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Never underestimate the importance of packaging in private label. It’s often the first point of communication with shoppers, relaying a vital brand identity—a valid
The Top 5 Touchpoints
point regardless of the respective tier of private label, from value to national brand equivalent (NBE) and national brand better (NBB). The packaging should enable an intuitive interaction between user and product, adding value—a vital point for private label—and convenience whenever possible. It should demonstrate thoughtfulness—that the functional characteristics and nuances of the product were taken into consideration during design. Does it protect and preserve quality? Does it streamline ease of use? Does form equal function? Finally, does the packaging have minimal impact on the environment? Using 100 percent renewable—and recyclable or compostable—materials is no longer a fringe exception; it’s approaching the norm. Nothing about a given private label product should raise a potential red flag for the user, stymieing repeat purchase.
While the intensity and importance the developers of private label lines place on these various touchpoints of packaging will certainly vary, each should enter into the discussion during the earliest stages of R&D.
One question private label developers need to ask themselves when approaching packaging decisions is, “Why would a product use this packaging format?” Sometimes products remain stuck in ruts as we unduly rely on history as a guide to decision-making. With no questions asked, potentially innovative answers remain unvoiced.
Consider breakfast cereal. The standard approach through the years—and still the prevalent method of packaging today—is a six-sided cardboard box containing a heat-sealed high-density polyethylene (HDPE) liner bag that is not resealable (or recyclable…).
When consumers venture into new territory and sample a store brand for the first time, the test of acceptance begins. One of methods private label developers can employ to add value to a product is to carefully consider the packaging in terms of what we’re asking it to do.
The standard approach to packaging breakfast cereal invariably leads to premature staling and potential messiness (no resealable bag). One step developers can take is to use resealable inner bags, as seen with Target’s Archer Farms granola products, which note that fact clearly on the front of the box (“Reclosable Inner Bag for Freshness”). Other manufacturers have eliminated the dual-packaging model altogether and have begun using stand-up, resealable flexible pouches for breakfast cereal (and many other products). Making use of recyclable materials is also a plus.
Another example of challenging tradition comes from shelf-stable soup, overwhelmingly still packaged in cans—and comprising a category that’s stagnant at best. “Soup might not be growing now due to the packaging format,” said Suley Muratoglu, vice president, marketing & product management for Tetra Pak Inc.
A packaging format that increasingly resonates with today’s consumers, and particularly Millennials, suggested Muratoglu, is cartons, some of which have retort capabilities—but enabling a gentler retort process than is required with cans.
Trader Joe’s has started using cartons for some of its soups, including its Organic Tomato & Roasted Red Pepper Soup. Bold, vivid graphics are par for the course, providing a strong shelf image, and the screw cap on top helps ensure easy, mess-free dispensing—and a means of storing the product in the refrigerator in its original packaging.
While shelf appearance in the store is vital to completing a sale, that game changes once the product is in the home. At that point, packaging quality and functionality will prove instrumental in helping secure repeat purchase.
According to the most-recent MWV (MeadWestvaco Corporation) “Packaging Matters” study results, released in February 2013, fewer than 20 percent of U.S. consumers report they are “very satisfied” with product packaging. Two excerpts from the statistics:
• Only 11 percent of respondents are “very satisfied” with carry-out containers like pizza boxes
• Only 24 percent are “very satisfied” with carbonated soft drink packaging
Retailer branding efforts can step into this gap—and work to close it. The MWV study analyzed consumer satisfaction with packaging throughout the product lifecycle across 10 product categories.
“There’s a huge opportunity in our categories to talk about packaging use,” said Steve Kazanjian, vice president of global creative for MWV. This involves talking to shoppers about their expectations for packaging, gaining real-world feedback to see which aspects of product packaging elicit an emotional reaction.
Significant opportunity exists to foster this brand-centric dialogue through transparently managed, lightly moderated online forums—whether via a retail banner’s official corporate website, or social networks like Facebook, Twitter, Pinterest. Taking intentional steps to engage shoppers in this regard not only serves as an insight-mining process, but ideally creates a meaningful connection contextually centered on a retailer’s private label products.
According to the most-recent MWV (MeadWestvaco Corporation) “Packaging Matters” study results, released in February 2013, fewer than 20 percent of U.S. consumers report they are “very satisfied” with product packaging.
Various types of flexible packaging, including pouches, continue to invade shelf space—often for highly valid reasons. But again, form must equal function. And slight improvements can add noted value, again closing the gap on indentified packaging shortcomings. “Our research shows that while consumers appreciate the high-quality graphics, potential for reduced package waste and the portability and convenience of flexible pouches, there are still areas in which these designs can be revised so consumers are not forced to trade down to purchase products in flexible,” said Jill Ahern, consulting solutions senior director, Packaging Technology Integrated Solutions for HAVI Global Solutions. “As an example, gusseted pouches have a tendency to tip over when stored in the pantry, and can be awkward to pour from when larger in size and with no dispensing feature. So while snacking and confection products have made the transition to flexibles very well, other products, especially liquids or those sold in larger size, may not be as well-suited to conversion in today’s flexible pouch.”
Not every product category requires significant boat-rocking. At times, the best course of action is classic simplicity—with a twist. The upscale glass-bottled 750 ml PC Black Label sparkling beverages from Loblaws gain an edge with classic “lightening” bail-and-stopper closures, a product attribute that very well could inspire users to repurpose the bottles when done (and using easy-remove labels on the bottles would help facilitate this tacit reuse).
The produce department of most grocers presents multiple opportunities lying in wait. For a requisite uptick in price, an increasing range of consumers have shown interest in value-added produce—peeled, precut, mixed, recipe-ready, etc.
Just look at how the bagged salad market has grown over the past decade, a segment currently valued at over $2 billion annually. But even this success story could stand significantly better management via packaging designs that better extend shelf life beyond use of gas flush/modified-atmosphere packaging (MAP), which should already be standard across the board.
Serving size diversification can help. Forward-trending single-serve, packaged salad bowls represent an extension of this concept. And selectively packaging other foods throughout the deli, bakery, prepared foods and/or foodservice departments, along with associated cold cases, into single-serve options likewise poses significant opportunity.
As noted in the November 2013 “Produce Packaging” report from The Freedonia Group, the market for produce packaging is projected to grow by 3.3 percent annually through 2017, eventually hitting an estimated $5.7 billion.
While convenience might be in the driver’s seat, another part of this story is packaging’s role in helping improve produce food safety, pointing the way toward packaging with tamper-resistant measures. Packaging produce, and other foods traditionally not sold packaged, also opens the door to a retailer’s ability to step in with private branding and associated marketing of the lines—all of which will drive these efforts forward.
Convenience formed the primary innovative thrust when the first laundry detergent pods, with water-soluble packaging that completely dissolves, hit the drawing board. Costco quickly jumped on board, and its Kirkland Signature Ultra Clean Laundry Detergent Pacs knocked the ball out of the park—effective, precise measurement every time, no mess, and typically sold at a 30 percent discount to the leading national brand (and private label laundry detergent packet/bar products are up 549.39 percent in terms of dollar sales for the 52 weeks ending November 3, 2013, per SymphonyIRI). Other laundry, and dishwasher, products have already moved into this area, as have some bath products like bubble bath and bath salts/crystals. What’s next for water-soluble/dissolving packaging?...
Another monumental packaging development of late is the ever-present K-cup. Single-serve coffee has skyrocketed, and now retailers and the rest of the private label industry are scrambling to find appealing, new applications for the technology. But a well-known caveat to the K-cup is its environmental footprint, as the standard hybrid packaging is neither recyclable nor compostable. But technology is gaining a foothold on this bogey, and recyclable, compostable and biodegradable are starting to come to market. Early adopters of these environmentally responsible packaging choices will undoubtedly broadcast that differentiating factor far and wide, factoring into how the chips fall for the rest of the category.
The clock is ticking down to the time when environmental concerns related to packaging will become a relatively moot point. In the not-too-distant future, using packaging that’s 100 percent recyclable, compostable and otherwise quintessentially “green” will be the price of entry into nearly every product category. It will be expected. Those who eschew these measures will eventually be the exception and not the norm.
As we approach this eventuality, taking a leading edge with sustainable packaging initiatives will do much to strike a differentiating chord with shoppers. For instance, creating a closed-loop recycled packaging system within a retail organization—and boldly promoting that fact—can do much to build buzz within increasing segments of consumer groups, and particularly Millennials. One example would be to work with a packaging partner who would pick up store-generated recyclables (cardboard, plastic, glass, etc.), recycle them, and then use those materials as the starting point for new packaging used for that retailer’s private label lines and other needs.
Retailers and manufacturers who are early adopters of next-generation packaging for private label lines will often catch the national brands by surprise, potentially growing from NBE to NBB. It’s a matter of approaching packaging with a mindset of thoughtfulness and care, hitting all requisite touchpoints. It’s a necessary component to overall branding—and private label product success.
“There is money to be made with ‘me too’ fighter brands,” said Mike Richmond, vice president, Packaging Technology Integrated Solutions for HAVI Global Solutions, “but revenue and margins come with differentiation, not sameness.”