As you’re launching a wine or spirits brand, or introducing a new product within an existing brand, you are constantly running the numbers to ensure the product’s profitability. That’s smart business.
As you’re looking at spreadsheets, we’d suggest you consider packaging not as a product expense, per se, but as a marketing opportunity.
An exceptional bottle that expresses the brand’s essence is the most powerful marketing tool a wine or sprits brand has. Packaging is often called the “silent salesperson” because it can speak directly to the customer from the store shelf, exerting an emotional pull that encourages them to buy. According to BXP magazine, packaging generates a much higher return on investment (ROI) than a conventional advertising campaign.
What’s more, packaging costs are leveraged over time and the number of units. Once you’ve made the investment, a distinctive bottle and label design promotes the brand for years, and consistently catches the consumer’s eye again and again. Design fees are a one-time spend, and per-unit bottle and materials costs decrease as the production run increases.
Because packaging endures—unlike a social media campaign you can change with a few clicks—it’s essential for wine and spirits brands to get it right. Here are some considerations as you’re scenario-planning for product costs and revenue projections:
1) Consider packaging not a product cost, but a marketing cost. Still an expense, yes. But when you think of packaging as one of your brand’s most effective marketing assets, you’ll see its potential to drive sales instead of its effect on your cost of goods sold (COGS).
2) Design is a fixed expense that generates value multiple times over its cost. Alongside product development, the resources you devote to packaging have the greatest potential to increase revenue. A quality product bottled with an uninspiring label will never have a chance to connect with an audience.
3) Once they pick it up off the shelf, they’re virtually guaranteed to buy. Research has shown that simply picking up a product increases the likelihood that a consumer will purchase it, and increases the price they are willing to pay. Superior packaging justifies a higher price point in the consumer’s mind.
4) Marry great design with cost-effective materials. While some of our most stunning work involves specialty materials and complex print and manufacturing techniques, we’re savvy about putting off-the-rack materials to work as well. Our box design for Crazy Cock Whisky, a brand new spirits brand out of India, features a beautiful web of illustrations and graphic motifs along with fanciful typography, all layered together to tell the brand’s story. The box itself? An inexpensive standard cardboard container.
5) Look to economies of scale. For example, the global fine port brand W. & J. Grahams hired us to create a beautiful and celebratory package for its commemorative bicentenary edition of its late vintage Port. Our design for the gift box featured custom-designed marbled paper based on books in the winemaker’s historic library. Thanks to a large production run (the release sold millions of units) the package was cost-efficient. Groundbreaking sales and rave reviews — wine journalist Matthew Jukes called it “one of the most beautiful wine giftpacks of all time” — generated positive ROI.
More than a container for the product, packaging is a means to attract new customers, elevate perception of the brand, hook repeat buyers and create fans, and enter new markets. Consider its bottom-line potential, and allocate resources against it. Understand what price category you anticipate competing in and then back out the COGS.
With product packaging, brands might see one of two outcomes: You either overspend on packaging or you undermine your product’s success and consumer confidence in the brand because you didn’t invest enough in packaging. We’re here to help you make the right investment.