2016-05-04

Fine spirits on the Internet?

The packaging industry is in flux. New distribution channels need new packing concepts. Spirits and liquors, a high quality product group, are of particular interest in this respect: how will they fare on the Internet? Pro Carton discussed the development in the spirits segment with the winners of the Pro Carton ECMA Award.

As clearly shown by the Pro Carton study on “Multichannel Packaging”, the retail trade is looking for new ideas for various retail channels, ideally made of cartonboard. The market for high quality spirits has proved to be of special interest: the reason being, they need to make a convincing appearance as high quality gift packaging in multichannel distribution.

Over two thirds of all spirits are sold as gifts or for guests. This was confirmed by the result of a study conducted by Ipsos Observer on behalf of the STI Group: it is quality that counts – especially the packaging. Consumers are willing to spend 13 percent more for an attractively packaged product, and even 27 percent more if glasses are included.

Gift packaging is the trend
The Internet has added to the significance of gift packaging: gifts can easily be sent directly to recipients. This implies that your products have to look their best on mobile devices. Virginio Scalabrin, R&D Manager at Lucaprint in Italy: “The best way to convey good wishes is by deluxe packaging. And what could be better than personalised carton packaging? Besides the contents, the carton itself will be a long-lasting icon of beauty.”

Geert Verlinden, Group Innovation Manager at Van Genechten, foresees a virtual boom for gift packaging: “We are constantly pressed for time and thus buy ready packaged products to give as gifts to family and friends. This is much easier than buying products and packaging them nicely ourselves. The branded goods industry has got the message.”

Personalised packaging and smaller editions
Special smaller editions and personalisation are very much associated with gift packaging. Increasingly, buyers can have their personal portrait affixed to a product, be it in-store or online. Limited editions with special themes or for regional target groups are extremely en vogue. Scalabrin: “The use of digital printing is already fairly widespread due to the great demand for special solutions. Today, many products are already packaged specifically for events, fairs, competitions or jubilees.”

Martin Glatz, Head of Sales, Marketing, Research and Development at Karl Knauer, underlines this aspect: “There is no doubt that production runs are getting shorter and more specific to target groups. This does not necessarily imply that this can “only” be achieved with digital printing. It is certainly possible to produce even small editions with numerous motif changes cost-efficiently. But of course, we will be entering completely new dimensions in packaging with digital printing in future, and unique design series or personalisation will be found more often both on the shelves and online.”

The Internet Point of Sale
68 percent of those purchasing spirits make their decision at the POS. So, what happens if the POS moves to the Internet? At present, the sales of spirits via the Internet have a share of 4 percent, but this is growing fast. And this spells new challenges for packaging.

“The new trends are making new demands on packaging. Extended communication platforms will guide consumers to the desired product via packaging. This includes numerous approaches of connectivity, from scanning codes or Augmented Reality, through to real interaction between packaging and Smartphones (Touch Code or NFC)”, says Geert Verlinden.

But it is not only communications that are changing. “The way we buy is changing. Consumers are increasingly purchasing online, therefore presentation not only needs to be attractive “on the shelf” but also on the screen (Screen Impact). Buyers must also be informed on easy re-ordering of products via mobile devices. In addition, consumers need to be convinced of the quality of the product. Products purchased online are delivered to the home, and we therefore need more robust packaging to protect the product across the entire supply chain, to ensure it keeps looking good.”

Claudia Rivinius, Marketing Manager at the STI Group, adds: “Customers buy packaging, not products. This is why we will need so-called “Ready to ship” packaging which can meet the increased demands for product protection both in the retail trade and Internet logistics.” Martin Glatz has a similar view, and adds: “Packaging can be different for each channel, but not necessarily. Aspects such as suitability for shipping, size, function, value communication may be weighted differently.”

High quality design – also inside
In the multichannel age, the experience of unpacking counts – in part this is decisive in whether the product will be chosen again. Verlinden: “The experience during unpacking has become very important, because this is the opportunity to appeal to the customer. In other words: the interior of the carton becomes more important than the exterior!”

This is why the quality of finishing, both inside and out, cannot be high enough. Bob Houghton, responsible for marketing at Multi Packaging Solutions in the UK, highlights how many options are available nowadays: “There have been a number of interesting developments in packaging over recent years. The market is increasingly using board-to-board laminates which combine two carton components to a robust construction. The inner flaps are glued to avoid the “rough” edges of the unprinted carton and a quality finish is added for premium brands of spirits.”

Martin Glatz summarises: “First of all, packaging must deliver quality in the home during the “Second moment of truth”. The brand must prove convincing through impressive handling (convenience), during opening, dosage, resealing, or an impressive product presentation (unboxing, product is the hero, staging). We believe that packaging will increase in importance due to the growing e-commerce environment, as it plays a major role in creating a positive image for the brand after purchase.”

Showcasing with cartonboard
Gift packaging, customised short runs, communication elements, the unpacking experience: seen as a whole, these all make up the showcasing of a product – and this has always been a domain of cartonboard. Nothing masters the dramaturgy at the Point of Sale better than carton packaging, whether in the stores or on the Internet.

This is why the market for spirits is especially interesting, as this high value product group can no longer rely solely on high quality in-store presentation. The staging of packaging is becoming even more important in the realm of electronic media: and this is where the future potential lies! Combining sustainability and exciting dramaturgy makes a convincing argument in favour of carton packaging.


Pro Carton members, patrons, partners

Barcelona Carton
WestRock
RenoDeMedici
Storaenso
WEIG-Karton
Metsä Board
Mayr-Melnhof Karton
Mel
Kartonsan
International Paper
Iggesund
Fiskeby
CAREO, Reno de Medici and Cascades
Buchmann Karton
Billerudkorsnas
Kotkamills
BOBST
Heidelberg
Sappi
ECMA