Can Luxury and Sustainability Harmonize in the Wine and Spirits Sector?
This post has been contributed by Suzanne Besson, Business Development Director, SGK
According to GlobalData’s 2019 Q3 consumer survey, 71% of global consumers consider it ‘quite’ or ‘extremely’ important for product packaging to be made from sustainable or renewable sources. Of the consumers surveyed, 25% believed it important for packaging to have a luxury appearance. These statistics have meant, in some cases, less sustainable practices, such as in the whiskey market, which is driven by premiumisation and weightier bottles and packaging with special finishes have become prominent design features.
While other FMCG sectors appear to be embracing sustainable packaging, the wine and spirits sector is often viewed as lagging behind. However, there is new evidence to show that the industry is catching up, not only as a result of pressure from consumers and retailers, but the ways in which wine and spirit brands can embrace sustainability is evolving.
Luxury is often linked to excess and waste, whereas sustainability is associated with ethics and restraint. So how well can the themes of luxury and sustainability harmonize in the wine and spirits market?
We highlight four ways in which wine and spirits brands are integrating sustainability into their stories while maintaining a position of luxury.
1. Water Usage Reductions
Water is a vital ingredient to the production of wine and spirits, which comes at the price of making the industry one of the least sustainable. With about 870 litres of water used to create one litre of wine, and water being considered the number one ingredient for creating vodka, the industry faces an uphill battle when it comes to water conservation. But major brands are taking big steps to reduce their water usage.
One example is Beam Suntory, which began its sustainability efforts in 2006 by investing $60 million to reduce environmental impacts, establishing two natural water sanctuaries in North America, and providing 5,000 people in India permanent access to safe drinking water.
Bacardi reduced its water usage primarily by implementing water recycling practices throughout various processes, such as recycling the water used to rinse whiskey barrels. These practices resulted in recycling up to 15,000 gallons of water per day and an overall reduction in water usage of 50% since 2006.
2. Localized Supply Chain
Whether it’s called ‘seed-to-spirit’ or ‘farm-to-flask,’ one method luxury brands can employ to enhance their sustainability efforts is ensuring local sourcing and ingredients, which brings a luxurious craftsmanship to their brand.
Absolut’s Elyx Vodka touts localized efforts by growing and producing every ingredient within a 15-mile radius, including wheat from a single estate only few miles from its distillery. These sustainability efforts tell a brand story of reduced transportation as well as a support of local agriculture.
Edrington premium spirits based in Scotland is also committed to sourcing raw materials “as close to home as possible,” utilizing local suppliers.
3. Reducing Carbon Emissions
Transport for wine and spirits is a prominent part of the industry, making high carbon emission rates challenging to avoid. The carbon footprint of an average bottle of wine is the equivalent to driving 3 miles in a small car, and a study by the Beverage Industry Environmental Roundtable showed a single 750ml bottle of spirits produces over six pounds of CO2.
The solution is not as likely to be found in reducing transport, but in creating lighter packaging innovations.
One of a recent innovation in this sector is the flat wine bottle created for Garçon Wines. Made from recyclable PET, the bottles are said to be 40% more spatially efficient than round bottles and are 87% lighter than glass bottles. In addition, the brand has created a 10-bottle case that it says cuts greenhouse gas emissions and business costs by 60%. A pallet loaded with these cases could hold 1,040 bottles, compared to only 456 conventional bottles.
Photo Credit: Garçon Wines
A more established solution to the weight and transport considerations of glass are aluminium cans. As a result, canned wine is becoming more prevalent, and increasingly accepted by consumers. Sustainability is just one benefit of this format, as it also offers consumers a portable alternative to glass at events and outdoor activities.
4. Packaging Alternatives
Reducing the amount of packaging is one approach to sustainability, but another is to make the pack as reusable as possible by giving it a secondary purpose rather than something to be discarded. Being creative with structural design and materials, whilst having an eye on a premium result is key.
The UK’s Sustainable Spirit Company is pioneering packaging reductions with their eco-friendly spirit pouches. What started as an 8.4-litre ‘bag-in-box’ has evolved into its 2.8-litre Eco Pouch. The pouch reduces packaging by 95%, and transported weight by 45%. In addition, use of the pouch entirely eliminates the energy used to produce a new bottle.
Photo Credit: Sustainable Spirit Company
Victory, a London-based distillery, is also utilizing innovative packaging solutions. First is the KeyKeg, which it considers to be ‘the future of spirits distribution’. Each 20-litre recyclable keg contains the equivalent of 28 700ml bottles, saving more than 20kg in glass. A pump tap is supplied, allowing bars to refill glass bottles easily. Victory also supplies its spirits in Eco Pouches, each containing the equivalent of three 700ml bottles, and offering a pour spout that fits into its spirit bottles. Pouches reduce packaging waste by 85%, and are considered not only more sustainable, but also more cost-effective.
What do luxury wine and spirits brands need to know?
For all brands, be they luxury or mid-market, sustainability is no longer considered optional, but essential. The luxury packaging market must find a way to help their customers align with the sustainability topic, whilst maintaining a premium look and feel.
About Suzanne Besson: Suzanne (Zanny) has more than twenty years’ experience in branding, graphics and print deployment, specialising in packaging. She began her career with SGK in 1997, fulfilling client on-site roles at Nestle, Molson Coors and Premier Foods. She then spent 6 years at Imperial Brands during 2012-2018, where she lead the Global Print Deployment team, before re-joining SGK. Today she works as a Business Development Director, focused on helping large organisations implement best practice processes for the development of optimised packaging and branded content. Today, as part of the wider SGK team, she is involved in a number of initiatives focused on bringing sustainable solutions to SGK’s clients.