Gift Packaging: It's a wrap

There’s big money to be had in the world of drinks gifting. Hamish Smith investigates

Consumers have become a precious bunch. At one time all that was required of a bottle of whisky was for it to look like a bottle of whisky. It had to stand tall and look round. That was it. 

Now the brief is uniformly non-uniform. ‘Bespoke’ ‘personalised’ ‘experiential’ and ‘interactive’ are the gush words of today’s meetings of marketers. But these are not terms that easily translate to a assembly line, where standardisation, simplicity and efficiency are traditionally prized. 

“Packaging 30 years ago was really simple. Now consumers are demanding more complex packaging – a personalised approach,” says Alister McIntosh, manufacturing director for Chivas Brothers, taking time away from the official opening of the group’s Prestige Hall bottling facility in Paisley in Scotland in September.

The new hall allows Chivas Brothers to expand its booming operation of low-volume, high-value products that must feature ever more complex packaging, packaging that can counter counterfeiters as well as convince consumers. 

The Pernod Ricard division has become a master of the art. To convince anyone to part with $200,000 for a bottle of blended whisky takes an inordinate amount of skill and effort. But with prestige products, such as the afore-described Royal Salute Tribute to Honour, it’s not just about the 45-year-old liquid. It’s a trip to Scotland to meet the master blender Colin Scott, it’s a flagon of deep colours and multi-layer embossing, debossing and jewels (413 diamonds to be exact). It’s the perception that the product is so special it wasn’t produced, it was born. So rare it could almost justifiably be called unique on the press release, although not quite – 21 bottles were made.

“Prestige is a big focus area for Pernod Ricard,” says Eric Benoist, international marketing manager of Chivas Brothers, who was also in Paisley for the grand opening and royal visit. “There’s a softening of growth in the emerging markets, but if you look at the medium term there is a lot of demand for prestige products from those markets.”

Tribute to Honour is probably not the product that is spearheading luxury spirits growth – its low volume makes it more a matter for hand-sale than point-of-sale. What Chivas calls ‘prestige’ could probably also be described as ‘luxury’ and starts at about £70/$100 a pack point – such as the Royal Salute 21-year-old.

Simultaneously, luxury/prestige products are part of the wide-ranging gifting channel [note: the verb form of ‘gift’ has been in use for 400 years, according to the Oxford Dictionary]. But, in theory, a gift should be aimed at the end consumer – for once the customer is not the customer but the conduit. In practice, though, gift packaging has to flash its skirt at the punter with the readies, not the loved one, friend or boss back home. Indeed, you can never assume the product ever leaves the hands of the customer you put it into. 

Spiritual home

What’s for sure is that travel retail is the spiritual home of this over-sized, over- the-top form of packaging. And the sector is wholeheartedly loved by brand owners for its ability to show off their wares to hoards of bored, moneyed people.

At Pernod Ricard’s half-year get-together with journalists in London last September, future leader Alexandre Ricard summed up the sector’s importance: “If it were a country it would be our third or fourth largest country in the world from a profit point of view.” Laurent Lacassagne, newly installed chairman and chief executive of Chivas Brothers, also chipped in: “Travellers are open-minded consumers with time – things we don’t find too much in normal life.” 

An explosion of travel among the Chinese – which, according to Diageo, is estimated to have been 85 million last year and growing at 15% – has changed everything. The Chinese penchant for gift-giving, especially around Mid-Autumn Festival and Chinese New Year, has had a profound effect on sales of Cognac and Scotch. 

This is something Rémy Cointreau knows a little about. “In some locations gifting represents as much as 50% of purchases,” says the group’s Matthew Hodges, marketing and business development director, GTR. “There are so many reasons to buy a gift – to say thank you, to show respects, to convey affection, to simply surprise someone and very often simply because it is expected. 

“Many of us are familiar with the feeling of not knowing what is suitable and are willing to pay a little more to overcome our sense of uncertainty. Travel retail provides the product range, the advice and the opportunity for travellers to make an appropriate gift choice.”

Since the group bought the Islay single malt Bruichladdich in September 2012, it has set about working on a five-bottle exclusive-to-travel retail collection, which launches this month at TFWA Cannes. “The range is highly distinctive, the belief in terroir is communicated on every bottle,” says Hodges. “The Organic Scottish Barley is packaged in an eye-catching aqua bottle inspired by the colour of the seas around Islay. It is simply a beautiful and unexpected colour for a category dominated by earthy tones.” 

The gift-buying period

Back at Chivas Brothers’ Prestige Hall, it’s a busy period for whisky orders. With China’s Mid-Autumn Festival orders only recently dispatched, the confluence of Christmas and Chinese New Year orders create a bottle-neck, so to speak, in production. Fathers’ and Mothers’ Day, Valentine’s and the Spring Festival in South Korea mean there are more spikes throughout the year, but because travel is so widespread, gifts are in constant demand. 

According to research from UK distributor First Drinks, gifting represents a “year-round opportunity to engage with consumers”. In many markets, the UK included, gift packaging is employed at all price points – from the luxury market to mid-market. “The majority of gifting purchases are valued at up to £20 – indeed the £15-£20 price point is key,” says Roy Summers, head of category management. “However, 40% of shoppers are happy to pay a lot more than that – above £50 – so gifting is an attractive proposition across all price points, not just the premium or super-premium end.”  

In the UK whisky accounts for more than half of all spirits gift purchases, according to Summers. “However, with white spirits embracing gifting and creating innovative solutions such as the Hendrick’s tea set, vodka, gin and indeed other categories, are now witnessing significant value growth as a result of consumer trial through gifting.”

Trial-size bottles in gift packs appeal to impulsion. “The Glenfiddich 3x5cl packs containing 12, 15 and 18-year-old whiskies have been hugely successful for the business and are now firmly established as a top 10 SKU,” says First Drinks’ Summers. “Seventy-five per cent of recipients have been new to the malt category and research has revealed that trial via the packs has converted drinkers to 15 and 18-year-old.  

“Another success story is the Sailor Jerry Good Gift for Bad People with its added-value pack containing limited-edition, collectable Sailor Jerry artwork. Much of what we do is centred on the in-store theatre around gift packs which helps provide an engaging and exciting shopping experience, key to repeat purchase.” 

Drambuie launched its first travel retail gift pack at Cannes last month. The 35cl bottle comes with a branded hipflask and is exclusive to Virgin Atlantic, with more to come in the next six months. “The pack size has been designed specifically to appeal to entry-level consumers, giving them the added value of a gift with purchase,” says William Birkin, regional manager, global travel, India, Middle East, Africa & Asia for Drambuie.

Gift packaging also plays an important role in online sales. According to Sukhinder Singh, director of global online spirits retailer The Whisky Exchange, around 15% of the site’s sales are down to gifting. 

Singh says packaging is all-important for gift-buying and “sadly more so than what’s in the actual bottle”. He adds: “In a shop you can at least ask for a recommendation and about the quality of the liquid. When ordering online, the added value and presentation is all-important because of the obvious lack of physical interaction when purchasing.” 

So what’s been selling well on the shop floor? “On the premium side of the business the Champagne and whisky companies have been really good – especially Moët Hennessy with its quirky fridges and ice buckets; the Hendrick’s Tea-Time edition is another one that stands out,” says Sue Kelly, trade planning and category strategy manager at Dublin Airport Authority.  

“We have also seen some really cool bottle treatments appealing to younger passengers on the more standard products – the Jameson limited-edition bottles are great and fly off the shelves as soon as they land, as do the Absolut limited editions. It is all about being able to buy a complete ‘ready to give’ gift solution, without having to get involved in wrapping paper and ribbons.”

Gift buying is so often the last minute solution to a long-held cultural or seasonal obligation. Whatever the level of the product or the buyer’s bank balance, there is a bottle of something, suitably gift-packed.