For most makers of alcohol and wine, packaging is a high priority. That’s because packaging helps protect your product quality, attract consumer attention, and improve customer convenience. But packaging represents about $1 of every $11 spent on a final product, so it has a huge impact on the bottom line.
How do you optimize your alcohol and wine packaging while maximizing profits? First you need to understand how packaging impacts your total product costs. Then, consider adopting these 4 ways to reduce your alcohol and wine packaging costs (while improving sustainability, too).
Distilling.com breaks down the average cost of making a 750ml bottle of a premium white spirit with a suggested retail price of $29.99:
|Raw goods freight in||$0.15|
|Federal excise tax||$2.30|
As this example illustrates, the liquid, the glass bottle, and the federal excise tax (FET) together account for 65% to 85% of the product’s total cost. FET can’t be controlled—making the choice of packaging and the selection of liquid the two controllable factors in the equation.
Of course, you can’t sacrifice the quality of the product itself without jeopardizing customer satisfaction. That leaves packaging as the most viable controllable factor when it comes to reducing costs. And since many of the factors that go into packaging can be adapted, distillers and alcohol makers have great flexibility in choosing packaging that’s effective and cost-efficient.
Now that you know how packaging fits into your product’s overall costs, let’s look at 4 ways to reduce your alcohol and wine packaging expenses.
For years, many wineries and other alcoholic beverage makers were hesitant to move from glass bottles to more modern flexible packaging options, like liquor pouches. But consumers are no longer tethered to traditional ways of drinking wine and spirits. In fact, many welcome a change in alcoholic beverage packaging to fit their active, on-the-go lifestyles.
That change in consumer sentiment creates opportunities to use new packaging materials that maximize your inbound logistics.
Flexible materials for liquor and spirits packaging can be shipped to manufacturers in flat, pre-made pouches or in large rolls, delivering far more packaging material per truckload versus rigid containers. That means lower shipping costs, lower overall costs, and higher profit margins. Working with a supplier that can supply your packaging more cost effectively can make a big difference in your bottom line.
Flexible packaging for wine, spirits, and ready-to-go cocktails enables you to reduce your own shipping costs (improving product protection in the process).
Glass bottles and aluminum cans are heavy and costly to ship. And with the cost of glass and aluminum rising and material shortages continuing, that reality isn’t expected to change any time soon. According to the BBC, it takes 40% more energy to transport drinks in heavy containers like glass bottles as compared to lighter materials like plastic—increasing transportation costs as much as five times per bottle. Shipping lighter-weight packaging material in fewer truckloads also means less energy is consumed during transportation of the unfilled packaging, from packaging supplier to filling operation
Transportation companies can choose to reduce their costs by updating their vehicle features and technology for better fuel efficiency. But you don’t control that—they do. The only way for alcohol and wine makers to drive down their own shipping costs is to make the product lighter.
That’s where flexible packaging for alcohol and wine —including liquor pouches and bag-in-box options—come into play. Because they’re lighter, they can drive down shipping costs without impacting product quality. Flexible packaging also can reduce dunnage—items needed to keep products in place like straps, blocks, and foam—which can further reduce your shipping costs.
Along with reduced costs, flexible packaging for alcohol and wine offers another shipping improvement: It’s less fragile than glass bottles (which are susceptible to breaking or damage with every bump in the road) and cans (which can dent or explode under extreme storage and distribution conditions).
Flexible packaging for alcohol and wine is at the forefront of the sustainability trend because it consumes less energy, emits less greenhouse gases, and generates less waste throughout the supply chain—unlike a glass wine or liquor bottle that requires a label, glass, foil, glue, and more. And as mentioned earlier, glass and cans are susceptible to damage, creating much more potential for waste as compared to more durable flexible packaging.
Wine and liquor pouches also maximize the amount of alcohol in a container. According to the Flexible Packaging Association, a single-serve liquor pouch offers a 97:3 product-to-package ratio—meaning more of the product and dramatically less packaging material. This ratio is an excellent metric for measuring sustainability and the impact on your bottom line.
Flexible packaging for wine and alcohol offers tremendous cost-saving benefits compared to traditional rigid packaging. The key to realizing these savings is to partner with the right packaging manufacturer from the start. Since packaging plays a key role in many aspects of the supply chain, the earlier you bring an experienced packaging partner into the process, the greater the potential for cost savings.
The Fres-co team can help you realize the cost-saving potential of flexible packaging for wine and alcohol. Contact us today to learn how we can help improve your bottom line.
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