Please join us at the upcoming 2012 Napa Valley Grape Growers Viticulture Fair. Stop by our booth to see what’s new in glass and packaging, or just to say hello. See you there!

Global Package – Booth #106

November 7, 2012
8 a.m. – 3 p.m.

Napa Valley Exposition Fairgrounds
575 Third Street
Napa CA 94559

New Bottles from Global Package

We’re thrilled to introduce two new lines of spirits bottles and a gorgeous new Burgundy bottle to the Global Package collection.

– The new burgundy bottle—the Claire—is the most recent addition to our Elegant Light line of bottles. It boasts more reserved styling than other bottles in its category, with an elegant swan’s neck, and provides a more substantial label area compared to bottles in its category. And while it conforms to the standards of the superior, lighter-weight bottles in the Elegant Light line—including a 1.5” punt and 31.5mm capsule top—it is a definitive line extension which differs from the sturdier-formed Bella and Carré bottles yet in the same line with its taller and broader body. It’s available in antique green in any quantity and can be also ordered along with brand-printed boxes.

– A new line of competitively priced, mid-weight spirits bottles for the discriminating, high-end market is now available on the shop floor. These bottles come in a range of styles, from antiquity to modern, in high-grade clear glass. The Teo and Millennio have a fatter decanter-style neck, whereas the antique Apotheker has standard dimensions for bottling ease.

– We have also added a variety of premier European spirits bottles that have the capability of being elaborately decorated. Ask for the Pure Glass collection from Estal. The photo of the Senso bottle is an excellent example of the extraordinary silk-screen detail that’s possible with these unique bottles.

Of course, we still have an extensive local inventory of stock bottles, as well as metallic label and design services from internationally acclaimed Tucker Creative.

Intellectual Assets

Industry veteran Mike Meneghilli recently joined Global Package as Sales Representative. Mike comes to us with over 35 years of wine industry experience, beginning in 1977 in the cellars and aging winemaking departments of the legendary Robert Mondavi Winery. While at Mondavi, he also honed his technical technical knowledge of the relationship between bottles, corks, capsules, and labels all integrate to make a brand succeed in the marketplace. He later moved into sales and marketing to help educate distributors, sales teams, and consumers on all facets of the winemaking process. We are extremely happy to have his marketing expertise and customer service skills on our team.

– Those of you who have visited our Napa showroom may have already met Kathy Feder, our Office Manager and Assistant to the President. Kathy has been in the industry for over 15 years in the areas of customer account management, order fulfillment, sales and margin improvement, bookkeeping and cost-reduction strategies, and customer satisfaction enhancement. Prior to joining us, Kathy was Senior Account Manager at Bergin Glass Impressions and Operations Manager at Etched Images, two wine bottle-decorating companies specialized in custom screen printing and etching. Kathy’s background in high-quality, customized packaging make her an ideal fit for Global Package, and we’re very happy to have her with us.

Industry Boost

Wines sales in the US rose to a record level in 2011, solidifying our position as the world’s largest wine market. Global California wined sales also increased by an impressive 5.6%, with Napa vintages playing a significant role in that increase. Interestingly, the fastest growing wine varieties were sweet red wines, with Muscat/Moscato growing by 73% in volume and others increasing around 200%. Malbec and blended reds also grew at double-digit levels. Fine wine sales bettered projections, as well. At the same time exports of US wine soared by 22% last year to reach a record US$1.39bn, according to the California-based Wine Institute, which “puts the US on-track to meet the Wine Insitute’s target of $2bn in export sales by 2020.” According to Silicon Valley Bank’s annual State of the Wine Industry report, sales grew 12.2 percent in 2011 for US makers of wine primarily retailing for more than $20 a bottle, up from 10.8 percent in 2010. After just returning from a trip to Kentucky’s wine region, I’m sure that burgeoning region is contributing to those record numbers. In just five years the number of Kentucky wineries has increased from 15 to 50, moving approximately 100,000 cases per year. For more, click here: http://www.northbaybusinessjournal.com/51321/california-wine-shipments-in-2011-rise-5-6-percent-to-new-record/ and http://www.kentuckywine.com/about/history/.

The Skinny on Wine Apps

With the rise of apps for just about everything, it was just a matter of time for developers to come up with iPhone and iPad apps for the serious oenophile, as well as the easily intimated wine consumer. Here’s a review by MacWorld’s Ben Boychuk that discusses four apps—Drync Wine Pro, Wine Snob, The Wine Enthusiast Guide, and Wine Cellar Pro by Velvet Vine—that are designed for both serious connoisseur and the beginning drinker. For example, The Wine Enthusiast Guide will let you search for wines that are rated 89 or higher for $15 or less. The Wine Snob “lets you track and rate the wines you drink, while letting you search for wines you might like, providing basic definitions, and offering helpful suggestions such as general food and wine pairings.” Drync Wine “lets you keep track of the wines you’ve drunk, the wines you own, and the wines you’d like to add to your cellar.” The Velvet Vine Wine Companion is a “full-featured experience …with a rich database of user-generated reviews and recommendations …much like a social-networking app for winos.” For the complete reviews, click here: http://www.macworld.com/appguide/article.html?article=139106

Wines By The Glass

We thought this recent survey by Napa Technology provided some great advice for restaurateurs, wine bar owners, and others in the hospitality industry to meet the growing demand for more interesting by-the-glass wine selections while maintaining margins. According to a panel of industry experts, a preservation system is a top priority for wine-by-the-glass programs to “protect the wine from oxidation either by sparging with an inert gas or by flash-vacuum.” Many of the panelists use the WineStation system, which provides “portion control and eliminates product spoilage while increasing profits through advanced 60 day preservation.” Other suggestions include: Know the Fill Line (Champagne pours are different than still wine pours); Monitor Temperatures; Emphasize Staff Education; Menu Within A Menu (offer unique wine prix-fixe or flights); and Wine Pairing Suggestions. For the full report, click here: http://www.napatechnology.com/press/napatech_winebytheglasstips.html

News ‘n Notes

Some winemakers who are looking for on-shelf differentiation are experimenting with a trend that artisan beer brewers started: aluminum packaging. The newest entry in the market is the Flasq screw-cap aluminum bottle that holds two generous glasses of Merlot, Chardonnay, and Cuvee Blanc per bottle. (http://www.specialtyfood.com/news-trends/featured-articles/food-trends/food-trends-march-2012/). Diageo recently published its first Sustainable Packaging Guidelines, based on three principles: optimize packaging material to reduce its environmental footprint where possible; design with the cradle-to-cradle life cycle in mind; and use leading-edge technologies to minimize packaging and optimize recycled materials (http://www.packworld.com/sustainability/strategy/diageo-publishes-sustainable-packaging-guidelines). Imports of bottled wine to China hit a record US$1.27bn in 2011, up 94% year-on-year, while the value of bulk wine into China fell by 20% in the same period, indicating that the imported wine market is evolving from low-end to high-end, according to Lin Feng, VP of H&J Consulting (http://www.just-drinks.com/news/fy-imported-wine-sales-hit-record-high_id106708.aspx). Millennials are drinking wine at nearly every imaginable occasion, including when showering, reading a book to relax, and even eating Cheerios in the morning. This interesting study by the Wine Business Institute at Sonoma State can be found here: http://www.winebusiness.com/news/?go=getArticle&dataid=90023.

News for the New Year

It’s show time again! This year we’re excited to be showcasing two new beautiful bottles—the Fiona (photo below) and Claire—at the upcoming Unified Symposium in Sacramento January 24 – 26 (Booth 942) and at the Annual Winter Fancy Food Show in San Francisco January 15 – 17 (Booth 655).

- The Fiona boasts a daring look with a bar top and strong shoulders. It has the presence of a heavy, stately bottle, but is part of our Elegant Light line and weighs only 600 grams. The top can accommodate a traditional tin foil and the height is comfortably just a bit taller than a standard bottle. It’s a perfect addition to other tapered bottles and for partnering with an elegant new Burgundy Claire.

- The Claire is an elegantly appointed Burgundy bottle that will be available in Spring 2012 as an addition to the handsome line of lighter-weight, larger-neck bottles in the Elegant Light lineup. Its curvaceous lines make it sensually appealing, with a label area that’s extended to satisfy your labeling presence. Samples of both bottles are available upon request. Hope to see you at Unified (http://bit.ly/zmlJ1Y) and at the Fancy Food show (http://bit.ly/yZNgav)

Global Package in the News

One of our prestigious customers, Steven Burrows, Chief Operating Officer for Haas Brothers/Cyrus Noble, was featured in not one, but two packaging publications: Package Design Magazine (http://bit.ly/y32NKC) and Packaging World (http://bit.ly/ynwuw2) Check ‘em out. We think the pieces offer some good insight into updating a legacy brand, and we were honored to be a key player in the process.

Does Customization Pay Off?

As many of you know, for years I have worked with Barrie Tucker of the Barrie Tucker Company in Australia, who over the course of 30 years has spearheaded the design of many of that continent’s leading wine brands, as well as other leading international brands. He was inducted into the Australian Design Hall of Fame in 2008. Together, we have developed a new White Paper that discusses the value, benefits, and best practices of customized packaging for the wine industry (http://bit.ly/x0fX8E). He also contributed a case study (http://bit.ly/w3EebE) illustrating his design process when he created a propriety bottle and label for two premium Merlots for South Australia’s Smith & Hooper brand. Check out the bottles here: http://www.smithandhooper.com/wines.html

Originality Matters

Every so often a customer will tell me he wants his wine to “look like” the category leader’s wine …a bad idea in my opinion. Not only does knocking-off another brand invite legal action, it’s rarely a smart strategic decision. Here’s a great article by Marianne Rosner Klimchuk, Associate Chairperson, Associate Professor, Packaging Design Dept., Fashion Institute of Technology that discusses the topic. The Trade Dress Protection Act (amended from the Trademark Act of 1946) states that trade dress—which can include “fonts, font colors, window curvature and packaging dress”— functioning as a mark may be registered and protected without the need to show that it has become distinctive if the relevant public is likely to identify the source of the product or service by reference to the subject matter claimed as trade dress. In 1995, a Supreme Court Case stated that under the right circumstances, trade dress that consists purely and simply of a color can be protected; e.g., the Campbell’s red soup can. “Professional designers seek to design original and innovative strategic solutions to marketing problems. Certainly they want to create a design that beats out the competition for shelf visibility, but they seek originality over mimicry,” Kimchuk says. While marketers may sometimes encourage a follow-the-leader design to grab market share, they need to consider potential legal ramifications. In her view, the best solution is “a design that is a competitive instrument providing strategic results based on innovation rather than imitation.” We agree. Click here for the article: http://bit.ly/wIVe8y

Try Before You Buy

Tastingroom.com is employing its “Try Before You Buy” program in a partnership with retailer Cost Plus World Market to provide samples of luxury wines in 100ml bottles to customers, who can buy both the 100ml Wines by the Glass product and the full-size 750ml bottles at Cost Plus World Market stores. Tastingroom.com is already known for creating wine samplers that feature six 50ml mini bottles that hold 1.7 oz. of wine each. The Cost Plus partnership will feature the wineries selections—which will retail for $24.99-$34.99 at over 200 Cost Plus World Market stores across the country—in four 100ml bottles of their premium wines. Participating wineries include Duckhorn Wine Company, Pine Ridge (part of Crimson Wine Group) and Boisset Family Estates. Read the full story here:
http://bit.ly/xuw9Rx

Chinese Wine on the Rise

According to Business Insider.com, 10 French judges and 10 Chinese judges spent 40 minutes on December 14, 2011 in a blind tasting of five wines from Bordeaux and five wines from Ningxia, an autonomous region in Northwest China. The wines were all priced between 200 and 500 Yuan (or $30 to $80 USD) and “were wrapped in black cloth and tagged with a number.” When the results were announced the top four wines turned out to be Chinese …a sobering conclusion for wine exporters to China, particularly given the handicap the country’s import tax places on foreign wines. “We used a price range to compare top Ningxia wines with bigger and better-known Bordeaux brands sold here by major distributors—brands consumers are more likely to know and have access to,” said Jim Boyce, organizer of the Ningxia vs Bordeaux Challenge, and administrator of www.grapewallofchina.com/. But the price difference between the winning Chinese wine (488 Yuan or 80 USD) and the most expensive Bordeaux (350 Yuan or $55 USD) was significant, which presumably would favor the Chinese brands. You can read more and find the winners and losers here: http://bit.ly/w7M6yF

News ‘n Notes

New regulations affecting members of the California wine and alcohol beverage industry in 2012 include clarification on third-party marketing and promotions, a new direct-to-consumer wine retail license, permission for on-premise infusion of wine and spirits with flavors, a change in the definition of “distilled spirits” for taxation purposes, new state Russian River frost-protection water rules and agricultural union elections law changes (http://bit.ly/wkFtDf) …France and Chile currently dominate as major players in the South Korean wine market, with Italy, California / USA and Australia forming an important second tier (see Country Power Chart in South Korea based on Vinitrac® data …62% of the 5.5 million imported wine drinkers in Russia and 72% of the 17.9 million imported wine drinkers in Brazil are under 44 and primarily live in the twin hubs of St. Petersburg and Moscow and Sao Paulo and Rio de Janeiro. Download the report here (http://bit.ly/xmNFCN) …Loved this video, “How Chinese Learn to Drink Wine.” Check it out: (http://bit.ly/yFf43E) …Ex-basketball player Yao Ming has started his own wine company, Yao Family Wines, in Napa, California and has appointed Pernod Ricard as its exclusive importer in China (http://bit.ly/yfWDM8) …94% of U.S. wine consumers still prefer natural cork, according to a recent study by to a recent survey by Tragon Corp. PDF can be downloaded here (http://bit.ly/A0GnGy).

About Global Package
With an astute understanding of the industry and the needs of clients, Global Package sources wine and spirits bottles and packaging worldwide.
Bottles
• Elegant Light line
• Premium, in stock
• Ultra-premium
• Custom molds
• Competitively priced Packaging
• Pewter labels
• Custom boxes
• Spirits bar-top closures Decorations
• Silk-screening
• Medallions Design
We are at your service.

Erica Hiller Harrop
President

Erica Harrop, GLOBAL PACKAGE, LLC, Napa, CA.
707-224-5670 (phone) 707-294-7899 (mobile) 707-224-5683 (fax)
info@globalpackage.net
globalpackage.net

Barrie Tucker, founder and principal of Barrie Tucker Company, has had his share of accolades. Over the course of 30 years, the Australian native has designed packaging for some of wine industry’s most prestigious international brands, including Stag’s Leap and Voss Vineyards in the U.S., Mission Hill Winery in Canada, Nautilus in New Zealand, and Penley Estate, Yalumba, and Greg Norman Estates in Australia, among many others. His innovative work with glass has played a leading role in the advancement of contemporary wine brands, as well as Australia’s wine industry. He recent shared his work on a design project for Smith & Hooper that illustrated how proprietary package design can boost brand recognition in the marketplace and still be affordable.

The two-pronged project required Tucker’s design to not only introduce the new Smith & Hooper brand, it would also launch a new Australian wine region: Wrattonbully, an area located between Coonawarra and Padthaway vineyards. George McEwin was the first to plant wine grapes in this limestone coast region in 1885. Today, the area boasts 50 grape growers and close to 20 wine producers of Cabernet Sauvignon, Shiraz, Merlot, and Chardonnay varietals. Smith & Hooper was launching two varietals, a Cabernet Merlot and a Merlot.

“The Terra Rossa mineral-rich soil, topography, and weather is perfect grape growing terrain,” says Tucker. “It all brings a unique character to the wines produced here. It was important to express that singularity in my design.”

To contain costs, Tucker chose to embellish an existing bottle rather than create a new bottle mold. For many years, Tucker has worked with Erica Harrop, founder and CEO of Global Package LLC. In fact, he created her company’s identity and also worked with her on the Stag’s Leap project. So he immediately contacted her former associate in South Australia. “Erica sources glass from many suppliers, and we had worked often together to select handsome bottles for a variety of projects.” Because both wines are priced at the mid-range level, Tucker wanted to demonstrate that customized, proprietary packaging could also be affordable.

Smith & Hooper was established in 1995 and is one of few pioneers to produce wines under the Wrattonbully appellation. The winery is now owned by S. Smith & Son, which also owns Yalumba wines, Australia’s oldest family-owned wine company. The wines are made from estate-grown fruit, which gives it a distinctive regional character. “I knew Barrie wanted to capture the unique ambiance of the region in the packaging, as well as the superior quality of the wine, so we didn’t want a bottle that looked or felt cheap,” Harrop says. “It needed to have some heft while being economical, so the Bordelaises Premier was a good choice. It weighs 715 grams and is 329.5mm high with a base diameter of 72.1mm.”

Once the bottle was chosen, Tucker went to work on the design details, beginning with the creation of the brand identity. He then tackled the bottle presentation design and, finally, the label and carton designs. Because there were two SKUs under the Smith & Hooper brand—a premium Cabernet Merlot and a super premium Merlot—Tucker was able to achieve economies of scale by using the same bottle for both brands, but embellishing them differently.

He first created the Smith & Hooper logo in a sophisticated, flourishing script, which would be featured on the label as well as embossed across the shoulder of the bottles. He then designed an S&H icon, which would be debossed and then embossed in a diamond shape into the front surface of the bottles. For the super premium, limited edition Merlot product, the S&H icon would also be acid etched, giving it a superior quality appearance and a point of differentiation between the two products.

The label presented its own design challenge. “Wrattonbully is an unwieldy and unglamorous name for a wine region. But it had to be front and center on the label, since we were also introducing this new wine-growing region to the world,” Tucker recalled. “The wines are reputed to be at least as good as those produced by the neighboring and more-famous Coonawarra region, so I decided to use an elegant traditional typeface to lend sophistication to the name.” Combined with the deckeled edge on the paper label, the entire presentation was one of exceptional refinement.

The package was voted “Author’s Choice” by the Australian wine company, Samuel Smith & Son, who described the Smith & Hooper package as “Exceptionally classy packaging for a wine at its price.”

According to Tucker, the two wines had immediate impact when they were introduced and they continue to succeed in wine shows and in the retail arena. “It’s gratifying to work on a project that has had such far-ranging influence and success,” he enthuses. “I understand my designs are still be used by the winery, even for a new white wine product. It’s proof positive of the effectiveness of proprietary design when it’s well-conceived, skillfully rendered, and doesn’t break the bank.”

About Barrie Tucker
Barrie Tucker founded the globally recognized Barrie Tucker Creative (also The Barrie Tucker Company) in Adelaide, as well as groundbreaking sister studio, Designer Wines. Over the years, his creative output has touched upon practically every facet of the design spectrum. Untold numbers of international awards, publications, exhibitions, distinguished commissions and successful brands are testimony to his talents. He is recognized as a master designer by his peers and was inducted in 2008 into the Australian Design Hall of Fame. He is a member of the élite Alliance Graphique Internationale, a Life Fellow of the Design Institute of Australia, and has been described by AGDA (Australian Graphic Design Association) as an ‘Australian graphic design legend.’ Samples of his work can be found at www.barrietucker.com.

Many studies have proven the important role that wine packaging design plays on consumer acceptance and perception of value. Aside from the obvious benefits that wine packaging provides, such as protection and preservation of the wine during shipment, wine packaging can add substantial value in the mind of the consumer, allowing you to achieve higher price points and higher margins.

Additionally, effective wine packaging can boost sales by making the wine attractive and accessible to the neophyte buyer. It can also differentiate your wine from competitors’ on the retail shelf. Finally, design that calls for lighter-weight bottles and less packaging materials will also reduce the impact on the environment. At the same time, successful packaging design will reinforce your brand image and messaging through the use of appropriate bottle shape, color, and embellishment; label color and design; and closure style and efficacy.

The Role Packaging Plays in Buying Decisions

A study co-authored by professors Orth (The University of Kiel) and Malkewitz (Oregon State University), found that consumers make the decision to purchase a wine in a POS situation according to two general responses: the affective response (attractiveness) and cognitive response (quality)—also referred to as extrinsic and intrinsic factors—both of which can lead to different price expectations. Their report states that “Consumers who value aesthetics base their price expectations more strongly on the package’s attractiveness, whereas consumers highly involved with wine infer price expectation more strongly from quality perceptions.”

But what constitutes “attractiveness” varies considerably and depends on the consumer’s age and his or her experience with wine. Another interesting study, The Influence of Verbal and Non-Verbal Information on the Consumer Decision, by researchers Dr. Gergely Szolnoki, Dr. Dieter Hoffman, and Dr. Roland Herrmann provides evidence that packaging attributes affect different wine market segments differently. It shows that younger consumers (younger than 26 years) with little or no experience with wine are heavily influenced by the bottle form and color when making their wine purchase decisions. On the other hand, older wine connoisseurs (over 45 years) appear to be more influenced by the brand name and country of origin. However, it was also noted that older wine buyers “try to minimize the influence of appearance,” even though subconscious visual cues are at play. Consumers in the mainstream segment (between 30-40 years) look for information on the label, with 60% of their buying decision based on overall visual cues.

Equally interesting, the same study analyzed how verbal and non-verbal factors influenced the perceived taste of the wine, this time dividing respondents into five segments: Younger consumers without experience, price sensitive consumers, older wine connoisseurs, red wine enthusiasts, and older wine drinkers with high income. This time packaging played a significant role in all of the consumers’ perceptions of the wine’s taste, scoring at the top of influencers for all of the study’s respondents.

Testing on the Shelf

While most packaging research is done in focus groups or laboratory settings, some researchers believe that the best way to measure packaging performance is by monitoring consumer behavior in an actual retail environment. An article by Scott Young, who is President of Perception Research Services, entitled Measuring Success: Using Consumer Research to Document the Value of Package Design” and sponsored by The Design Management Institute, found that direct questioning of consumers can be misleading because it’s difficult for shoppers to accurately gauge how much packaging influences their purchasing decisions. In fact, consumers will often downplay the importance of packaging because “they are reluctant to admit that aesthetics drive their purchase decision,” much like the “older wine connoisseurs” mentioned earlier.

Therefore, Young maintains that testing packaging in a competitive context is the best way for marketers to determine the strength of a particular design. Does the packaging enhance or detract from the consumer’s interest in the brand? Does the packaging enhance or detract from the brand’s competitive positioning? “Interestingly,” he notes, “in at least 25 percent of the studies, we’ve found that a brand’s current packaging is actually detracting from brand perceptions, positioning, and preference.”

Because differentiation is the key to success, it’s important to remember that trying to mimic the packaging of a category leader can backfire, not only with expensive legal consequences (see Fundamentals of Trade Dress Protection http://www.escm.com/uploads/publications/traded1.htm) but also by damaging the integrity of your brand and, thus, its power in the marketplace. To quote Young again: “Packaging is unique because it ‘lives’ on the cluttered shelves, and it has to make an impression within the limited time (often only a few seconds) that shoppers typically spend making their purchase decisions.” In other words, good packaging design should always be judged according to how it stands out—not blends in—from the competition.

However, packaging innovation can also be detrimental to a brand so don’t assume your new wine-in-a-pouch will wow consumers. When Skippy peanut butter introduced a new squeeze packaging system, consumers failed to recognize it as peanut butter, negatively judging it as more difficult to open and reseal. According to Young, any new packaging design should be measured on four factors: Shelf visibility (does the new system help the brand break through the clutter); Preference vs. competition (does the brand consistently win against the competition); Price expectation (does the packaging drive higher price expectations); and Satisfaction and usage frequency (does the packaging enhance satisfaction and/or lead shoppers to buy the product more frequently and/or in new situations).

These days, every expense needs to be justified, including packaging. because it can represent a significant portion of your product’s total cost. Therefore, it’s reasonable to expect your new package design to result in a positive ROI.

Is Custom Packaging Worth It?

In my earlier White Paper, How Price Positioning Impacts Your Bottle Choice (http://globalpackage.net/category/news/white-papers/), I discussed how the Four Ps (Product, Price, Place, and Promotion) influence the bottle you select for your wine, especially the price point at which your wine will be sold to achieve a sustainable profit margin. Of course, quantifying the value your packaging will have on sales is difficult to determine. However, some studies have attempted to do just that. One, in particular, a 2010 research paper based on real market observations, by Simone Mueller and Gergely Szolnoki—“Wine Packaging and Labeling; Do they Impact Market Price (in the US)?”—is worth noting.

Here are a few salient excerpts:

- Story or history information on the front label resulted in a price premium of $1.64, while additional wine specific information, such as estate grown, single vineyard, reserve or old vine attracted a premium of $3.22.
- Packaging characteristics follow as second most important in determining a price premium, specifically label style and label color.
- Packaging can be related to 42% of predicted price differences.
- Packaging and front label information contributes to price in the U.S. by 8%.
- Origin has the largest impact on wine prices.
- Wine packaging is almost as important as origin as it relates to price differences.

What about the bottle? Apparently size and shape do matter, not only in consumers’ perceptions, but also in their willingness to pay for a higher priced wine. For instance, results in the above research found that red wine in Burgundy bottles sold at $1.41 above average while Bordeaux bottles attracted a discount of $1.31, probably because of the subconscious association in the consumer’s mind of a Burgundy bottle with higher priced wines. While it’s generally estimated that the cost of the bottle is less than 10% of the price of the wine, the cost obviously goes down when the volume goes up. We also know that more expensive wines generally have expensive packaging, which has imprinted a correlation in the consumer’s mind between price and quality. Of course, bigger, heavier bottles are also generally regarded by winemakers to be better for aging wines, which also means wine aficionados are willing to pay more for wine in a heftier bottle.

While the industry’s recent focus on the environment has resulted in lighter-weight bottles, this doesn’t mean that aesthetics are compromised. In fact, innovations in glass production have created lightweight bottles that have the same forms and colors as traditional, heavier styles. Global Package’s Elegant Light line of bottles is a good example. These bottles provide the same aesthetic, but with lower manufacturing and shipping cost, hence reduced environmental footprint. Our new Fiona bottle and the soon-to-be released Claire are great examples.

The Fiona boasts a daring look with a bar top and strong shoulders. It has the appearance of a heavy bottle with presence, but, in fact, weighs only 600 grams. The top can have a traditional tin foil closure and the height is comfortably just a bit taller than a standard bottle. It’s a perfect partner for other tapered bottles and for coupling with an elegant burgundy shape.

The Claire is an elegantly appointed Burgundy bottle that will be available in Spring 2012. It’s an addition to the handsome line of lighter-weight, larger-neck bottles. Its curvaceous lines make it sensually appealing, with a label area that’s extended for labeling presence.

Bottle Embellishment

As wine and spirits producers look for new ways to individual their products, the Glass Packaging Institute recently noted that there’s been renewed interest in embossing glass bottles. Here’s a bit of background:

Prior to the development of inexpensive paper labels, food and beverage producers often relied on embossed glass bottles to carry the name of their brands from store shelves to consumers’ pantries. In fact, from the mid-19th century until the early 20th century, embossed glass bottles were ubiquitous, the product of their functionality as much as their aesthetic appeal.

In recent years, embossed glass bottles have been making a comeback. While the process never fully went away, brands looking to separate themselves from the pack have begun to utilize the process more aggressively, in some cases doing away with paper and painted labels entirely.

A favorite designer, Barrie Tucker of Barrie Tucker Company, with whom I’ve worked for many years has distinguished himself with gorgeous embossed designs on bottles, creating one-of-a-kind packaging for such renowned brands as Stag’s Leap and Voss Vineyards in the US, Mission Hill Winery in Canada, Nautilus in New Zealand, and Penley Estate, Yalumba, and Greg Norman Estates in Australia, among many others.

A recent project for two Australian Smith & Hooper Merlot brands entailed creating the Smith & Hooper logo in a sophisticated, flourishing script, which was embossed across the shoulder of the bottles, as well as featured on the label. His S&H icon design was debossed and then embossed in a diamond shape into the front surface of the bottles. For the super premium, limited edition Merlot product, the S&H icon was also be acid etched, giving it a superior quality appearance and a point of differentiation between the two products. You can find a case study describing the Smith & Hooper project here: http://globalpackage.net/category/news/case-study/

As mentioned in our previous White Paper, the price you pay for the bottle, as well as the customization of your packaging elements, has to be considered in view of your pricing strategy. Bottle embellishments will cost more as will unusual label configurations and substrates, so it’s important to start at the end—determining your wine’s price point—and then work your way back through the production cycle to establish your packaging budget. That said, there are always ways to reduce some costs while preserving a portion of your packaging budget to create a unique package.

For instance, with the incredibly wide range of bottles that are in stock and readily available, you are likely to find a bottle that suits your brand and budget without incurring the expense of creating a new mold. You can also save by selecting a lighter weight bottle in the same shape and color as one that’s heavier and more expensive.

Of course, the expertise Global Package brings to your project will ensure you reap the benefits of custom packaging, without breaking the bank.

A new just-drinks/IWSR report has found that non-Scotch whiskies, comprised of US Bourbons and Irish, Canadian, Indian and Japanese whiskies, have been bucking the recession with an impressive compound annual growth rate (CAGR) of 6.9% due to their innovation in the cocktail space. Flavored whiskies, such as Jim Beam’s Red Stag, are particularly popular among new consumer segments like younger adults and women. Bartenders, too, are experimenting with these new and old-fashioned flavored variants, like rye and wheat, in cocktails. The US has been especially adept in the Ready-to-Drink (RTD) market by targeting a younger consumer demographic, which has steadily shifted from beer towards spirits. Remember that Global Package has been supplying standard and custom spirits bottles for years. Read a summary of the report here: http://bit.ly/oDEake

Speaking of Innovation (and Sustainability)-

Here’s an update on the revolutionary MBS decanter bottle we featured in our last newsletter. Louis Rapin 2008, an all-natural, sulphite-free Bordeaux ‘micro-wine’ produced from 65-year-old Merlot grapes from Maison Blanche is the first French wine to be bottled in the MBS bottle. Nicolas Despagne Rapin says of the bottle shape: “This is the ideal bottle for enduring wines, it is a flame, it is a fire, a fine elegant woman.” Photo of the bottle is below.

- The glass industry is continuously upgrading processes to reduce its carbon footprint. Last spring, Owens-Illinois (O-I) opened its photovoltaic plant in France equipped with photovoltaic panels that will produce energy “equal to the annual energy consumption of a town with 2,000 citizens.” The company has the goal “to reduce its carbon footprint by 65% by 2017, decrease its overall energy consumption by 50% and increase the proportion of recycled glass to 60% globally.” Click here for more: http://bit.ly/qxGSGu

- Here’s research about the sustainable benefits of green glass over clear glass in all drink categories, from wine to whiskey. The report states that a shift to green (recycled) glass “will cut packaging related CO2 emissions by 20%, and recycling glass back into glass production saves energy and reduces mineral extraction compared to the use of virgin materials. Keep this in mind the next time you’re specifying your glass bottle. Click here for the report: http://bit.ly/oCK1Lz

Color-Blindness and Packaging

Did you know there are approximately 19 million people in the US who are to some degree color-blind? It surprised me and is making me think twice about color selection when advising clients. According to author Carol Kaufman-Scarborough of Rutgers University: “Reds and greens appear to pose the most consistent set of problems; dim lighting makes the problems even worse. Since color-blind persons process color information in a different way from color-sighted consumers, color-distortions can affect their abilities to choose products, to notice information in advertising and on packaging, and to operate effectively in store settings.” She says that while many folks may not technically be blind, there are some colors that are inaccessible to them, appearing instead as a confusing blend of grays. It’s something to keep in mind when designing your packaging. Click here:
http://bit.ly/nBbY8Q

Pricing Your Wine

It can be confusing trying to find a formula that works for pricing a wine these days. There are so many factors that need to be weighed and every year these change. I recently came across a couple of articles that attempted to take on this challenge, one relatively straightforward (“Margin or Markup”) and the other almost too complex to be helpful (“Pricing strategy for wine in today’s marketplace”). I have a pretty simple formula: Your margin is a percentage that’s subtracted from the selling price, whereas your markup is a dollar amount you add to the cost. The topic is important because I often find that clients bring me in to discuss bottles before they’ve determined their wine’s price point, which is an essential first step. For example, a custom 100,000-bottle project with embossing and elaborate decoration cannot retail for $20, unless you want to lose money. You can read our White Paper on the topic here: http://globalpackage.net/category/news/white-papers/ To read the above-mentioned pricing articles, click here: http://bit.ly/g9Cc6q and here: http://bit.ly/pUBxhG
Rebranding? Try Crowdsourcing.

After reading about the GAP rebranding gaff, where management decided to alter the iconic GAP logo only to be inundated by a storm of protest, I thought this was an interesting idea for wineries that are thinking about launching a new brand or regenerating a mature brand. The idea is to begin a conversation with the creative community to elicit ideas. This can take the form of a ‘contest’ whereby creatives submit and collaborate on ideas—be it content for a campaign, a name change, new identity, or design for a label—with ‘winning’ ideas awarded a cash prize. Author, Peter Ryder, on Brandchannel.com suggests the process can yield not only great ideas, but insight about how your brand is viewed in the marketplace. However, a strict and transparent process must be adopted to ensure your creative community perceives this as legitimate and not a scam for you to get something for free. “Make sure you give due credit to participants’ work and if possible, provide a public online showcase for it either during the project itself or afterwards,” he says. Read more about the process here: http://bit.ly/fMiq3T

News ‘n Notes

With a packaging industry growing by more than 14% annually and the volume of discarded packaging increasing by 8-10% annually, China’s cities are in peril of drowning in household garbage. To address the problem, the Chinese government has legislated controls to reduce excessive packaging, the only country in the world to do so (http://bit.ly/nXFTuo) … What will they think of next? Wine comes in cans, pouches, PET bottles, and now the Swedes have come up with the Bag-in-a-Bag wine package (http://bit.ly/pEGhPf) and the French company, Sleever International, has introduced the SkinSleever, tactile coatings created with Helioflex printing technology, which provides a textured surface with the feel of metal, stone, cloth, wood or skin. Photos can be found by scrolling about ¾ down on this site: http://bit.ly/bdWH3I … In view of flagging sales brought on by devaluation of the currency exchange rate, the Australian wine industry is hurting. The iconic Yellow Tail brand has been forced to raise prices and has launched a new rebranding campaign to reposition it not as the low price leader, but as the “go-to” brand (http://nyti.ms/rlYWZv) … Finally, remember that Global Package LLC offers a broad selection of screwcap bottles that are readily available from Europe, including 375mls and magnums.

Having supplied bottles to hundreds of wineries over the 25-plus years, I thought it would be useful to review the key marketing elements that need to be assessed in order to make one of the biggest long-term investments you will make for your winery and its brnad. Here, we review the Four Ps of marketing—Product, Price, Place, and Promotion as it relates to your wine or distilled spirit—and how they specifically apply to your bottle purchasing decisions. Of the four Ps, your retail price is arguably the most important since it will help determine the other elements and vice versa. I maintain that the investment price of your bottle is directly related to the retail price of your wine. Unfortunately, however, setting a price for a wine is not easy because it involves intensive market study and competitive research. This paper will look at ways to manage the cost basis and the importance of identifying sooner rather than later where you want your wine to sit on the shelf and how much you need to invest in your packaging to make that happen.

Product

A realistic assessment of the quality of your wine is the obvious first step in marketing your wine. Some wineries conduct focus groups or hire independent agencies to help them arrive at an objective quality judgment. Your wine’s type or style (young and fruity or age worthy and oaked ), personality (based on a particular winemaker; a specific winemaking philosophy, such as organic; or a famous personage), and the location (terroir or famed destination) all play critical roles in understanding and characterizing your product before you can market it. You also need to identify and understand the market segment where your wine is most relevant. For example, a ready-to-drink white might target a different customer than a complex red. This segmentation is necessary in order to help you differentiate your wine from competing brands on the shelf. Only then can you define the image your packaging needs to convey in order to attract that market segment. In other words, determine who will be making the selection before you design your packaging and messaging for them. And differentiation is critical; don’t play follow the leader. Rather, distinguish your wine and packaging with a careful study of your wine/winery’s own personality and characteristics.

Place

This “P” addresses the many avenues your wine can take to get to the consumer’s table: direct-to-consumer (tasting room, in-house sales team, and website) and through a reseller (distributor, wholesaler, on-premise, and retailer). The logistics of getting your wine in the hands of the right people at the right time can account for a large percentage of your total costs and must be carefully monitored as a factor in your pricing strategy. The more direct your sales the more you have to sell yourself and your values through the package. Therefore, offering extra perceived value with a classic or classy bottle is a smart investment.

Small production wineries have historically had a difficult time getting a distributor to represent them, which is a necessity if you want to grow in the US three-tier system. Therefore, many wineries have put more of their resources toward beefing up their direct sales via wine clubs, festivals, and in-person sales to local bars and restaurants, markets, and events. While time-consuming, it’s a strategy that has paid off for many small producers who boast a great product. But it’s important to select a bottle that is unique and recognizable.

Promotion

This “P” is where all forms of communication come into play, including written, spoken, and visual cues. These communications include everything from point-of-purchase displays, brochures and packaging to print, broadcast, and Internet advertising; direct marketing costs such as e/mailings, ecommerce, telemarketing, etc.; promotional expenses, including social media promotions, contests, tasting events, wine clubs, tie-ins; and PR, including press relations, sponsorships, and community events, among many others. Finally, your image must be consistently carried through in all these communication strategies.

Needless to say, these costs are not inconsequential. Therefore, it helps to map out a detailed framework for your wine, from production through distribution and promotion, with estimated costs at each stage of the plan. But remember your best promotion is the uniqueness of your brand image conveyed through your bottle, which should readily tell your distinctive brand story without the use words. This is what Global Package prides itself on doing really well.

Price

Now comes the hard part: pricing your wine, a fundamental component to its success in the marketplace. If it’s priced too high, you’ll be stuck with unsold inventory; if it’s priced too low, you may see it fly off the shelf, but you may also realize little, if any, profit. Pricing needs to take into account the cost of producing your wine plus a reasonable profit margin. There are dozens of pricing strategies to choose from, and which one you choose will depend on what your goals are. Here’s a short review of some of those strategies when approaching any market channel:

Cost-plus: Here you assess the costs (fixed and variable) to produce your wine and then add a standard percentage of profit (Cost is $10/bottle, plus 20% profit = Price of $12/bottle).

Cost-based: This is a fluctuating price that’s based on the cost of production, distribution, and then on a markup.

Value-based: Here pricing is based on the buyer’s perception, taking into account such factors as quality, prestige, healthfulness, etc., of the value of the wine, rather than on your costs.

Competitive: Your price, whether it’s lower, the same, or higher, is based on what competitors are charging for the same or similar wine. There are several online services that can help you determine competitors’ prices, such as
HYPERLINK “http://www.wine-searcher.com/price-notes.lml” http://www.wine-searcher.com/price-notes.lml and HYPERLINK “http://wineprices.vinfolio.com” http://wineprices.vinfolio.com .

Skimming: This strategy allows you to ‘skim’ the market by layers, initially pricing the wine high to attract affluents and then gradually lower the price to gain a wider market.

Premium: Here the price is set high to reflect the exclusiveness of a wine.

Penetration: The price is set low to increase sales and gain marketshare and, once accomplished, can then be raised.

Psychological: This is a standard pricing strategy based on what ‘looks’ better to the consumer; e.g., $9.99 versus $10.

Discount: A lowered price based on a promotion or advertising campaign.

Bundling: This is a retailer pricing strategy, such as buy-one-get-one-free (BOGOF) bundling.

The underlying premise of pricing a wine is to impart value to the consumer, so it’s essential to know as much as you can about the consumer you’re marketing to. For instance, according to a recent study by Wine Intelligence, the U.S. market can be divided into two simple groups of roughly equal size: the under-45s and the over-45s. The under-45 category, which accounts for approximately 48% of the nation’s wine-drinking population, is comprised of Millennials and Gen Xers, as well as the 21-25 year-old wine drinkers. These younger consumers have very different behavior patterns than their older cohorts in that they’re more likely to try new brands from emerging regions, spend more on a bottle of wine, but drink wine less often (weekly or for special occasions), and purchase a wider repertoire of varietals, such as Pinot Grigio, Malbec, and Sangiovese, and sparkling wines, dessert wines, and port. Most important, these under-45s are actively engaged in the wine experience, participating in tastings, visiting wineries, and attending wine symposia and festivals. Therefore, if you wanted to generally target the under-45 consumer, you could consider pricing your Pinot Noir a bit higher while promoting its suitability for a birthday celebration. Also consider if a retro or nouveaux look might be appealing to this group, which is much less set in tradition.

The over-45 contingent represents 52% of the wine consumers in the U.S. and, while they are possibly less progressive and more cost-conscious, they view wine as an everyday drink and, thus, purchase wine more frequently than the under-45s. Because of family and work obligations, they are also less likely to go out. Therefore, if you’re pricing a Cab or a Zinfandel for this general market, you want to make sure it speaks of value and not premium and pricey. This is the group to give more value for their money.

On the other hand, if your primary sales will occur on-premise in bars and restaurants, your pricing strategy will need to account for the markups these establishments apply. And these resellers also need to be aware of the perceived value of the wine with their markup. On their iPhone or BlackBerry, diners can now find the retail price of a wine being offered and judge whether or not they believe they’re being ‘ripped off.’ Consequently, some restaurants have reduced the huge markups previously seen in the industry to focus more on building trust and loyalty with customers rather than on reaping big profits on their wine sales.

If distributors will play an important role in the sale of your wine, you also need to factor in the costs associated with helping them promote and move your wine off the shelf, since volume is what these folks are all about. This can include a gorgeous bottle as well as carton display costs, shelf-talkers, bottleneckers, banners, etc. These costs, while promotional and not directly related to your wine production costs will cut into your profit margin and, thus, need to be considered. You also should consider other costs, such as free samples, discounts, and other promotional tactics you may employ in the course of selling your wine.

You basically have two routes to grow profits: focus on volume or focus on price. If your strategy is to grow by producing more wine, keep in mind the additional, often significant, sales and marketing expenses that will attend increased production volume. A number of wineries have cut back on volume by eliminating many labels in their portfolio and concentrating on improving their higher-priced, well-established brands. I believe that in order to be profitable in a business that incurs very high product, sales, and marketing costs, this pricing strategy needs to target the highest price tier in the luxury category rather than expanding your product line.

Australia’s Yellow Tail brand offers an instructive case study in pricing. Initially launched in 2001 at the low price of $6 per bottle in the US, sales soared from about 60,000 cases in 2001 to more than 8 million cases today. However, sales have not grown over the past several years due to many factors: the continued strength of the Australian dollar, higher production costs, and tougher competition by a slew of other ‘critter wines.’ To reclaim its momentum, the brand recently launched a $9 million ad campaign promoting Yellow Tail as the “go-to wine, the default option for anyone seeking an everyday wine, something to drink for most occasions.” Even if that strategy falters, it is hard for smaller players to gain traction against such a huge investment. In other words, going against cult brand pricing as an unknown quantity may lead to ruin. In short, knowing the strength of your competitor and developing careful projections is the best way to proceed.

There are so many factors that will impact your pricing decision—what, where, how, and to whom it will be sold—it’s important to have done your homework so that you can more quickly define your optimal bottle package to your suppliers and hit the target the first time. That is why Global Package is here … to simplify the task.

Bottles and Your Brand
Global Package LLC is developing a series of white papers to help customers navigate the complexities of bottle selection. Our first installment, “How Your Bottle Choice Impacts Your Brand,” provides guidelines about what factors you need to consider, including the price point at which you envision your wine selling, is your wine to be stored long-term or immediately consumed, and what style, shape, and color bottle will best reinforce your brand concept. We also just published an instructive case study that details how we worked with a spirits producer on the revival and launch of his unique bourbon brand. Both documents can be found on our website: http://www.globalpackage.net

Vineyard Property Values Around the World
I found this article in the Financial Times both interesting and amusing. Interesting because it compares vineyard properties worldwide. (See the Knight Frank Vineyard Index here: http://bit.ly/kSbwmG). I also loved this amusing anecdote from Viticulture, a group that helps amateur winemakers: “The way to acquire a small fortune is to start with a large fortune and buy an English vineyard.” In short, most wealthy investors in vineyards are “lifestyle” buyers who are more interested in a holiday property than in producing wine. However, according to wine expert, Jancis Robinson, entrepreneurs wishing to pursue the business of winemaking should select a property according to the appellation and the quality and type of grape, not the size or charm of the house that’s on it. Not surprisingly, the Bordeaux region in southern France—currently favored by the Asian wealthy—boasts the most expensive vineyard properties in the world, nearly twice the price of properties in Napa and Sonoma. Whereas the price of many of the established vineyard territories in France and California has fallen, the wine-growing regions in Argentina, Chile, South Africa and other emerging wine-growing countries have shown the most growth in price. Click here for a fascinating read: http://on.ft.com/iq8BEK

Standards of Fill for Spirits
My thanks to Steve Dalbey, of Distillery Code Consulting, who confirmed for me that 500 ml bottles are no longer permitted by the federal code; they were “authorized for bottling (only) until June 30, 1989.” Steve found the information on the GPO Access website in the Electronic Code of Federal Regulations section, 5.47a. You can find current metric standards of fill and other useful information on this site, including tolerances and design and headspace requirements for distilled spirits. Click here: http://bit.ly/iBUtXd

Packaging Trends

Not surprisingly, pop culture, such as Lady Gaga and her over-the-top aesthetic, is impacting packaging design. I came across this great article by Cheryl Swanson on brandchannel.com that takes a look at what consumer packaged goods (CPG) designers need to know about “Trends for the New Decade.” Gilded and baroque designs are winning over consumers in China; educational apps appeal to the binary generation (those techno-tykes who were born after 2000); Boomers are “cross-breeding” with Millennials as college students; and women continue to be the most influential consumers. A good example of a sleek brand that appeals to today’s sophisticated female consumer is Daviana Winery’s Estate Grown Cabernache (pictured at right) that’s designed by CF Napa Brand Design and bottled in Global Package’s Elegant Light Bella burgundy bottle. Swanson explores other trends as well in this well-written and smart overview. Click here: http://bit.ly/mCfWmi

Millennials and Gen-Xers Drive U.S. Wine Growth
The Wine Market Council released results of its 2010 Consumer Tracking Study, which found that, despite the recession, total wine consumption in the U.S. has remained steady, with a slight .9 percent uptick in 2010. Most significant, Generation X adults, those in their mid-30s and early 40s, are leading the charge by incorporating wine into their lifestyles. The Millennial Generation, with its 70 million members who have been less impacted by the economic downturn than the older Boomer generation, are dominating the market. Even better news for the industry, “16 million members of the Millennial generation who have yet to reach the age of 21 gives some assurance to wine marketers of continuing market growth in the near term.” You can purchase the full report and read a summary here: http://bit.ly/mOUDGr

News ‘n Notes
On June 9th, Erica will be speaking on Packaging and Brand Development at ADI’s “Hands-on Whiskey” Workshop in Petaluma. If you’d like to attend, click here: http://bit.ly/cfkRpQ …According to Fortune Brands, its Beam Global Spirits & Wine is being repositioned and renamed Beam Inc. as a standalone division with a pure focus on distilled spirits, no wine, and selling off its golf, and home & security holdings (http://bit.ly/mUsS5Z)
…Winelovesglass.com says that a glass wine bottle is best because it protects taste; is the classic, preferred choice of wine drinkers; is convenient because it can be found in many sizes, including single-serve bottles, with alternative closures for easy opening/closing; is made from all natural materials; and can be recycled endlessly (http://bit.ly/dPp4hd) …The U.S. is talking with South Korea about eliminating its 20% import duty on bourbon and Tennessee whiskey, which could result in a rise in exports to Korea of about $17.6 million per year (http://bit.ly/jEnNO8).