It’s Alive! Augmented reality brings labels to life.

Remember, about 10 years back, when everyone was excited about QR codes? When scanned with a smartphone application, these black and white boxes would bring up a designated URL linking to product information, video clips, or other promotional material. Trouble was, the codes weren’t visually appealing, so putting them on a label could cheapen a brand’s image.

It also didn’t help that brands didn’t go out of their way to create original, engaging content for their QR codes; instead, they would often route potential customers to their website home pages to fend for themselves. Looking back at QR codes now, they seem almost Flintstonian in their functionality—especially when you compare them to today’s augmented reality (AR) technology.

 

What is AR?

If you’ve ever played Pokémon Go, you’ve already experienced AR. Just download and open an app, view a specific item or scene through your camera, and a hidden world pops up on the screen. Unlike virtual reality (VR), which uses special glasses or a headset to shut out the physical world, AR adds digital elements to a live view.

The most famous example in the beverage world is the Australian wine brand 19 Crimes from Treasury Wine Estates (TWE). The labels feature photographs of real-life British criminals who were exiled to Australia in the 18th century. When viewed through Living Wine Labels, TWE’s AR application, the characters come to life to tell their stories with stunning realism.

For wine marketers, the labels represented a giant leap forward in customer engagement potential. “We were looking for ways to break through and tell our story in an innovative way,” says Ming Alterman, director of digital for TWE. “AR was something you could do not only at home, but also at a crowded wine shelf.”

The labels were an instant hit, commanding viral attention around the world. In the 12 months following the 2017 label launch, 19 Crimes sales increased more than 90 percent, reaching 1.4 million case depletions. To date, TWE’s Living Wine Labels app has been downloaded more than 3 million times.

TWE quickly expanded the technology to additional wine brands, including The Walking Dead, Beringer Bros., Chateau St. Jean, Gentleman’s Collection, Matua, Embrazen, and Lindeman’s. “[AR has become] a huge component of all of our marketing plans and our digital eco-system,” Alterman says.

 

Repeat customers

While the 19 Crimes labels entertain and tell stories, those of other TWE brands have different goals. Using 3D animation, the Chateau St. Jean labels tell the tale of winemaker Margo Van Staaveren meeting her husband, Don, at the winery. On the Beringer Bros. label, a historic photo of the brothers comes alive as they discuss their new winery venture.

“What I’m focusing on is getting the users to come back to Living Wine Labels, instead of viewing it once at a dinner party and putting it away forever,” Alterman says. “We’re looking to create stories that have multiple chapters or to add promotions that live on the app.”

To let consumers know about the labels’ AR features, TWE created end caps, bottle neckers, and other point-of-sale items for retail, and promoted the app through social media channels. Once a user downloads the app, they’ll be shown the additional TWE brands and wines that feature AR experiences. The labels are also promoted in tasting rooms such as Beringer’s, which features an AR area where visitors can see the app in action.

“It’s something that’s not only been first to market but has endeared us to our consumers, distributors, and retailers,” Alterman says. “It’s really differentiated us on the shelf, and you can see that by a lot of our competitors following suit.”

More AR apps emerge

Because the cost of developing a new AR app starts at around $50,000, the technology is out of reach for many small producers. But as AR’s value as a marketing tool gains attention, more companies are making the investment.

In fall 2018, Rabble Wine Co. in Paso Robles, Calif., introduced an AR label app for its red blend, then extended it to its cabernet sauvignon and rosé wines. The labels feature detailed artwork from the Nuremberg Chronicle, an illustrated encyclopedia from the 14th century that depicts catastrophic events such as the destruction of the city of Florence by comets, complete with flames and explosions.

According to winery President Caine Thompson, the images lend themselves perfectly to AR experiences. “The whole label transforms into a moving piece of art,” he says. “When you see it for the first time, it really is one of those moments where you’re blown away that technology can meet such a traditional industry and create something of pure joy and excitement, where a label is brought to life.”

Reaction from consumers and trade has been overwhelmingly positive. “Every time we open the analytics, we’re just gobsmacked by the number of views and the extent of sharing people have done on social media,” Thompson says. “It’s completely blown our expectations out of the water.”

 

Promoting a region

The Sonoma County Winegrowers (SCW) association is also tapping into AR. Bottles bearing the AR-enabled Sonoma County Sustainably Farmed Grapes label are expected to hit the U.S. market in early spring.

“We thought this would be a really fun way to work with our winery partners by using the label to create storytelling across different wine brands,” says Karissa Kruse, president of SCW. “Younger consumers like sustainability and are thinking more about that when it comes to wine. We’re trying to find a way to break through with that sustainability messaging in a way that’s fun and innovative.”

When users scan the wine label through the Sonoma County Sustainable Wine app, a 3D image of a vineyard wraps around the wine bottle. An animated pickup truck then travels from the vineyard to the winery to a store and, finally, to a person’s home, telling the sustainability story along the way. “We’ve essentially created a 45-second TV spot,” Kruse says.

Because the technology doesn’t require any special coding or images, wineries can use their existing label designs. Those participating in the initial launch include Ferrari-Carano Vineyards & Winery, Dutton Estate Winery, Dutton-Goldfield, Cline Cellars, Frances Ford Coppola Winery, and Lynmar Estate. “We paid for the original six wineries to participate to get us launched,” Kruse says, “and now there’s just a nominal programming fee for any additional winery that wants to come in.”

 

Play the game

Interactive games are another way to engage customers through AR. With the launch of its cannabis-infused wine brand this spring, Napa, Calif.-based House of Saka will debut an AR app based on its female warrior label. The app is still in development, but company founder Cynthia Salarizadeh says it will include mini games. “The average consumer is still not educated about the many ways cannabis can be consumed, so our industry relies on creativity to spread the word,” she says. “We wanted an AR label because it’s the next big trend in branding.”

Beer brands are also experimenting with AR, though to a somewhat lesser degree than wineries (so far). The app from Snoqualmie Brewery in Washington state, launched in 2017, animates the waterfall on its Sno Falls Pale Ale label. The AR app from Virginia’s Devil’s Backbone, launched in early 2019, displays animated stories about its Vienna Lager, Golf Leaf Lager, and Striped Bass Ale, as told by the company’s brewer. The Striped Bass Pale Ale features a singing fish that croons about clean water and oyster restoration in the Chesapeake Bay.

 

Technology and talent

The apps for TWE, Rabble Wine Co., and Sonoma County Winegrowers were all created by Tactic, a San Francisco, Calif.-based studio specializing in AR technology (it also collaborated with J. Walter Thompson San Francisco for some of the Treasury work). Along with wine labels, Tactic develops packaging-triggered apps for everything from dog food to cosmetics to cereal.

In addition to engaging users with memorable AR experiences, Tactic’s app platform provides analytics and social sharing capabilities. “We can see which wines people bought, based on the labels they’re scanning, and monitor how they’re moving up the price-points and trying different wines and brands,” says Tactic President Peter Oberdorfer. “It gives us a direct connection to the consumer.” Tactic complies with the European General Data Protection Regulation (GDPR), and if a user “opts in” within these guidelines, a variety of analytics can be gathered within the mobile platform from the AR applications.

“With 19 Crimes, we found that people were using the app between seven and 10 times, and that they had a median engagement time of more than three minutes,” Oberdorfer adds. “That’s a long time to engage with a branded app.”

The platform also lets clients add content at any time, which is important for an app’s continued success. “That way it doesn’t become a one-trick pony,” Oberdorfer says. “It gives us a content channel to keep engagement ongoing.”

Another AR app development firm working with the beverage industry is CitrusBits, based in Los Angeles and San Francisco. The firm is creating House of Saka’s app, as well as an app for an unnamed beer brand. Along with providing robust analytics for clients, the CitrusBits platform will give users the ability to directly interact with the products through games.

 

Advancing technology

One hindrance to AR technology, at least for now, is that consumers must download a different app for each company’s AR experience. And, if the content is particularly detailed, it can take a minute or two for it to download before the user can view the experience.

“At the end of the day, AR will win when the technology is resident on your smartphone and you can put the camera up to any shelf and see a bunch of stuff,” says Paul Mabray, CEO of the brand insights software Emetry. Usage will also become more widespread, he says, when apps such as Delectable, in which users scan wine labels with their smart phone cameras, incorporate AR into their experiences.

Despite its current limitations, Mabray—who’s long pushed for the wine industry to do a better job embracing technology—sees AR as a big step forward on the innovation front. “Wine is one of the best use cases for AR among consumer product goods, because it’s such a wide retail shelf,” he says. “There are so many products, how do you stand out? I think AR is a beautiful thing in so many ways, we just have to harness it and be strategic about it.”

If not, Mabray warns, AR could fizzle out after a few years of initial excitement: “My biggest concern is that it will fall into the QR code chasm. We need to leverage it properly and deliver great experiences.”

 

Related: VR Visitor Experiences