SOURCE: O-I Glass, Inc.
DESCRIPTION:
Brands matter. In the spirits market, it’s incredibly clear how brands – and especially premium brands – seek to differentiate by connecting with consumers through packaging, which translates into pricing power. Complexity, luxury and premiumization are watchwords in this space, but another major demand is sustainability.
O-I’s recent online conference, “Rethinking Spirits Packaging: Sustainable Premium,” saw experts from the worlds of investment, consultancy, design, manufacturing, and brands seek to square the circle. They offered a vision of the future which provided the best of both worlds: packaging that is both premium and sustainable.
Packaging Must Connect with Consumers
Spirits have shown remarkable resilience during the pandemic, said Sanjeet Aujla, beverages analyst at Credit Suisse. The industry has been delivering faster growth than others in recent years and is well balanced across both developed and emerging markets.
“Consumers want to be seen to be drinking certain brands as it says something about themselves to others and this has become increasingly important in the new Instagram generation,” he said. “This emotional connection gives the premium brands pricing power.”
In this context, the look and feel of the brand’s packaging and the way that packaging conveys the story behind the brand play a vital role. Adam Ryan, the head of Pentawards, illustrated the brand trends that capitalized on this message. Picking examples such as Pridem’s Gin, Old Nick Rum and Airco Vodka, he showed how brands were using nature and character to convey a sense of fun and personality, while others were opting for simple, minimalist design to highlight their sustainable credentials.
At the heart of all these design trends was the sense of packaging as art, a means of connecting with consumers. “Packaging has become more valued and talked about. Putting an emphasis on beautiful packaging, rather than utility, encourages consumers to keep the pack rather than throw it away.”
Brands Commit to Sustainability
David Feber from McKinsey echoed the sense that the drive to personalization and customization in the premium segment was here to stay long after the pandemic. However, Feber’s main thrust was another megatrend: consumer concerns about sustainability are shaping the packaging value chain.
While he believed brands and retailers are deeply committed to improvement, he also cited consumer confusion, the acceleration of regulation, critical gaps in the supply chain and the strong premium on recycled raw materials as potential barriers to their progress.
There are currently over 400 different Extended Producer Responsibility schemes proposed around the world and many may have unintended consequences. Feber believes packaging companies and brand owners must speak up: “One constant is that the more packaging producers and brands are involved in the formulation of regulation, the better the schemes tend to be.”
Consumers largely recognize glass packaging’s sustainable benefits. In a survey of over 10,000 consumers from 10 countries, McKinsey reported that, across the board, glass and paper-based cartons were seen as the most sustainable; multi-substrate packaging was viewed as the least sustainable.
Your Bottle is the Shop Front in an E-commerce World
The pandemic also accelerated online sales, including in the spirits market. Feber said that e-commerce is likely to account for around 10% in grocery category and that the channel requires stronger, direct to consumer design and a level of communication different than when the consumer picks a pack off the shelf.
Ryan emphasized how vital it is that each brand considers how it looks online and on social channels, not just in-store. “We buy without touching the product. Packaging is now the new shop front for many brands,” he said.
Balancing Premium and Sustainable
Glass is beautiful and iconic. You can turn it into shapes. Glass has long been the packaging choice for brands who want to project premiumization. Glass is also the material of choice for brands who recognize its earth-friendly benefits, like its endless recyclability.
O-I’s new Contemporary Collection answers the need for spirit brands who want to tell a story of premium sustainability. The new range of premium spirits standards takes three of the most popular premium spirits bottle shapes and makes them available in small quantities, with a high recycled content and with a lighter variation which saves 20% of the weight of the traditional version. We like to say it’s sustainable packaging without losing the glamour.
Motivated by the need to position a new offering as premium, while also reinforcing the sustainability ambitions, Jacobite Spirits’ Jamie Smith turned to our team at O-I Glass to launch the brand’s new clear spiced rum, Charlie’s Chopper Clean Cut. The bottle is 30% lighter than those used for its more established brands. The packaging is created in Scotland, just 30 miles from the distillery in Glasgow, which creates a local, sustainable loop, helping Jacobite demonstrate its own sustainability journey.
Leveraging the capability of O-I: EXPRESSIONS to create small runs also allowed the small distillery to tell its story through its bottle. The design captures the rebellious history behind the Jacobite brand and gives a pack which is great for a bartender to use, stands out on the shop shelf and stands out for a customer to choose online.
Brands That Last
As Adam Ryan concluded, “Businesses and brands that use their own waste, are sustainable, that are connected, that are using e-commerce in an immersive way, have a real purpose, understand the consumer’s mindset and that integrate these insights into the packaging of their products will be the ones that last.”
At O-I, we are reimagining the glass-making process with innovations like O-I: EXPRESSIONS to help our customers meet their own sustainability missions. Brands no longer have to choose a side between premium and sustainability. The future embraces both.
KEYWORDS: NYSE:OI, O-I Glass, sustainability, spirits
