Shaking the Foundation of Packaging

Fresh-cut produce items are increasingly fighting for space on retail shelf space, but brand owners can take advantage of changing consumer trends to better market their products.

“When you talk about design, a lot of people think about aesthetics, but it’s more than that,” said Harry Epstein, vice president of innovations at HAVI Global Solutions.

The design of a package has to not only meet the market needs – supply chain or distribution specifications – but also meet the needs of consumers in the increasingly global marketplace, Epstein told attendees at the Packaging Strategies Design Conference, March 2-3 in St. Petersburg, Fla.

Retail consumers have myriad choices, even for value-added products. But designing packaging that communicates the attributes of the product to consumers can encourage first-time use of a product and drive brand loyalty. Epstein identified six trends in packaging design that producers should shoot for.

Consumer Trends

Better. Consumers in today’s market are applying healthy, wholesome lifestyle choices. Brand packaging that is designed around the health benefits of the product serves to educate consumers, and that builds trust in the product and the brand.

“That is the driving factor in increasing brand loyalty,” Epstein said. “There is a fascinating link between trust and education.”

More. Buyers today are looking for more of everything. They want more pleasure from their experiences and products and they want more variety. Everyday “splurges” have to offer a premium.

“Sometimes the same old experiences can get boring,” Epstein said.

One way to offer a pleasurable experience is to tell authentic stories. Hotel Chocolat, a marketer of premier chocolates, built its brand on ethical cocoa production, while offering an upscale shopping experience. In the produce industry, this can mean telling the story of growers or offering premium products that consumers can’t get elsewhere.

Comfort. Choice paralysis has led many buyers to seek out simpler, less complicated lifestyles and products, Epstein said. Family and balance of life are now more important than ever, so packaging should communicate the safety and simplicity of the product. Over-designing a package to lengthen shelf life or even to improve quality can turn off potential users looking for simpler products, Epstein said.

“We’re more concerned about the security of products and the supply chain they go through,” he said.

One way to comfort consumers is to be vulnerable, Epstein said. Being open about recalls or product failings.

“Vulnerability is an interesting approach to people. It’s an interesting approach to your brand and creates interest,” he said.

Belonging. People live networked lives today, which maximize connects to friends and family. This is primarily driven by social media. Using websites and social media to become one of those connections will help drive brand loyalty and encourage users of products to communicate its benefits to their networks.

“There’s a need for people to belong and have relationships,” Epstein said.

A novel use of this trend was from Smirnoff vodka, he said. The liquor manufacturer took an idea on its website and turned it into a reality – simultaneous parties based around ideas generated by social media users around the brand image.

Me. Consumers want products personalized to their desires, with the ability to customize to their needs. This type of participative consumption involves feedback with the producer, with input from consumers. The process builds a community that leads to word of mouth marketing, Epstein said.

“Consumers want to be perceived as unique individuals worthy of their own brand,” he said.

Now. Consumers are looking for products that free up and maximize their leisure time. Recent shopping data shows more affluent and expectant consumers are trading up more regularly, Epstein said, and they are willing to pay for the best for the feeling of instant gratification. In this type of “buy it now” consumerism, Epstein said companies must realign their products to reflect the changing perceptions of premium.

Emerging Markets

The trends in consumer shopping habits aren’t specific to the United States; globalization has introduced developing markets to new products and shoppers are demanding these new brands.

“What I’ve found with American companies is the external markets, like Asia, are hobbies,” Epstein said.

For decades, the American market was so large and dominant in global culture that brand owners didn’t have to develop regional products. But now, American culture is falling behind developing regions, and by 2020 these new markets will be demanding more options in their product mix and lower costs at retail, Epstein said. The challenge for companies in those markets is to understand what consumers want and deliver it in a way that meets the marketing and supply chain needs of the region, he said.

Sustainability

Packaging design has increasingly moved toward sustainable production over the last decade, and Epstein said it would continue to grow. For producers, it’s not about sustainability – it’s about survival. The driver in sustainability is from consumers and retailers,

“If your customers want it (sustainability) and you don’t, you may lose 5 percent of your business. If your brand owner wants it and you don’t, you better be prepared to lose half of your business,” Epstein said.

New technology using natural raw materials are making it easier for companies to package sustainably. He sees the film and fiber packaging options growing, as global demand for petroleum makes rigid plastics less affordable. Film already has sustainable options, and fiber is getting better, and has the added benefit of being lighter, which reduces shipping costs, Epstein said.

He recommends being proactive, as many in the fresh food industry have, which will end up benefiting companies in the long run.

“Being proactive costs money, but being reactive costs a whole lot of money,” Epstein said.

Marketing Mix

But if packaging is so important, what department in a company should pay for its development? Every department has different uses and priorities – be it sales, operations or marketing – and the messages on the packaging affect the departments differently. The package design and its messages could speak to brand image, customer satisfaction, store efficiencies or environmental benefits.

A manufacturer should do a cost analysis, taking the base cost of the packaging plus the cost of the added benefits, broken up by divisions. It’s a qualitative tool that companies can use to analyze and understand the packaging priorities, Epstein said. For example, the branding portion of the packaging raises public awareness and should be debited to the advertising budget, while the customer satisfaction costs of the package should go to sales. If the added cost of the package improves store efficiencies, such as reducing labor, then it’s an operations expense, and environmental benefits promote social responsibility, so that cost could be debited to the public relations department.

Epstein said one product that his company markets has a per-unit packaging cost of 2.58 cents, of which 1.74 cents is the base cost of the packaging. The added benefits of the package make up the remainder, including item-level costs like brand image, which adds .37 cents to each pa