PL Buyer's eReport August 5, 2008

August 6, 2008
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Looking Good, Feeling (Environmentally) Good
Retailers can benefit by taking a closer look at the entire packaging supply chain.


With so many products vying for consumers' attention, shelf impact remains a high priority in the store shelf battlefield. To achieve both profitability and environmental sustainability goals without compromising product integrity or shelf impact, consumer packaged goods (CPG) companies should take a look at their entire packaging supply chain, according to Atlanta-based Georgia-Pacific.

Small changes can provide big results, Georgia-Pacific recently said in company-written article. CPG companies can optimize packaging without incorporating drastic changes -- through small packaging redesigns, for example, or by using lighter-weight material.

Georgia-Pacific's Packaging Systems Optimization (PSO) consultancy program employs a team of engineers that analyzes the entire packaging supply chain and delivers a detailed report to CPG companies outlining areas where cost-savings, profitability and sustainability can be mutually achieved.

"What we found over time was that cost-savings and shelf velocity or shelf appeal go hand in hand," Georgia Pacific's Pat Smorch, director of packaging and sustainability, told eReport editors. "You don't want too much of one and not enough of the other."

Smorch also noted that the PSO program is not just for national brand products.

"Private label has the same opportunities to make changes as non-private labels," Smorch noted. "They're making a lot of the same products, and sometimes it may be easier to make a small change in private label."

Smorch added that private label products and national brands alike could benefit from taking a look at secondary packaging and optimizing the way things are shipped and handled. Larger changes could include removing multiple packaging components and replacing them with a microflute primary package that would give a high print quality and graphics capability on the carton, which doubles as a shipper.

Private label and CPG providers both need to figure out the steps needed to become more sustainable while keeping an impressive impact on the store shelves, Smorch told eReport editors.

"You need to understand the supply chain in a very scientific manner as opposed to guessing what the right solution might be," Smorch noted.

 Our Take: When it comes to packaging, shelf impact and environmental sustainability aren't necessarily mutually exclusive. A few small changes can make a huge difference here.

The Green Scene

We See Your True Colors Shining Through
Consumers want companies to be as green as their products.


The New "Green AMPlified" study from Boston-based AMP Agency -- a marketing agency within the New York-based Alloy Inc. family of companies -- finds most consumers are concerned about the environment, but their move to purchase eco-friendly products is contingent on company practices, costs and convenience.

The survey found that while consumers feel acting in an environmentally responsible way is important, they believe corporations hold more of the responsibility to implement changeover. And many consumers now implement an eco-friendly evaluation into their product purchasing decisions, the study found.

The survey states that 53 percent of consumers factor a company's social and environmental activities into their purchasing decisions, and that these consumers are ready to reward companies that prove their commitment to the cause. In fact, after learning that a company is environmentally friendly, 57 percent of consumers are likely to trust the company, 60 percent are likely to purchase its products, and 58 percent are likely to recommend the company's products to others.

"What became evident is that 'green' is redefining business as usual," said Anastasia Toomey, AMP Agency's senior vice president, consumer insights. "Consumers are becoming savvy and inquisitive, increasingly challenging companies and their green claims and efforts [and] demanding certain factors in exchange for their loyalty. But with that also lies ample opportunity for brands to impact consumers in a positive way, no matter what shade of green that customer may be."

Our Take: Companies that claim to engage in environmentally sustainable business practices better be prepared to prove it. Today's consumers are beginning to question the motivations behind corporate "green" messages.

Eye on Health

Label This
A new survey says more consumers are reading food labels.


According to a new global online survey by The Nielsen Company, New York, nearly 65 percent of U.S. consumers say they notice nutritional information on food packaging more often now than they did two years ago. The survey also says that 67 percent of U.S. consumers claim to "mostly" or fully understand nutritional information on food packaging.

"As obesity rates continue to rise globally and with lifestyle-related heart disease the number-one killer worldwide today, there is increasing pressure on the food industry to play a greater role in educating consumers about what they're eating," said Deepak Varma, senior vice president of Nielsen Customized Research. "Given that so many consumers are taking time to read nutrition labels, there is also a marketing opportunity for food manufacturers to provide consumer-friendly information on labels that may entice shoppers to switch brands at the point of purchase."

The survey does note that 8 percent of U.S. consumers never check nutritional information, which is consistent with the global average. Moreover, 42 percent of consumers globally say they check food labels for preservatives, while only 24 percent of U.S. consumers say they do.

Our Take: This study provides further evidence that health and wellness are top of mind with today's consumers -- certainly "food for thought" in terms of new product development in the store brand arena.

Bits and Pieces

What's News in Private Label
Among the most notable retail and private label news:  
  • Schnuck Markets Inc., St. Louis, recently held two private label promotions for associates and customers, according to the July 20 edition of the TopNews newsletter from Skokie, Ill.-based Topco Associates LLC. The Soldier Patrol event for associates was held in March, while the Brand Adventure for consumers was held in June. Ten associates and nine customers, selected from more than 10,000 entries, received $100 for every Schnucks or Topco brand the Prize Patrol found in their homes, the newsletter said.
  • UK-based Tesco will revamp more than 60 Fresh & Easy stores located in California, Nevada and Arizona, according to Britain's The Daily Telegraph. The first location will be in Fresno, Calif. Its new design will incorporate a mural depicting the historic nature of the site and surrounding area, along with a clock tower.
  • Loblaw Companies Limited, Ontario, Canada, said it launched the new Scarborough Loblaw Superstore in a continuation of the company's long-term commitment toward environmentally responsible retailing. The 120,000-sq.-ft. store will be the largest food retail store to be Leadership in Energy and Environmental Design (LEED) certified in Canada , and will be a prototype for future Loblaw stores. Eco-friendly items incorporated in the store include motion-activated LED lighting in freezer cases to cut energy use by approximately 50 percent, as well as multiple waste diversion streams to meet Loblaw's target of diverting 70 percent of its waste from landfills.
  • Minyard Food Stores Inc., Fort Worth, Texas, is selling its 23 Latino-themed Carnival supermarkets -- along with five Minyard stores, five fuel centers and nine Sack'n Save warehouses -- to The Grocers Supply Co. Inc. of Houston, the Dallas Business Journal reported on July 24. The Grocers Supply Co. already owns and operates the Fiesta Mart chain.

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