The Emergence Of Craft Brewing – Understanding The Effects Of This Trend On The Labeling Industry

The craft brewing industry is huge in the United States – and shows no signs of slowing down. While domestic “macrobrews” still lead the pack in terms of overall sales volume, craft breweries have been experiencing staggering growth.

In 2012, the overall market cap of the craft brewing industry was $10.2 billion. By 2016, this number had more than doubled to $23.5 billion, and the market shows no signs of slowing down.

The massive growth of the craft brewing industry makes it a huge opportunity for packaging and label-making professionals. Small craft breweries are using innovative labeling techniques, bold designs, and smart technology to create their labels, and the results speak for themselves.

In order to share the nuances of this growing market a bit more, we wanted to break down the growth of the craft brewing market, talk a bit about how labels influence consumer purchasing decisions, and discuss the advanced techniques that small breweries are using to cut costs and increase label quality.

Understanding The Growing Craft Brewing Market

One of the most surprising aspects of the growing craft beer market is that it’s still not dominated by large corporations.

According to a 2015 press release by the Brewer’s Association, the number of breweries operating in the US in 2015 grew by a staggering 15%. At the time of release, there were 4,269 breweries operating on US soil – more than there have been at any other time in history. In addition, 99% of these breweries were classified as “small or independent breweries”.

While multinational brewing companies like InBev, Pabst, and MillerCoors have made inroads into the craft beer market by purchasing craft breweries outright, it’s clear that these independent, small-batch breweries aren’t going to be pushed out of the market by industry titans.

This growth isn’t just in America, either. According to market research firm Grand View Research, the global craft beer market is slated to hit a market cap of $502.9 billion USD by 2025, owing to an increased demand for low-ABV “session beers” and uniquely flavored, small-batch craft brews.

But with so many craft breweries popping up all over the place, how can consumers distinguish them – and make an informed buying decision? The answer? Labels.

How Labels Influence Our Purchasing Decisions

Because the craft beer market is so competitive, labels have a massive impact on the success – or failure – of a particular brand. Chances are that a craft brewer is going to be competing for shelf space with dozens of other craft brewers who are making similar products.

Unique, innovative labels are the easiest way to stand out – and as much as we might not like to admit it, attractive labels do have an enormous impact on our purchasing decisions. When a unique or attractive label catches our eye, we’re far more likely to make a purchase. Consumers really do go for that shiny object on the shelf when faced with so many choices.

This is backed up by data done by research company Package InSight. In the study, a team of students created a beer company called “Steel Monkey” IPA, and created a variety of different packaging designs using diverse labeling materials, including metallic labels, matte film, wood veneer, and clear film, among others.

These beers were placed in an artificial, retail-like space alongside other common beer brands. 193 participants in the study were invited to browse the space, and their eye movements were tracked by a pair of specialized glasses, to allow the researchers to understand what beers they looked at the longest.

The results were staggering. Higher quality materials almost always led to a higher “fixation rate”, and more time spent looking at a particular beer. This correlated with an increased likelihood of purchasing that beer. Advanced materials like wood veneer and metallic labels had the greatest impact on the purchasing decision because they grabbed the attention of the viewer immediately.

This is one of the reasons that the world of craft brewing boasts some of the most innovative graphic design and packaging design to be found – often, these companies only have seconds to grab the attention of a shopper, or else they’ll be left behind.

Craft Beer Labels Are Enhanced By Digital Techniques, Advanced Materials

Remember your older brother’s beer can collection? My, how times have changed? Necessity is the mother of invention, as they say – and craft brewers certainly need to distinguish themselves from their competitors, given how many customers base their purchasing decisions on labels.

Advanced materials are one of the most common ways that craft brewers can differentiate themselves from the competition. Metallic labels, labels with multiple gloss levels, and innovative features like color-changing inks are becoming more common as microbreweries continue to innovate in label design.

Smart technology is another new innovation in packaging design. As technologies like NFC and RFID become more widespread, brewers can easily integrate smart technology in their labels. In the near future, you may be able to learn more about a beer simply by pulling out your smartphone and sweeping it over the shelf – and this could be a valuable way that craft breweries can promote customer interactivity, and increase sales.

Digital printing technology is also proving to be a godsend for microbreweries. Flexographic printing still dominates the beer market at-large, but most smaller breweries simply don’t have the demand required to justify investing in flexographic printing strategy – making digital printing the next logical choice.

Digital printing can allow converters to print very short runs of labels, perfect for one-off beers, and season beer batches, both of which are very common among craft breweries.

And because digital printing requires a very low upfront cost compared to traditional flexographic printing, small batch breweries can afford to purchase high-quality labels, and still remain within a competitive price range.

Pressure Sensitive Glue – Minimizing Cost, Maximizing Efficiency

Pressure sensitive glue is another innovation being used by craft brewers. Unlike traditional “wet” glues, pressure sensitive labels do not require any water or any other activator to adhere to a bottle – simple pressure activates the adhesive, providing a secure hold.

Pressure sensitive glue has a variety of advantages that makes it preferable for small-batch craft brewers.

First, it reduces the time required for changeovers – by simply swapping bottles and labels, a new run of bottles can be labeled quickly and easily, without the extensive setup time required by wet glues.

Second, pressure sensitive glue minimizes waste – and lower waste means lower costs for small brewers. Finally, pressure-sensitive glue is much easier to deal with when brewers are creating labels of different shapes, sizes, and styles.

For these three reasons, more craft brewers than ever are turning to pressure sensitive, self-adhesive glues. In North America, 32% of all labels are now pressure sensitive, and the market continues to grow.

Understand The Techniques Used In Craft Brewing – Understand The Future Of Packaging

Hopefully, this article has been helpful to provide insight into the innovations that the craft brewing world holds in the world of label making and packaging. Craft brewing is certainly going to continue to be a large market in the packaging industry, as demand is slated to continue growing until at least 2025.

In the packaging and printing industries, these trends  – digital printing, innovative materials usage, and pressure-sensitive glue – could hold the key to the future of the packaging and label making world.

So enjoy craft beers, enjoy their labels, and take note – that beer you’re holding could be the key to the success of your packaging company.

About TGW International:
With a legacy that dates over 100 years, TGW has been at the leading edge of innovation in the machine knife industry. We are front and center with the latest industry trends and emerging technologies in the packaging, processing, printing and converting industries. We’ve also been known to hoist a few well-labeled bottles and cans ourselves (purely in the name of research and innovation)…Cheers!

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