- Baby Non-Food Products
- Baking/Cooking Staples
- Household Products
- Kitchen Products
- Paper Products
- Personal Care
- Pet Products
- RESEARCH & AWARDS
As subdued as the category might be, it doesn’t operate under the retail radar. Today’s turbulent economy has left no aisle of retail untouched - even the humble foil, wraps and kitchen storage category has been shaken by the economic pressures being put on manufacturers, retailers and consumers.
Data from Chicago-based Information Resources Inc. (IRI) show that over the 52 weeks ending Feb. 24, 2008, the performance of the foil, wraps and storage category is a bit of a mixed bag. For example, total category unit sales are predominately down, yet in the dollar sales department, mainstay items such as foil, plastic wrap, waxed paper and sandwich/freezer/food storage bags experienced either significant increases or sizeable decreases. The one constant throughout the various segments is private label’s tendency to mirror the performance of national brands - good or bad.
Regardless of what the numbers look like on paper, the private label industry is optimistic about the category’s growth and its ability to perform independently of the national brands in the future. A squeeze on consumers’ disposable income is helping to stimulate private label sales, while product innovation also is helping to revitalize deflated segments.
“With the cost of living getting higher, the average American likely will spend more time preparing his or her own meals. Therefore, the consumption of products such as plastic wrap is expected to see a stronger-than-average growth rate in the next few years,” predicts C.B. Kam, director of marketing for Fine Vantage Limited, Kowloon, Hong Kong. “And with a tight budget in mind, consumers will be more willing to try the house brand as a substitute to the national brand.”
The foil, wraps and storage category might not be too flamboyant, but lately, consumers are being wowed as they reach for items in the section. A major movement in the overall category toward innovative products is breathing new life into the stagnant market.
“For too long this had been a category driven by a commodity mentality; now we are seeing creative products bringing growth to the category,” remarks Perry Malik, business unit manager for Minigrip Consumer Products, an ITW company, Seguin, Texas. “Creating new products that consumers want to buy and retailers want to sell has brought a lift and some creativity to the category.”
With this cautious mentality, the private label industry often is content to sit back and wait for the national brands to make the first move when it comes to new product introductions. But this game of follow the leader often can have some detrimental results for private label, says Erica Gretz, senior product manager for Presto Products Co., Alcoa Consumer Products, Appleton, Wis.
“Private label companies need to be responsible about the new products they develop and offer,” she says. “Not all national brand products are successful, and following a national brand product too quickly without a proven sales track record could result in a private label offering that is not going to sell at a desirable sales rate.”
Although the industry has a tendency to emulate the national brands, there’s been a significant movement within private label to branch out and go beyond what the brands are doing, and this is especially true in the foils wraps and kitchen storage category.
According to Malik, a number of forward-thinking private label manufacturers in the industry are taking the lead in new product development. These folks are doing more of the trend-setting with innovative retailers who have “best-in-class” private label programs, he adds.
The types of products being offered by such innovators include re-sealable steam bags in various sizes; larger-sized storage bags between 3 and 22 gallons; home storage for non-food items; and “mixed” packs with multiple container sizes sold in a single retail unit.
“Store brand suppliers are quickly adapting to [these types of ] new entries, offering a store brand version that delivers value without compromising performance,” says Eileen Norton, group marketing manager for Webster Industries, Peabody, Mass.
Kudos to the private label industry for aggressively pursuing differentiation by way of product innovation. But once a private label product is introduced, attracting customers to try the store brand item and retaining their loyalty are difficult tasks.
“It all comes downs to communicating with your customer,” says Kelly Hilgert, product manager for Berry Plastics, Evansville, Ind. “When a retailer takes the time to ask their customers what they want to see on the shelf, the product mix and quality standards become very clear. Customers have high expectations for private label products, so if you give them the quality and value that they expect, loyalty will follow.”
The Green Machine
One of the main reasons green products are so attractive to the foil, wraps and storage category is that many products in the category contain plastic made with petroleum-based resins - an eco-taboo in today’s market. In addition, these items are particularly susceptible to escalating costs associated with today’s rising fuel costs.
“With gas prices at an all-time high, you have to believe there is going to be an increased effort in finding alternative solutions to plastic products, while also encouraging more post-consumer content and recyclable packaging,” says Charlie Dettloff, consumer insights manager for Berry Plastics Corp., Evansville, Ind.
For right now, the greatest green potential for foil, wraps and storage is in the packaging arena, and for good reason. According to Fine Vintage Limited’s Kam, reduced product packaging can result in substantial costs savings for manufacturers, retailers and consumers. Kam says to keep transportation costs down, manufacturers of private label plastic kitchen storage products should consider using a smaller, thinner unit box. He also suggests manufacturers offer a thinner-gauge plastic film that can achieve the same product performance with less packaging material.
“Personally, I think green packaging just makes sense,” Kam adds. “Consumers pay less and use only what [they] need. And in the meantime, supermarkets can make the same amount of profit.”
Because the green trend has gained such momentum within the retail landscape, product manufacturers in nearly every category of the store have chimed in with their version of “green.” Although this is great news for the environmentalist in us all, the eco-boom also has inspired “green-washing,” where manufacturers make false or overstated green claims to take advantage of the concept’s popularity with consumers.
As the green-washing continues, Minigrip Consumer Products’ Malik predicts the category will “begin to find products that ‘pretend’ to be environmentally friendly, but are really nothing more than marketing spin.”
But Malik doesn’t foresee total decay of the industry’s most prosperous trend. Acknowledging the good and the bad, he simply states that a lot of confusion exists over what constitutes “biodegradability” and “compostability” for plastic products, as well as labeling guidelines for alternative resins.
“It will help when the federal government adopts standards of definitions for green products in this category,” he adds. “I think every manufacturer in the category wants to be a good steward of the environment, but what’s difficult is figuring out what ‘environmentally friendly’ really means and sorting through the hype.”
As manufacturing costs continue to increase and product prices continue to rise, consumers will turn to private label for relief. In the foil, wraps and storage category, where thrills can be nil, store brands have the potential to wow consumers with innovation, value and environmental responsibility. All it takes is a desire on the part of retailers and manufacturers to keep the category fresh. PLB
Sidebar: Green Where It Matters Most
Eileen Norton, group marketing manager for Webster Industries, Peabody, Mass., offers a solution to this catch 22 scenario. With regard to the trash bag side of things, Norton suggests offering (and educating consumers about) plastic trash bags made with recycled content.
“The low-density polyethylene [LDPE] recycled plastic trash bags produced by Webster Industries provide significant substantiated benefits [to consumers and the environment’,” she says. “Based on U.S. Environmental Protection Agency data, recycling LDPE saves about half - 46 percent - of the greenhouse gas emission associated with the production of virgin plastic trash bags.
“Since greenhouse gas emission are a major contributor of global warming, Webster’s recycled content trash bags provide a clear environmental benefit.”
And, According to Norton, retailers also benefit from such green product offerings. She notes industry research that shows consumers prefer stores that clearly exhibit efforts to be environmentally conscious, or green. What better way to display your store’s commitment to the “green point” than by offering store brand in the aisles that need them most?