as inflation and consumer awareness continue to affect the market, there has never been a better time to go digital.

Thinking about making the digital switch but don’t know where to start?

Reach out at hello@colabpackaging.com