A few years ago, cereal maker Kellogg apparently sought to protect its Corn Flakes brand from "fake flakes" by laser-etching its logo on them.
While that opened my eyes to the apparent presence of a seedy underworld trafficking in black market corn flakes, Crown Holdings (CCK 1.41%) just revealed a more mundane use for laser etching: branding opportunities that engage consumers and create customer loyalty.
Source: Crown Holdings.
Using previously developed technology that was deployed by Coca-Cola in the Middle East during the 2010 FIFA World Cup, Crown announced that it is providing that technology to North American beverage brands -- but with a twist. Here in the U.S. and Canada, a focused laser beam will remove just the top coating of the tab to reveal the company design or message, but companies will also have a choice of exposing just the clear coating beneath or revealing a second coating color.
Crown, Ball (BLL 0.64%), and Rexam (NASDAQOTH: REXMY) are the three largest beverage can manufacturers, accounting for 60% of the supply globally. While the other two packaging specialists also offer tab etching, Crown says it is the only one in the industry that offers laser-etching on both the top of the tab as well as underneath. Coke used those capabilities for its World Cup promotions by offering prizes that could only be revealed after the can was opened.
Crown says that beverage tabs are yet another means for companies to reach and engage their customers. Because of their high visibility and the fact that consumers have to interact with them to open the can, beverage tabs can become "prime real estate for images or messages that reinforce a brand's identity or positioning."
These new tabs apparently have been available for years in Europe and Asia, but are only just reaching U.S. shores. While Ball dominates the North American market, which is the largest one, Rexam says that market is contracting and the real opportunities lie with emerging markets.
That seems to underscore the results Crown witnessed last quarter after revenues in its Americas beverage division fell almost 2% while rising 4% and 20% in Europe and the Asia-Pacific region, respectively. Ball also reported weak demand for beverage cans in the Americas, but also in Europe.
With Crown having the smallest share in a weakening market, double-sided laser-etched tabs could be enough of an innovation to give the company a chance to gain ground on its rivals. With its shares trading near their recent highs, the beverage can maker might be one stock investors want to keep tabs on.
