While sales of fine wine directly to consumers is growing in share, many purchase decisions still are made at the store shelf. And freshening up brand packaging can help a vintner keep or win key shelf positioning, but the odds are high that redesign could backfire, according to consumer packaged goods experts who briefed industry designers in Napa Valley recently.
“Nine out of 10 package redesigns actually fail to deliver a meaningful impact to sales,” said Jessica Gaedeke, vice president of The Nielsen Company’s Innovation practice, at the Wines & Vines Packaging Conference in Yountville. That’s what the New York-based consumer-research firm has heard from brand owners and design agencies serving. “And half of redesigns actually drag down perception of the brand.”
There are three common reasons for this high rate of failure, she said. But there are twice as many key fixes that could result in success rates as high as 85 percent and repeatable growth, said Steve Lamoureux, senior vice president of product innovation in Nielsen’s Design Solutions practice.
One frequent cause of redesign dysfunction is trepidation among marketers to stretch the brand concept, Gaedeke said.
“Marketers have been conditioned to not really want to take creative risks,” she said at the Aug. 16 conference. “Frankly, their jobs are on the line (brand performance) doesn’t go up.”
And often the upside of taking creative risks isn’t well-communicated, so fear supports design “inertia,” she said.
A second common factor in redesign mishap is the “cult of opinion,” Gaedeke said. “One thing I hear from my clients all the time is, ‘We tried it in the tasting room, and they love it.’ It’s good to get feedback there, but please don’t make decisions off that very subjective group.”
Or the decision often comes from “the boss’s favorite,” she said.
Opinion-based design often leads to a “safe” design that “doesn’t go too far” or to a “Frankenstein design” that combines staff favorites for logo and typographical designs, Gaedeke said.
A third source of brand-refreshing problems is design agency economics.
“There’s a core to the process that doesn’t allow agencies and designers to go with their instinct, to go with their desire to explore creatively,” Gaedeke said.
After interviewing more than 600 agency professionals and brand owners in wine and other consumer-packaged goods businesses, Nielsen came up with six best practices to increase the chance of redesign success and better outcomes, Lamoureaux said. The rule of thumb for when it’s good to refresh a packaged-goods brand fighting for retail sales in once every five years, he said.
1. WIN OVER DECISION-MAKERS
First, brand owners often must be convinced that packaging is their most important marketing tool. That’s not so much a challenge in the wine business, he said. Advertising spending in the beverage alcohol industry is skewed far away from wine, according to Nielsen Ad Intel. Vintners spent $124 million on purchasing ads last year, compared with $168 million for ciders and flavored malt beverages, $376 million for spirits and a whopping $1.59 billion for beer.
“An ad campaign can cost tens of millions of dollars, but a redesign can be the cost of a hair job for one of the models in those ads,” Lamoureaux said.
2. IT’S AN INVESTMENT
Second, redesigns should be approached as an investment in the future of the business and not a cost.
3. IF IT ISN’T BROKEN…
Third, brand owners need to “face the music” by researching how the existing designs are actually performing.