Private Label Buyer
Special Report - Focus On Packaging

Mass Appeal

June 15, 2012
juice bottle plastic packaging

Consumers say private label products look better than name brand counterparts when it comes to the packaging.

The days of flat, colorless boxes has long since passed the private label industry. From new shapes and sizes to colors, sustainability, and functionality, more private label products are looking like their name brand counterparts than ever before.

A recent survey from Ipsos Marketing showed that globally, 62 percent of consumers believe that private label products have more appealing packaging than their name brand counterparts. In the U.S. last year, that total was 56 percent.

As private label products have come into closer competition with name brand products, the need for top-level packaging has grown.

“Whether it is a private label product or national brand, the need to deliver the basic elements of performance and cost are the same,” says Mark Leiden, vice president and general manager of global food and beverage for York, Pa.-based Graham Packaging. “The expectation for demonstrated and consistent quality and alignment to food safety initiatives is also the same.”

Leiden says the transition of packaging in private label has been particularly visible in the past few years.

“Several years ago, it was more common to see private brands in a generic stock shape for most products,” he says. “While that still exists, the growth of private brands—and more specifically, premium brands—has brought about a greater interest in creating a ‘branded’ look to the package, separating the premium brand from standard private label. This helps the retailer position the product at a favorable price point between standard private label and the national brand.”

Some of that demand is coming from consumers, who are asking more from the products they buy at the store, whether they are private label or brands. Allison Buchanan, marketing communications manager at Alcoa, Tenn.-based Alcoa Packaging, says that is helping to push manufacturers to find new innovations in their work.

“[Customers] are also looking for customization; they want their products to do more,” she says. “It’s no longer OK to provide just a primary function. They want their products to do much more than that.”

One of the ways in which those demands are being met is through expanded capabilities of products. That could mean a new feature, such as a resealable bottle or pull-top can, or a sharper look or feel, says Daniel Abramowicz, executive vice president of technology and regulatory affairs for Philadelphia, Pa.-based Crown Holdings Inc.

“Consumers want value-added functionality, so it’s important to find a function that they’re willing to pay for,” Abramowicz says. “An aluminum bottle is a great example. Consumers see a value in that, whether it’s resealability or other functions, and that’s what I think consumers need to try to identify.What provides that function? Is it improved ergonomics, improved flavor, resealability, or something the consumer values inherently that makes the product better?”

For Leiden and Graham Packaging, those consumer demands are weighed with those of the producer and retailer. He cites a new multi-use stock beverage container that the company introduced, a 59-ounce, carafe-style bottle for the chilled beverage market.

Leiden says the bottle drew strong reviews from companies and retailers because of its size (which allows for a lower price point), its shape (adding to functionality), and its design.

One of the packages that is seeking bigger share in the marketplace is pouches.

Phoenix, Ariz.-based EnVision Flexible Packaging had made the move into pouches before the demand was there, says president Liesl Harder Kielp.

“The consumer is not initiating this event, a lot of product manufacturers are not initiating this, but we know this is the direction the market is going,” Harder Kielp says. “Everybody outside the U.S. is in pouches. We know that the pouch is a better package than a lot of things out there in terms of source reduction.”

Analyst Danny Beard, principal of Phoenix, Ariz.-based converter Packaging Specialists, says that while countries such as China, Japan, and Korea are more accepting today of flexible packaging than American audiences, pouches in private label products quickly are growing.

“Certainly pouches of all shapes and sizes are really very busy right now,” he says. “There’s a lot of interest, a lot of new products, but as much as anything, what’s interesting is that we’re just scratching the surface of what the opportunities are.”

Harder Kielp says the lighter pouch brought shipping advantages over traditional cans and bottles.

She cites research that showed a truck carrying quart-sized pouches could get 364,000 products on 26 pallets. It would take two men each two hours and a total of 52 forklift trips to load and unload the truck. And a 1,000-mile trip would use up about 250 gallons of fuel.

By contrast, to move 364,000 quart-sized bottles would take 234 wood pallets and nine trucks. It would take 18 man-hours and 468 forklift trips to load and unload the nine trucks. To carry the products 1,000 miles would cost 2,250 gallons of fuel and emit nine times the greenhouse gases of the pouch trip.

“Less weight has a lot to do with it,” she says. “There’s significantly less weight than cars or when shipping jars vs. shipping pouches.”

Weight also is a consideration at Graham Packaging, Leiden says, but it remains simply one of many parts that must be taken into consideration when putting together a product.

“Without a doubt, graphic appeal, sustainability, weight and consumer ease are attributes that are critical to both the packager and the retailer,” Leiden says. “When developing a container, our design group has to consider the targeted end-user for the product, as well as the fill process, delivery channels and retail display scenarios.”

Most of EnVision’s work is done in private label today, and Harder Kielp says more manufacturers and retailers are looking into private label pouching.

“A lot of people are testing the (private label) waters right now,” she says. “As they dip their toes in, we’re doing a lot of developing.”

Because of its lighter mass, pouches also bring sustainability benefits to private label packaging. It’s an area where retailers and manufacturers say they are working to promote, as consumers put more weight on environmentally friendly products.

“Consumers frequently state that they value packages that are friendly to the environment,” Leiden says. “Graham has multiple food packages in the market using bio-resins, along with other packages that contain high levels of post-consumer recycled content and/or have been lightweighted by more than 10 percent.

“We do not see this as a brand-only initiative. We see it working across both brands and private label, and through the retailers.”

What could we see in the future for private label packaging?

One possibility could be partnerships throughout the industry. EnVision recently entered into an agreement with Coyote Kitchen, a fellow company in Phoenix that manufactures and produces sauces, salsa and salad dressings.

Together, their FastTrak FlexiPak program will allow outside companies to test and produce their product in pouches without the up-front capital investment for equipment and training to handle the process themselves.

“We can manufacture a product, or bring in the product and just have it filled,” Harder Kielp says. “They don’t have to make the investment in the equipment if they run it through us. You might have to invest $25,000 or $50,000 to start doing some of this in your own facility. Or you can put it on ours and try it out for you and then make the decision.”

On the product side, Beard says a recent innovation at Walmart could lead to new applications in flexible packaging across the landscape. The world’s largest retailer recently switched over its bulk motor oil packages from large bottles to 5-quart bag-in-a-box items with a spout.

“I think it’s the first big step into the replacement of heavy, rigid packaging for traditional products,” Beard says. “Walmart came in and said, ‘We don’t want bottles, we want flexible packaging.’ And it’s been wildly successful. Instead of going in and buying five quarts of motor oil in bottles, now you buy one 5-quart bag with a tap on it. It certainly is a lot less weight in packaging, and it’s a lot less for scrap and recycling.”

Innovations even could come in expanding traditional categories with new twists.

“We’ve seen the proliferation of categories in soft drinks and beers that have a big presence in cans,” Alcoa’s Buchanan says. It speaks to what the consumer is asking for in their daily lives, and how does that drive product.”