Craft beer can labels: Innovative Labeling Solutions talks shrink sleeve option

Canning continues to grow as a craft brewing industry trend, and with more cans comes more need for can labeling solutions. Craft Brewing Business contacted Sean Gallagher, director of innovation with Innovative Labeling Solutions (ILS), to learn a little more about the digitally printed sleeve option that is drawing more and more interest from the craft beer industry.

“There’s been a huge insurgence in can use from bigger breweries, and now we’re seeing more craft brewers looking for solutions to enter that market without looking to purchase a high volume of cans. Shrink sleeves are a good solution to that,” Gallagher said.

Rather than approach digital printing as a niche, short-run solution, ILS was one of the first label suppliers to shift its focus and sell digital printing as a sensible, competitive advantage.

“We investigated digital and found a digital printer to partner with to help us with the application,” he said. “We realized we were missing out on something, and then formed a strategic partnership with HP and purchased our first digital printer, and then six months later purchased another. We approached the market differently. Rather than using digital printing to more efficiently produce short run jobs with quick turnarounds, we looked at it as a solution for brands to customize their package graphics and increase engagement with their consumers by converting their entire product line to digital print.”

Five years ago, this digital niche led the company to pursue digitally printed shrink sleeves. The company segments the overall market into targeted verticals with the craft beer industry having a strong focus. They listened to what their clients were seeking in regard to strategic, seasonal offerings of their craft beer in cans. Once again, digital printing enabled the craft breweries to customize their graphics according to these special releases thus increasing the connection between the consumer and the craft brewer

“Craft beer applications can be a bit more challenging,” he said. “Craft breweries are interested in more unique materials and how they can differentiate their product. Whereas wine labels are focused more on a classic appearance, craft brewers want to try anything, which is exciting.”

Shrink sleeve decisions

So, why cans and why shrink sleeves? One advantage Gallagher sees is the opportunity for 360-degree messaging, which can lead to even more creativity and a more distinct, full brand look.  ILS provides design templates for shrink sleeves because even though there is the 360-degree design, there are places where you cannot put text or graphics because it will either be hidden or distorted after printing and application.

“Shrink sleeves are a much more technical item then pressure sensitive labels,” he said. “You have to know the type of equipment the sleeve is being applied on, whether it is before or after fill. There are several styles of cans in the marketplace now, and we need to drill down on that too.”

“The process to make shrink sleeves is much more labor intensive. So, the more sleeves we run, the more it helps to break down that cost and over time it defers those costs over the larger quantity. For a small or upstart brewery that wanted the appearance of a more mainstream established brewer, I wouldn’t say it would be a significant increase in investment.” — Sean GallagherApplication is an issue. There are machines breweries can purchase that easily remove this issue, but many smaller brewers trying their hand in cans will not be excited to spend $30,000 on up to $250,000 on the label application equipment needed to do the job right. This is where Gallagher recommends contract decorating services: The cans and the labels are shipped to the contract decorator who applies the sleeves and sends the product back for filling.

“Some are still skeptical of cans, and they want eight or 10 orders under their belt before investing in that equipment,” Gallagher said. “The good thing about digitally printed shrink sleeves is the lead time we offer is comparable to pressure sensitive labels even though it’s a much more labor-intensive process.”

“If a client wants 10 sleeves as a sales sample or a few hundred as a product launch, we can supply that digitally,” he said. “Conventionally, you could have a $2,000 investment to get 200 test market sleeves whereas, in digital, it’s a few hundred bucks.”

Canned cost

A medium run of can shrink sleeves, about 5,000 to 7,000 sleeves, compares in cost to a medium run of bottle labels that covers front, back and neck. Gallagher estimates a 20 to 30 percent raise in investment on a small order of shrink sleeves versus pressure sensitive bottle labels using the contract decorator for application.

“The process to make shrink sleeves is much more labor intensive. So, the more sleeves we run, the more it helps to break down that cost and over time it defers those costs over the larger quantity,” Gallagher said. “For a small or upstart brewery that wanted the appearance of a more mainstream established brewer, I wouldn’t say it would be a significant increase in investment.”

For those implementing their own fill line labeling equipment Gallagher said going with a before-fill method can be preferable because if there is a labeling issue, you won’t be wasting any beer. However, keep in mind that labeling an empty can carries its own challenges.

That’s ultimately the point here: If cost is the main factor in your packaging and labeling decision-making right now, cans with a shrink sleeve might not make the best business decision, depending on the size of the run. But if your brewery feels bold and wants to make that in-store splash or believes cans are more permanent than a trend, the shrink sleeve could be the perfect solution.

“For consumers, [shrink wrapped cans] just stick out more,” Gallagher said. “When you walk down the aisle and you see all of the bottled beers, but then all of a sudden you see Dale’s Pale Ale, it sticks out. A lot of the craft brewers see that Oskar Blues has been quite successful with their can offering, but also feel that they would have to buy 50,000 pre-printed cans and that results in many craft breweries remaining in bottle form.”

This is the preconceived (perhaps self-defeating) notion that Innovative Labeling Solutions is hoping to dispel with its digital printing shrink sleeve option.

“We deal with the same challenges in craft brewing as in so many other markets,” said Gallagher, “that notion that you have to buy so much in order to get an effective, competitive price, and when you do that, you run the risk of obsolescence. You can’t refresh your brand because you have 50,000 pre-printed cans in inventory to use. By digitally printing shrink sleeves, you can just print what you need when you need it.”