FD Buyer: What You Need to Know About Packaging and Brands
By Mona Doyle,
founder and chairwoman, The Consumer Network
Through
a special arrangement, presented here for discussion is a summary of
a current article from Frozen & Dairy Buyer magazine.
Packaging
has more influence on consumer buying decisions than ever. Packaging
adds value, keeps products fresh longer or makes them easier or harder
to use, open, reclose, carry, store, pour, understand, and throw away.
Here are three
key points to keep in mind:
- Reduced advertising and
broadcast media power mean that the package is the only way the brand
communicates with many consumers. - Shoppers see many packaging
attributes as consumer-responsive. Deciding to buy a brand that is
consumer-responsive, even if it costs a little more, is rewarding to
consumers and fits their perception of how things ought to be, e.g.,
that companies should give them what they want and make money by making
them happy. - The three eco-R’s, Reusable,
Refillable, and Recyclable are joined by Less Packaging in making shoppers
feel good about buying.
Now let’s
look at some important packaging attributes.
Multipacks: These
sell well in the dairy case because many shoppers, especially parents
of younger children, see them as a way to control portions, reduce product
waste, and give little kids packages that are just right for them. Busy
parents of young children also want packages that fit on the refrigerator
doors that they "open and close 100 times a day," often while carrying
a baby.
Reusables: Many
shoppers just can’t get enough reusable packages, whether wide-mouth
jars, Chinese food containers, or empty packages of cottage cheese or
whatever. The appeal comes from a combination of thrift, storing and
gifting leftovers, and eco-friendliness. (Consider how popular reusable
bags have become in supermarkets.) The dairy case used to be a major
source of free reusable packages. Now most yogurt cups come with non-resealable
foil lids which use less plastic (which consumers like) but are less
resealable or reusable (which they don’t). If one of your vendors decides
to reintroduce snap-on yogurt tops, stock them and see if they fly –
even at a slightly higher price.
Handles: Half
gallons and even quart containers of milk and other beverages increasingly
come with handles, making them easier to pour, carry and balance. Whether
the user is weak, shaky, small, or uncertain, having a handle makes them
feel better about themselves – always a powerful selling tool.
Discussion Question: To what degree do you see eco-consciousness driving packaging changes versus functional considerations, such as handling and storing?
Both eco-friendliness and functionality should play a role in packaging considerations. It’s up to the manufacturer to strike a balance, taking into account consumer and retailer reactions.
As baby boomers age, more packaging will need to fulfill their needs and fit their eco-friendly outlook. As their children leave their households, packaging will need to keep products fresh longer or come in smaller sizes to accommodate meal portions.
This discussion dovetails well with recent columns on in-store marketing. Well thought out packaging and in-store marketing can influence consumer buying decisions, meet retailer expectations, and help the environment.
I love it when we get someone writing a completely contradictory column for us to respond to–it makes a BrainTrust panelist’s job so easy.
There is no evidence that packaging plays a bigger role today than in the past. Indeed, Vance Packard fans might point to the more naive 50s and 60s as the hey day of packaging’s influence.
There is little evidence that eco-friendly packaging drives purchasing–indeed, we’ve done some research that suggests that a green package is actually worse for a business, both at the brand and category level.
Multipacks, re-usable packs, and added handles all add cost to the packaging and increase their carbon footprint. So anyone who is eco-shopping should be less interested in these features.
Finally–who among us chooses a product because we’re thinking about the re-usability of the package?
When the world’s biggest retailer makes packaging reduction and sustainability a gradable metric for its suppliers, those metrics quickly become the baseline (not an option).
It’s hard not to use Walmart’s Great Value re-do as a prime example of where all of this is going. Packaging reduction makes for a smaller brand billboard? Make the brand call-out larger-than-life on the space that you have. Need to keep costs down? Cut back on photography and…did I say anything about making the (one-color) brand call-out primary? You may not be able to bury a Great Value bag or box in the back yard and grow flowers (though don’t rule it out for the future, of course), but underestimating the deceptively simple results of Walmart’s intensive research would be a mistake.
RSR has run retailer “Green” benchmarks for the past 2 years. In the first year, packaging was the number one way retailers felt they could get “greener” and achieve cost-savings at the same time.
This year, the economy weighed more heavily on our respondents and they looked to reduce costs at stores as their number-one opportunity.
I think as economic conditions return to normal, retailers will again look to packaging (both inner and outer packs–corrugated has, and will always be a big cost center) as an eco-opportunity.
Clearly this is an opportunity…it’s time for both. Using less packaging is something consumers prefer, but keeping things safe and easy to use is standard.
Why not both? Personally, I’ve gone back to purchasing egg cartons that are corrugated. I feel so much better about that purchase and the cost savings is still there. Milk cartons can be recycled, so that handle better still be in place.
Each product/company will have to make its own eco/cost benefit analysis and how it can best serve its market because the consumer is figuring all of that out as she shops.
Whether or not packaging innovation is a compelling driver of purchase, we will see a push toward eco-friendly packaging (i.e. “less is more”). Manufacturers will do this because less packaging generally means less cost. And the “green” cover they receive from the press allows them to do it while touting a benefit instead of defending a cost reduction.
This tactic is effectively used in many industries to capitalize on “external environmental forces.” Think the airline industry and no longer being able to run to the United gate with your American ticket when AA was running late. Or tickets restricted to the original passenger’s use–and requiring $150 “Change Fees” to do that.
Using a publicly accepted “need” to provide cover for otherwise sound but unpopular financial decisions is becoming a standard marketing tactic.
Look to the women’s market and you’ll see that more eco-sensitive packaging is worth the investment. It may not be the be-all and end-all, with a mom trying to buy wisely for her family in a bad economy, but it is gaining in importance.
As more women become aware that it is possible to package products with the reduce-reuse-recycle mantra in mind, they’ll fold that into the big list of ways they evaluate the brands they purchase. Women see their purchases more holistically (it all matters)–but brands need to commit to knowing their unique consumer segments very well in order to evaluate how much weight that particular market will put on eco-packaging.
The importance of packaging in consumer decisions is not a trivial matter, as Mr. Needel implies in his prickly comments about Ms. Doyle’s column. For a very recent and hilarious demonstration of the negative extreme, see the “Curb Your Enthusiasm” episode from two weeks ago.
It starts with Larry David destroying a new GPS device because he can’t open the clam shell packaging. Following his friend’s advice, he purchases an over-the-top Exacto knife from a sporting goods department, where he can inspect a sample from a display case.
You can guess what happens. At the end of the show, when he really needs a knife and goes for the recent purchase, still in the shopping bag, he finds it entombed in a clam shell package. Stomp, stomp.
So, rather than digging up obscure references to prove a point (Vance Packard? Was he a car guy?), I would like to see BrainTrust Panelists support their positions with relevant examples. Larry David does qualify. He has a knack for exposing minutia of everyday life. Certainly he capitalizes on Everyman’s prickly little pains, rather than advocate for change to mitigate the pain.
I think that is what the BrainTrusters mostly do in this newsletter. Increasing the carbon footprint of a package may be necessary, if it means that the consumer can better use the product. (Example: Aleve has a fancy cap enhancement to help arthritis sufferers get at the pills that will take away their pain).
Plus, in the total scheme of things, a reusable container should lower a consumer’s carbon footprint, shouldn’t it? In my humble opinion, we need more discussion about research into the consumer’s environmental impact using products, less on individual product impacts.
Full disclosure: I write for Frozen & Dairy Buyer.
I believe that we are in for a long, green ride. Companies that wish to be good corporate citizens of the world will recognize the opportunity to contribute through their packaging. Whether consumers are drawn to brands because of that is a big question.
Product value is a high priority for consumers. For the time being, that isn’t changing. However, as awareness builds, marketers will experiment with messages and packaging that leverage their eco-friendly behavior. I believe it’s too soon to predict the outcome.
It’s important to segment this question by demographics and psychographics. Gen Y, with a population of over 100 million and an average age of 18 years old, has demonstrated a deep concern and focus on “green” issues. As they age, they will impact the market far more than the boomers ever did. Like it or not, eco-friendly packaging will be a differentiator.
Coming back to the boomers (like me), the flip side of the question relates to the earlier discussion about the Larry David scene. I, and more than a few of my friends, have had our “Larry” moments and, as a result, refuse to buy any product entombed in this Marquis de Sade packaging. While the boomers’ impact on the market is diminishing, there are over 76 million of them and they are still a powerful determinant of success in a wide range of categories. Consumer Product marketers who continue to ignore the difficulty of opening their products will, at a minimum, sub-optimize their revenue potential.
Like I said, the first step is understanding the demographics and psychographics of the target marketing.
As Brandowners have made sustainable packaging an objective, better choices continue to be made across the value chain. There are countless options in materials used for packaging from the substrate(s) to the thickness to the decoration, so package engineers and developers are keeping the end of life in mind during design.
There are many new tools to help achieve eco-efficiency that help professionals make choices based on functionality. Print systems can be used that are soy-based inks–particularly for food service and shipping containers. Printing directly on the container rather than using printed labels. Design the container shape to achieve better shipping density, for greater strength in molded containers and weight reduction. And many more….
In looking at features and attributes that add value through better usage for consumerd or prevent damage or easier handling, there is a design palette of packaging options that are less harmful to the environment. As awareness grows, material and design choices increase to provide desired functionality with less weight and waste.
Packaging has to work to deliver the brand message from the shelf, and attract shoppers from the aisle; to protect the product during distribution, to open and reclose easily, and to keep product fresh in the pantry or fridge. The significant change in thinking is that from beginning to end of useful life, be very mindful about the resources used and how packaging might be reused or reclaimed, rather than adding to a landfill.
We in the CPG world trail many other industries in the green packaging evolution. Knowing that packaging is often a higher expense than what’s contained in it, consumers are quickly realizing this, and rewarding CPGs/retailers with their green efforts. Of course, the best thing, obviously, is that less packaging and more basic, less stylized packaging typically costs less than current packaging. Additionally, using food-based, rather than petroleum-based containers is gaining attention globally.
There’s no ignoring the fact that packaging is an enormous concern for consumers who care about the environment, and are trying to live in a way that reflects this desire to live in a more eco-conscious way. And this is a constituency that we believe is continuing to grow–even in this economy. Issues like budget and convenience will certainly continue to be key factors influencing consumers’ purchasing decisions, no doubt, but the commitment to cut down on the use of goods (and individually packaged ones at that) is one of the key themes resonating among the online community of green moms, and not only within the “crunchiest” and “greenest” niche herein, which is why phrases like “frugal AND green” are becoming increasingly common. Based on what we’re seeing, environmental considerations as related to packaging will become only more important, as consumers push companies to balance cost and environmental impact.