What’s the purpose of a wine label; or for that matter a label on spirits and beer? Obviously, the first response to that question is: to satisfy the TTB (Alcohol and Tobacco Tax and Trade Bureau) regulations. Once that is accomplished, the label space remaining may be used for branding and marketing copy. The fact is, there is very little space on bottle labels to get creative with messages. Now technology is helping solve the limited space on labels by way of RFID (radio frequency identification/ID) technology. Tap a smartphone on an NFC (Near Field Communications) tag embedded on a bottle and see what comes up on your smartphone; assuming there is currently a tag on the label.
Depending on a winery’s budget and the number of smartphones enabled with RFID tag readers (newer smartphones have built-in reader capability), wine, beer and spirits producers can communicate directly with the consumer while they are standing in front of the bottle or can. These electronic tags can impart information in any format. The information can be audio, a message or automatically opening a website page; the choice is up to the winery or craft beverage company. The most economical tag option is to use NFC tags embedded in a label or a very thin flexible film adhered to a bottle.
This NFC technology has different names such as Smart Labels, Tags, and OpenSense Tags; the moniker I use is “Tap Tags”. Smart Labels (originated in the consumer products industry) are starting to appear on food, personal care, and pharma items. Although extremely limited, spirits, beer, and wine are recent joiners. In fact, companies using smart label tags are not just the big players in the food and personal care space but are also used by small start-ups. Basically, tags are a means for producers of products to give the consumer more information than is possible to print on a label. But, the benefits of such tags aren’t just in dispensing more information, it is also about branding, loyalty, increased sales, etc.
QR codes have been around for decades. They can do some of the operations an NFC tag can perform but are limited. More on QR code versus NFC follows.
Twenty years ago, I was involved with a gentleman who is an expert integrator of RFID (radio frequency identification/ID) tag technologies for casinos. His patented technology is used today in allowing casinos to authenticate and track their gaming chips within a casino. Ken Smith, writing for Blackjackinfo.com on November 5, 2012, reported that Wynn/Encore Casino’s in Las Vegas starting using chips embedded with RFID tags in 2005. Point being: the level of sophistication offered by “tag” technologies allow companies to communicate with consumers, even before they buy the product.
Decades ago barcodes started allowing companies the means to track inventory, monitor parts and adjust pricing instantly. Then RFID tags came along which expanded the capabilities of product monitoring passively and actively; reading and writing information to an RFID tag. Depending on the capabilities of an RFID tag, information can not only be read from a tag, but that tag can also be written to; adding more/different/updated information on the tag. We don’t want to forget the QR (Quick Response Code) that most smartphones can read optically and provide an on-screen response via a link to a landing page. The QR code, invented in 1994 has a similar application as the barcode. Smartphones today come with QR reading capabilities and more recently antenna to communicate with NFC tags.
A derivative of RFID technology that is gaining acceptance rapidly is the NFC tag. A strong proponent of NFC technology is coming from Grocery Manufacturers Association and the Food Marketing Institute-the SmartLabel™ group. They formed an alliance called Trade Partners Alliance to explore ways to be transparent with quick, reliable, actionable, in-depth product information for the consumer. One of their applications involves NFC tags which take the consumer, via their smartphone, to a navigational landing page. All the consumer is required to do is tap their smartphone on the NFC tag on the product packaging.
Noted previously, most product packaging has limited space for details. The real estate available on a printed wine label may not be enough to provide a plethora of information options various consumers are interested in and/or need. Solution: why not make it possible for a consumer to tap their smartphone against a “tap tap” on a product and instantly be taken to a URL/website/landing page that allows the producer to communicate (in print, video or audio) with a potential customer concerning the product. An adage I hear a lot: You can do anything with enough time and money. The same adage applies to NFC technology. For our discussion I am taking the quickest and most creatively flexible approach to new label technologies; the NFC tag, while not totally forgetting QR codes.
This brings us to the “here and now” concerning new technologies that allow producers of wine, spirits, and beer to communicate directly with their customer. I am talking about NFC (Near Field Communications), a technology application already being explored by Diageo, Coronado Brewing, and a winemaker in Spain (Barbadillo Wines). In December 2017 Astral Tequila will feature NFC technologies to promote in-store consumer interactions. It has been reported by one integrator/manufacturer of NFC applications, an alcohol product company realized a 30% increase in conversion rates when testing their foray into NFC label tags. Yes, NFC is part of many label options that can be very transparent to the consumer.
An NFC type smart label is actually an RFID tag that is about as thin as 3 sheets of printer paper or.0002 inches. When labels, with embedded NFC tags, are tapped by an NFC enabled smartphone, the phone receives pre-programmed information. For example, the user may be directed to a predetermined site. The website/landing page the consumer is directed to can be designed as a winery, brewery or distillery deems appropriate. The information in the NFC tag can be approximately 7K in size. Again, larger and more capable RFID tags can offer greater capabilities and much more capabilities, but at more expense and involved integration.
One manufacturer of this technology that demonstrated the NFC options for me was Metal Craft. “The options for NFC to communicate with customers in the beverage industry is mind-boggling,” said Austin Elling, Marketing Manager-Metal Craft. “Here are some examples of what can be programmed into one of our NFC tags: vCard to import data into the address book, URL to open a given web address, plain text to display simple messages on a smartphone, telephone numbers to initiate a call, geolocation to open a specific destination,” says Elling. “For alcoholic beverage business, my experience says that branding and creating direct communications with a customer is in the NFC sweet-spot. A winery may decide to use NFC capabilities for a loyalty program, announcements, promotional trials, initial trials, wine clubs, etc.”
Digressing for a moment. Recently, Anheuser-Busch launched a new Tequila flavored beer branded as Oculto Beer. The label on the beer was embedded with a tag and battery that lit up the eyes on the skull logo on the label. They positioned the switch where most people would grab the bottle. Obviously, it was creative and very expensive. Unfortunately, consumers bought the beer for the novelty of the label technology; consumers did not like the Tequila flavor and it failed.
Relatively inexpensive, NFC tags can only be read at the extremely close range, which is why the label area containing the tag needs to be tapped with the enabled smartphone. Some more expensive and capable RFID tags can have a read/write range of approximately 200 feet. However, at approximately $0.10 each, NFC tags are affordable. The price, however, does not include set-up costs and integration with the back-end landing page. Nathan Chandler writing in “How Stuff Works” reports, “Memory capacity and speed dictate tag cost, which is a critical consideration for companies that want to spread information far and wide through smart posters or flyers… labels. Right now, tags cost around 30 cents apiece even in bulk, but the price should continue to drop until they’re only a few pennies each [source: NFC Rumors].”
Why would a winery, craft brewery or craft spirits company invest in a new label endeavor? Here are some immediate marketing applications that come to mind:
· Protect the integrity of their brands
· Build a comprehensive loyalty program and brand awareness
· Source for consumers to obtain product reviews
· Detailed product information-tasting notes, retail locations, AVA’s, information about winemaker, DTC (Direct to Consumer) pricing
· E-commerce centric efforts
· Customer surveys
· Encourage wine club and newsletter sign-ups
Coronado Brewing in Coronado, CA found consumers were intrigued with their use of NFC technology (tap tags) embedded in their coasters; “consumers were keeping the coasters to show friends,” reported Coronado Brewing’s Marketing Dept. press release. Coasters are a unique use of NFC tags because the craft beer industry is all about building brand trials, positioning the beer as being handcrafted and artisanal, and explaining quality. The coaster application certainly achieved the greater objectives. Coronado Brewing knows they must be real, accessible, authentic, and back it up by delivering the message with an experience of being new. Once a brand wins loyalty, the brand wins, states the company’s marketing material.
Coronado Brewing tested the NFC tag concept with ThinFilm of San Jose, CA and concluded: “A brand can do the following without the interference of search engines or social media platforms: Communicate directly with the consumer; provide a unique digital experience; and, surprise and delight customers on their terms,” commented Bill Cummings, Senior Vice President-ThinFilms Electronics ASA.
Barbadillo Wines, using ThinFilm NFC tags promoted a contest for consumers on their website form NFC generated visits, by using a series of uniquely generated entry numbers printed on each cork. Basically, they were promoting wine sales at the retail level and at home when the wine was opened. “With SpeedStep (ThinFilm brand name) tags applied, consumers are able to interact instantly with products and the brand by tapping the product tag with their smartphones (no app required). The tap launches the brand’s customized landing page video or another digital asset on the smartphone,” said Cummings. “The ThinFilm application was not on the label, although it could have been, but rather on a bottleneck collar.”
Immediate benefits of the ThinFilm effort was a 10-fold increase in traffic versus social media and a 2.8x increase in average time spent on the site. Further, Barbadillo sold significantly more wine.
In the alcohol-related product business, the TTB dictates the requirement of wine labels and it is a rather complex approval process to get a label designed that meets TTB requirements. That fact notwithstanding, there is important information, to me, not currently on a wine label that I would appreciate, especially when I look for a new wine.
From a nice-to-know vantage point, there are other bits of information I would find interesting that would probably push me to become a brand loyalist. Looking at a 3.5-inch diameter bottle, it simply doesn’t lend itself to a great deal of copy about the product; small print doesn’t work for me because I always forget to wear glasses. NFC could come to my rescue when looking for more information about a wine.
Here is a potential scenario to illustrate my point.
Assume you walk into your favorite wine store to look for a nice wine as a hostess gift and you are interested in getting more information about the wine that is on the label; such information as suggested food pairings, information about the winemaker, past wine awards, how big is the winery, comments about the wine from other consumers. This is important information you might like before you buy the wine. Maybe it isn’t information that is life-saving, but it certainly would be nice-to-know. Further, I would probably become a loyal customer and maybe join their wine club.
Today what are my options to get ancillary information? I have long learned that large discount retailers are not a reliable source of information. Maybe you come home and do some research online. But there is an easy way to get more information. The easiest, and most economical would be the NFC tag on the bottle; the label or a stick-on tag would allow the consumer to tap their smartphone on the bottle. Once the consumer taps the NFC tag their smartphone would pull up a website where all ancillary information about the wine would be available instantly. The information format can be anything.
Any winery or consumer can easily experiment with NFC tags. In fact, by going to Amazon you can find many manufacturers who will sell 6 NFC tags for $8.00. These are thin flexible tags about 1-inch square, although NFC tags can come in various sizes. Then go to YouTube and learn the easy task of writing (programming) to the tag. As a consumer, you will start to wonder why the wine, beer and distillery industry isn’t running to this technology for their new labels.
Before rushing into this technology wineries need to understand that there are back-end costs associated with finding the best alternative to integrating the NFC technology into labels. Then there is the issue setting up the tag with the information desired to be on the tag. Then there is the issue of integrating the tag, customer and product interface.
Thus far we have explored NFC tags in general, highlighting myriad applications for the wine, spirits and beer industries and have mentioned QR codes. It is important to understand, there are similarities between NFC technologies and the ubiquitous QR code. Any smartphone with a camera and a QR reader app can retrieve information from this code. NFC is the newest label technology to retrieve information via programmed coding. Google and Apple use NFC technologies for their payment systems. Most smartphones currently produced are equipped with NFC tag readers.
To use a QR code, a business decides what they want the QR code to link to and uses a computer program to generate the image.
Anyone can generate a QR code for free. I have generated 2 QR symbols, one for my vCard and another was another that was a graphic image and text about Image of Wine, LLC. These were relatively simple to generate; just fill in an online form. After generating one QR code I needed to change an e-mail address and phone number. The problem was that I had already printed a new brochure and business cards with the now obsolete QR code. I had to re-order all the promotional material.
After experimenting with NXT’s NFC tag’s, I found I could re-program the tag with my smartphone; granted it was only one tag.
A static image of the code must be printed on advertising or product packaging. AS I found out, if anything changes about the product or information, a new QR code must be generated and printed on new material and old materials must be removed from the market. Further, QR codes are read by a smartphone camera and the success of reading a code can be contingent on ambient lighting, quality of the image, colors used and the camera itself. One good thing about QR codes, they can be generated for free and NFC tags require creating a design and encode the tag. In the end, NFC tags are more reliable and versatile than QR codes. For large volume information, both options require a landing page.
QR codes can take a consumer to specific information on a website and provide static information; however, the security and convenience of a QR code are not equal to that of NFC tags. Further, information directly retrieved from the QR label really depends on the size of the QR image; the larger the image the more information. NFC tags do not need to be visible to work.
If customization is going to be an issue with bottles of wine, a QR code must be visible for scanning and the colors used must be dark enough for the smartphone camera to read. Further, the consumer must open a QR code reader to scan the image. Conversely, NFC tags offer complete freedom of design options because the tag can be hidden and not compromise the integrity of the label image/branding.
In 2015 Mr. Tony Rosati of Trust Point Innovations wrote about QR code and NFC tags. He said, “NFC tags are more expensive (on the order of $0.10) than printed QR codes printed on a label. The verdict: QR codes could be replaced with the more convenient NFC tags; however, there is an additional cost. It is reasonable to assume that product manufacturers would want to take advantage of consumer convenience and security.” Further, “NFC tags are really easy to use – just tap the tag. No special application to open, it’s built into the smartphone, and NFC tags are much more secure than QR codes.”
The intent of this article is to explain a new technology the alcohol industry should be exploring as NFC technology is becoming mainstream; it is a relevant marketing tool embraced by today’s consumers.
Consumers seem to love technology when it really can work for them. That same thought is transferable to the winery, distillery, and brewery. With all the conversations surrounding labels in the wine business, consumers must wonder, why not NFC tags-convenient, quick, flexible, leading-edge method to distribute information and build loyalty.