Four Design-Driven Trends Sweeping the Adult Beverage Category

Innovation | 05-07-2018

Competition among adult beverage brands has reached a fever pitch as more new entrants pour in, even as category growth slows. In the beer category alone, manufacturers launched 1,400 new offerings last year—and for good reason. Consumers appreciate the swift pace of beverage-alcohol innovation, as 62% of in-store buyers pause to peruse the available options rather than pre-committing to a specific brand.

With so many consumer eyes browsing the myriad of options on store shelves, those seconds of consideration are pivotal for brands. Among hundreds of offerings, is the package quickly grabbing consumers’ attention? Once a consumer notices a package, do they feel compelled to give it a try? In an environment with an ever-growing roster of choice, alcoholic beverage manufacturers are steadily being reminded that appearances matter.

Moreover, compared with other fast-moving consumer goods (FMCG) categories, adult beverage brands rely more heavily on the decision-making that happens in brick-and-mortar environments. While the pull of e-commerce is inevitable, alcoholic beverage sales have been slow to ramp up online, due to a variety of factors including social responsibility and regulatory restrictions. While one-fifth of U.S. consumer purchased groceries online in 2016, only 8% had purchased alcoholic beverages(1). In the absence of other information, such as customer reviews, in-store buyers rely even more heavily on how a product looks when choosing between alternatives.

In this design-driven environment, alcohol beverage brands are relying on the power of effective packaging to help them retain current buyers, attract new audiences and command higher price points. Below, we outline four design-related trends that are currently playing out in the alcoholic beverage industry.

Millennials are highly influenced by great package design

Across every FMCG category, Millennials are more likely than their older counterparts to consider alternative products when making purchase decisions—68% to 54%, respectively. This difference is even more pronounced when it comes to alcohol purchases, with 74% of Millennials keeping an open mind at the shelf, compared with only 57% of older consumers(2).

Additionally, when asked in a recent consumer packaging attitudes survey if they have ever purchased a product based solely on its visual design, 68% of Millennials said yes, compared with only 45% of older consumers.

While package design is an excellent motivator when convincing consumers to try a new product, it can also be the clincher in persuading them to ditch a product they had been using in favor of a new alternative. When asked why they had recently switched brands, 22% of Millennials reported that they favored the new brand’s packaging—compared with only one-third of older consumers who said the same.

Brands are leveraging new looks to justify a price increase or encourage consumers to trade up

As consumers’ interest in craft and premium alcoholic beverages has grown, brands have realized the extent to which package design can influence brand perceptions and persuade consumers to pay a higher price. Among consumers who have purchased a product based solely on its package design, 34% of Millennials and 22% of older consumers reported paying more than for similar products.

In recent years, many alcohol brands have redesigned their packages to boost premium perceptions. For example, Buchanan’s Scotch Whisky redesigned its package in 2015 for the first time in nearly 25 years, creating a more modern look that better reflected the premium quality of the product inside the bottle to younger generations. The brand’s 360-degree advertising campaign focused exclusively on the packaging while reminding consumers that the product remained the same. Despite knowing that the product itself hadn’t changed, consumers were willing to pay a higher price, ultimately helping to drive a 20% increase in Buchanan’s value growth across markets in the year following the redesign(3).

Buchanan's redesign

Similarly, Robert Mondavi Private Collection recently redesigned its package, adopting a sleek, black label. The brand aimed to target “crossover consumers” who tend to purchase wine in lower price tiers but might be willing to trade up based on the bottle’s new, more compelling look. In the year following the redesign, the brand saw a 14% lift in sales(4).

Mondavi redesign

Brands are designing their packages to attract new buyers without alienating core customers

In the case of Buchanan’s scotch whisky, the brand sought to attract younger consumers who perceived Buchanan’s to be “my father’s whisky” without turning away older consumers with strong brand loyalty. To achieve this, the marketing team, in conjunction with their design agency, kicked off a rigorous investigation to understand which design elements were core to the brand and how they could modernize them without erasing what made them distinctly “Buchanan’s.”

Redd’s Apple Ale, a hybrid beer-cider offering, launched with the intention of attracting more women and non-beer drinkers to the brand without alienating male beer consumers. The package design emphasized the core proposition, “crisp like an apple, brewed like a beer,” with a gender-neutral color scheme, apple imagery, and a typeface consistent with that of other beer brands. Redd’s Apple Ale attracted nearly as many women as men and sourced 50% of its volume sales from outside the beer category.

Broad design exploration is driving results at shelf

A Nielsen analysis of more than 90 client package redesign initiatives revealed an interesting finding: as the number of package designs evaluated in consumer testing increases, so too does the performance on key packaging metrics such as consumer preference and stand-out. In fact, optimized package designs—based on broad creative exploration—result in an average forecasted sales lift of 5.5%. The unfortunate reality is that most brands evaluate three or fewer design directions, while only 15% explore more than four options(5).

By comparison, Robert Mondavi Private Collection explored 22 potential design directions before settling on its winning design.

Improvement over previous pack design

The now-ubiquitous Dark Horse, a wine brand launched by E. & J. Gallo in 2015, described their design exploration as “relentless.” Dark Horse is offered at an approachable price ($8-$11), but the packaging needed to convey the premium quality of the liquid inside so that consumers would be pleasantly surprised upon discovering the low price point. To get the design just right, the team explored hundreds of design options, including both close-in and disruptive, far-out options. During its first year in market, Dark Horse generated $61 million in sales, crediting its on-point package design as the primary driver of trial.

Given the immense power of packaging to grab attention and influence brand perceptions, beverage-alcohol brands are increasingly regarding it as a cornerstone of their marketing strategies. To learn more about developing package designs that win at the shelf, download 5 Best Practices for Developing Breakthrough Package Designs.

Methodology

The insights in this article were derived from:

  1. Nielsen Consumer Connected Commerce Study, 2016
  2. Nielsen Consumer Packaging Attitudes Survey, November 2016
  3. Nielsen, “7 Brand Stories from the Design Front Lines,” May 2017
  4. 2018 Nielsen Design Impact Awards
  5. Nielsen, “Packaging Sells,” 2015

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