The craft distillery market is extremely competitive. We take a look at the state of the industry, where it's trending, and how that impacts your label and packaging decisions.
3. Spirits
Are
Growing
Total
revenues
from
dis1lled
spirits
were
$22.2
billion
in
2013,
or
34.7%
of
the
total
alcohol
market
revenue.
– Total
volume
produced
grew
1.9%
to
206
million
cases.
– Total
revenue
grew
4.4%
or
$928
million.
Source:
Dis)lled
Spirits
Council
4. State
&
Local
Revenue
The
beverage
alcohol
industry
contributed
over
$21
billion
directly
to
state
and
local
revenues
during
2010.
– Dis)lled
spirits
accounted
for
over
$8.8
billion,
or
41%
of
this
direct
revenue.
Wait…
41%
revenue
from
34%
market
share?
Source:
Dis)lled
Spirits
Council
5. Spirits
Taxes
Are
Very
High
Dis1lled
spirits
are
one
of
the
highest
taxed
consumer
products
in
the
U.S.
– Federal,
state
and
local
taxes
account
for
54%
of
the
average
$14.50,
750ml
boXle
of
80
proof
dis)lled
spirits
in
the
U.S.
Source:
Dis)lled
Spirits
Council
11. Explosive
Growth
–
Your
Compe))on
In
the
last
6
years
in
the
U.S.
there
has
been
a
5-‐fold
growth
in
craP
dis1lleries.
– The
number
of
new
entries
into
cra$
dis)lling
is
doubling
every
3
years.
– All
50
states
now
have
opera)ng
cra$
dis)lleries.
Source:
Sonoma
County
Cra$
Beverage
Report
2013;
American
Dis)lling
Ins)tute;
Dis)lled
Spirits
Council
12. Over
400
Fully
opera)onal
small
dis)lleries
in
the
U.S.
right
now
13. Explosive
Growth
–
Your
Compe))on
The
projected
number
of
craP
dis1lleries
in
the
U.S.
is
expected
to
grow
to
over
1000
in
the
next
7
years.
Source:
Michael
Kinstlick,
Coppersea
Dis)lling,
LLC
14. Explosive
Growth
in
WA
There
are
80+
craP
dis1lleries
in
Washington
State
alone.
Dozens
are
awai1ng
license
approval.
– There
were
ZERO
cra$
dis)lleries
in
Washington
State
in
2008
prior
to
deregula)on.
Source:
Becky
Monk,
Puget
Sound
Business
Journal
15. Consumers
Have
Many
Choices
There
were
more
than
220
flavors
of
dis)lled
spirits
in
2012.
There
were
739
new
products
brought
to
market
in
2012.
– Including
171
vodkas,
22
rye
whiskies,
53
Irish
whiskies,
163
cordials,
40
tequilas,
and
36
gins.
Source:
American
Dis)lling
Ins)tute;
Dis)lled
Spirits
Council
16. What’s
Being
Produced?
52%
of
craP
dis1lleries
are
producing
whiskey.
Vodka
is
not
far
behind.
Most
new
craP
dis1lleries
are
focused
on
producing
Vodka,
Gin,
and
Rum.
40%
of
all
spirits
products
in
the
U.S.
have
a
non-‐tradi)onal
flavor.
Source:
American
Dis)lling
Ins)tute;
Dis)lled
Spirits
Council
18. Whiskey
Was
Big
in
2013
Source:
American
Dis)lling
Ins)tute;
Dis)lled
Spirits
Council
Whiskey
accounted
for
80%
of
industry
volume
growth.
Flavored
Whiskeys
accounted
for
45%
of
total
Whiskey
volume
growth.
Whiskey
revenue
rose
10%
($634
million)
to
$7
billion.
Tradi)onal
Whiskey
accounted
for
80%
of
Whiskey
revenue
growth,
but
all
major
Whiskeys
grew.
129
New
Straight
Whiskeys,
53
New
Bourbons
in
2013.
20. Brand
Posi)oning
Brand
Posi1oning
is
the
star1ng
point
for
the
development
of
all
your
marke1ng
elements.
– Build
your
marke)ng
and
sales
efforts
around
a
core
message:
Who
are
you?
What
makes
you
different?
21. The
Role
of
Your
Brand
Your
brand
defines
what
you
stand
for.
It’s
what
makes
you
compe11ve.
– How
do
you
want
consumers
to
view
your
product,
compared
to
your
compe))on?
– What
is
the
single
most
compelling
and
persuasive
reason
to
buy
your
product?
22. The
Advantage
of
a
Strong
Brand
Brand
posi1oning
creates
an
enduring
and
sustainable
compe11ve
advantage
based
on
the
percep1on
of
superiority.
“Safe”
“Fresh”
“It
Runs”
23. Brand
Consistency
is
Key
Your
sales
and
marke1ng
efforts
need
to
be
consistent
with
your
brand
to
reinforce
your
posi1on
and
not
erode
it.
– Great
brand
posi)oning
is
simple,
single-‐minded,
consumer
focused,
and
easy
to
leverage.
– Great
brand
posi)oning
differen)ates
you!
25. Grab
their
aXen)on!
Consumers
are
bombarded
by
1,500
ads,
labels
and
logos
per
day.
How
will
your
packaging
resonate
memorably
in
this
sea
of
visual
informa1on?
– You
have
about
8
seconds
to
catch
and
keep
the
aXen)on
of
today’s
busy,
distracted
shopper.
26. Packaging
Effect
On
Consumers
Your
packaging
is
the
only
adver1sing
for
your
product
100%
of
your
customers
will
see.
Strive
to
make
a
good
first
impression
and
a
las)ng
impact.
Photo
credit:
Steven
Lane
28. Packaging:
Glass
What
to
look
for:
– Quality
of
the
boXles
• Able
to
accept
closure
consistently
• Able
to
be
labeled
consistently
–
Cheap
/
thin
glass
can
have
defects:
• Not
flat
(wavy)
• Pronounced
seams
• Out
of
round
necks
29. Packaging:
Closure
What
to
look
for:
– Ease
of
use
• Func)onal
• Reliable
• Easy
to
use
(for
consumer)
• Can
be
labeled,
if
desired
– Some
odd
shapes
wont
accept
a
top
label,
or
will
distort
it
30. Packaging:
Label
What
to
look
for:
– Quality
• Won’t
peel,
curl,
or
scuff
• Legible,
sharp
prin)ng
and
clear
graphics
• Consistent
colors
across
all
labels
31. Packaging
Effect
On
Consumers
Studies
show
a
strong
brand
and
packaging
creates
expecta1ons
in
consumers.
– One
study
found
that
expecta)ons
created
by
packaging
and
brand
were
the
top
two
factors
in
73%
of
par)cipants
final
purchase
choice.
Source:
University
of
South
Australia’s
Ehrenberg-‐Bass
Ins)tute
for
Marke)ng
Science
32. Packaging
Effect
On
Consumers
Studies
show
label
packaging
alone
can
influence
70%
or
more
of
consumers
response
to
your
product.
Source:
University
of
South
Australia’s
Ehrenberg-‐Bass
Ins)tute
for
Marke)ng
Science
33. Packaging
Effect
On
Consumers
Labels
majer!
– A
majority
of
consumers
will
select
a
boXle
based
on
the
label
if
they
don’t
have
a
recommenda)on
from
a
family
member,
friend
or
store
employee.
– If
you
put
the
same
product
in
two
different
boXles
people
will
swear
one
tastes
beXer!
34. Packaging:
Label
Design
Design
considera1ons:
– Stand
out
on
the
shelf
– Be
memorable
– Representa)ve
of
price
point
– TTB
compliant
35. Packaging:
Summary
Your
label
needs
to:
– Sell
– Tell
your
story
– Tie
in
with
everything
else
you
are
doing
to
market
and
adver)se
your
products