Beverages Packaging - Part II - Big Brands Support Key Players in Drinks Innovation

By | 17 September 2013

The Drinktec exhibition is taking place across all of this week in Munich. To coincide with the event, just-drinks' management briefing this month takes a look at the drinks packaging category. The second part of the four-part briefing considers how some packaging companies are appealing to beverage companies through innovation.

If there is one good way of identifying a key player in drinks packaging innovation, check whether the big brands are buying into their innovations. If they are, they are worth watching.

America’s Chromatic Technologies Inc (CTI), which celebrated its 20th anniversary in April, has been one packaging developer at the forefront of graphics innovation. It is a major, global speciality ink supplier, with a core beverage competency, inking drinks packages such as bottles and cans. “The metal can is something that we do particularly well," says CTI's chief marketing officer, Pat Edson. Perhaps the most famous of CTI's thermochromatic products is MillerCoors' mountains that change from white to blue when the beer is chilled to the optimal drinking temperature. These products include bottles and cans for Coors Light and the aluminium, resealable pint bottles released last year for Coors Light, Coors Banquet, Miller Genuine Draft and Molson Canadian.

CTI's recent innovations include the development of an ink that changes into yellow – a particularly difficult colour to make. This is because yellow is close to white on the colour spectrum so, Edson explains, it has been challenging to develop a noticeable yellow colour.

The company is also rolling out temperature-activated ‘Reveal Inks’. These involve two layers of ink of the same colour, with one overlapping the other, which when warm can show information such as a hidden message or note about a prize. When the drink is chilled, the two layers change into a single, different colour. Then, as the consumer drinks, the change in temperature causes one layer of ink to turn clear.

Reveal Inks can even hide another innovative product: SnapTag, which is made by Colorado-based SpyderLynk. SnapTags work similarly to QR codes except they can be customised so that, for example, it shows the brand's logo within a small, circular ‘Code Ring’. Consumers are encouraged to take a picture of the code with their smartphone, text a ‘short code’ telephone number of a few digits, or scan the code using a SnapTag reader application, which directs them to other content such as promotions. "SnapTag is the next generation (of QR codes)," says Edson. "It actually has some art to it (compared to a QR code)."

"The last six months have really been transformational for CTI because we've really revamped the entire company," continues Edson. CTI has developed a more inclusive innovation process, bringing chemists, inventors, and brand marketing managers together to work with drinks manufacturers and develop novel labelling ideas. While he won't divulge specific sales information, Edson expects this more proactive approach to yield dividends: “We have tons of growth ahead of us," he claims. Part of this is down to positioning: Beverage companies are increasingly looking to use packaging to attract consumers' attention, differentiate their brand from competitors, inform consumers (for example when the drink is at the optimal temperature to drink), and interact with them.

Another US company, Pennsylvania–based metal can packager Crown Holdings Inc, has also been innovating and expanding in tandem. It has created features designed to strategically target consumers in the US, Canada and Mexico, while also expanding worldwide. In terms of convenience packaging, Crown offers a removable can lid (the ‘360 End’) to its clients, which Pennsylvania-based Sly Fox Brewing started using in North America earlier this year. Crown also aims to use a variety of new drink sizes to help capture various consumer segments. "While individual beverage types usually exist within a defined range (ie soft drinks in 12oz cans or smaller), we are seeing an increasing number of unique sizes hitting the shelves, whether for calorie and portion control, or at the other end of the spectrum, multiple serving sizes in a single container," says VP of marketing & strategic development, Neill Mitchell. Last year, Crown in North America introduced a "sleek" 10oz beverage can designed to help brands hit different retail price points and to visually differentiate health-oriented products such as low-calorie soft drinks. 

The company has also been expanding its beverage can operations in Asia, Brazil, and Europe, according to Crown's 2012 report. Since 2011, Crown has commercialised ten new production lines, including six plant start-ups, in these regions, expecting a combined annual production capacity of 8.6bn beverage cans when they are fully operational. This year, Crown expects to produce another 3.6bn cans to meet demand in Cambodia, China, Malaysia, Thailand and Vietnam, says the report.

Last year, Crown's net sales reached US$8.4bn, down from $8.6bn the previous year, but up from $7.9bn in 2010.

Meanwhile Switzerland’s Tetra Pak has been focusing on growing consumer segments of interest – such as busy consumers on-the-go, and ageing populations - to its clients. The company sees these as new growth markets "changing the face of packaging", says Libby Costin, global portfolio marketing director. "The packaging companies that thrive will be those who are the quickest to understand the rapidly-shifting consumer trends in new markets."

One example is the Tetra Brik Aseptic Edge carton package, announced last year, marketed as being convenient and flexible, making it easier to hold and pour liquids, with a large, sloping top and contoured side panels. 

Consumers are increasingly busy and want more portable, secure, and resealable packaging, says Costin. Cartons remain an important and popular packaging medium, she highlights, offering plenty of space for on-pack branding: “Customers are looking for cartons that will stand out on the supermarket shelf, and packaging companies are driving innovation in this area, to reflect evolving consumer tastes and preferences.”

Tetra Pak is also focusing on improving sustainability in packaging because "consumers place the environmental attributes of a package high up their list of concerns," explains Costin.

For example, the HeliCap 27 appeals to environment-conscious consumers as it is made from recyclable high-density polyethylene. In 2011, the company earned net sales of EUR10.3bn.

For the first part of this briefing, click here. Parts three and four will appear on just-drinks throughout this week.

Sectors: Beer & cider, Soft drinks, Spirits, Water, Wine

Companies: Coors

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September 2013 Management Briefing - Beverage Packaging

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