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The Difference Between Premium vs Luxury Product

Consumer products companies throw around the terms ‘luxury’ and ‘premium’ almost interchangeably. But the categories are actually quite different, and those differences are meaningful when it comes to product packaging.

Premium refers to a higher-quality product within a range. In the wine and spirits market, that might be a wine that carries a single-vineyard designation or is of an older vintage, or a tequila that is made in a small town or is extra-aged.

Luxury is more a matter of perception in the consumer’s eyes. While a luxury product may (or may not) be of superior quality, the designation is a marker of status.

Luxury products tend to be rare, unique, pricier, and positioned for aficionados or collectors. Luxury wines and spirits are those marquee bottles that might be exclusively sold through auctions, winery/distillery clubs, or invitation-only events. For consumers, finding luxury products is all about the chase, and displaying these sought-after bottles signals to others that they’re savvy enough and have the means to buy.

Because luxury relies on exclusivity, brands necessarily must limit volumes of sales on these products. Naturally, the luxury brand is not intended to be accessible to everyone.

On the other hand, a premium brand can be widely sold through a range of channels and generate above-average sell through. Features such as better quality or materials, or service, or process justify the premium designation.

In other words the difference between premium vs luxury is that, ‘premium’ has to be justified (commonly by quality), while ‘luxury’ is more about perception, desirability, and status.

How Packaging Distinguishes Premium Vs Luxury Products

Packaging plays a significant role in distinguishing the difference between premium and luxury products.

For premium wine and spirits brands, packaging is all about visual storytelling: Creating a narrative about the product, the producer, their devotion to quality and craft.

That means using visual elements like typography, pattern, and illustration to communicate the brand’s essence. And because the premium product carries a higher price point than its down-market competitors, brands are smart to leverage high-end materials and production — rich paper stock for the label, eye-catching die cuts and textures, designs embossed in the bottle itself — to convey quality. The right kind of detail signals that this is a product that’s special and worth the price.

For luxury brands, the sky’s the limit when it comes to product packaging. Because you’re playing to the consumer’s interest in status symbols, luxury alcohol packaging should be one-of-a-kind and over-the-top.

How over-the-top can you go? We think the Craft Irish Whiskey Co. set the bar quite high with their limited-edition Emerald Isle Collection, which includes two bottles of their prized 30-year-old single malt Irish whiskey — plus two (!) bespoke creations from Fabergé (an enameled egg containing an astonishing uncut emerald and a one-of-a-kind gold watch) — along with a few other goodies, all enclosed in a handcrafted walnut box. Seven of the sets were sold through private auction, starting bid US$2million. Now that’s luxury alcohol packaging.

You may not aim for that kind of exposure (or price point or consumer). But if you manage a luxury spirits or wine brand, consider the full experience that a consumer has with the product, from unboxing to opening to pouring. Luxury packaging should engage the consumer in a physical and emotional way.

Rather than simply a matter of choosing a bottle shape and designing a printed label, luxury alcohol packaging is more product design than graphic design:

  • How can we create a vessel that demands to be put on display?
  • How can we design an enclosing box that becomes part of the experience of the product?

Luxury spirits brands, especially, are turning to cut-crystal bottles and presentation cases with special gifts inside so the consumer feels like he’s opening a gift. For these brands, cost isn’t a driver of luxury packaging design; it’s all about perception and experience, and exclusivity.

Premium or luxury, a great wine or spirit deserves an outstanding package. The difference between premium and luxury is a function of the liquid itself. But brands need to know exactly what space they’re playing in — and to be very intentional about how they define, market, and package their products.

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