Is It Time to Change the Paradigm?

Packaging

What sets your fresh-cut products apart from your competition on the shelf? Is it time to be thinking about breaking out of the packaging paradigm?

Shelf differentiation can be a risky business, admits William H. LeMaire, managing director of PakIntell LLC, West Chester, Pa. If the packaging presentation is done correctly, great rewards can be in store; but, if done poorly, there can be a loss in market share.
LeMaire spoke Sept. 27 during the International Fresh-cut Produce Association’s (IFPA) ExecTrends 2004 fall conference in Alexandria, Va. He joined Mona Doyle of The Consumer Network, Bill Zinke of Ready Pac Produce and Craig Carson of Crunch Pak in a panel discussion: “How Smarter Packaging Will Drive the ‘Second Wave’ of Fresh-cut Produce Growth.”

It “takes guts” to change the paradigm, LeMaire warned the group. Companies constantly invest in differentiating their products in the marketplace. Sometimes they win, and sometimes they lose. However, the real rewards are going to those willing and able to think outside of the box and change the accustomed way of doing business.

In thinking about your fresh-cut products and how they are packaged, it may be time to ask yourself, “Am I thinking about my packaging within some established paradigm and should I be willing to break it?” LeMaire said.

Potential Rewards
The speaker pointed to several companies that have reaped huge financial rewards by innovatively differentiating their products in the marketplace. One was Dutch Boy, who decided to replace the traditional method of marketing paint in a sealed metal can with a plastic container equipped with a pouring spout and a mold-in handle. Today, Dutch Boy has another convenience: a built-in roller tray.

“Traditional paint cans have been around for more than 100 years,” LeMaire pointed out. “Everybody had given up on this package ever changing. It was hard to open, messy and difficult to close, but it didn’t cost much. The new package, on the other hand, offered a lot of improvements but cost 100 percent more.”

Dutch Boy management took the risk financially and came out heroes, he said. While they were forced to reduce container content 10 percent and boost prices 25-30 percent, sales increased, profits went up and overall brand image received a tremendous boost.

Other companies willing to break packaging paradigms include Sargento and Yoplait, Le Maire mentioned. A Wisconsin cheese company, Sargento invested in sliding zipper technology for its shredded cheese packages when rival Kraft, the industry leader, turned it down as too expensive for price-conscious consumers. In its first year with the new technology in place, Sargento experienced an 11 percent growth rate while the market average was only 4 percent. Yoplait, operated by General Mills, added similar sparkle to the yogurt industry. It created a whole new market category for yogurt by packaging its product, Go-GURT®, in a squeeze tube.

StarKist shook up the canned tuna market and gained market share with a reportable pouch, the speaker added. Frito-Lay broke out of the flexible package mold in snack packaging with its rigid pack for the grab-and-go potato chip market.

While fresh-cut produce is notably different from paint, cheese, yogurt and other products mentioned here, the concept is the same, LeMaire told the group. The marketer who can come up with the next most successful idea for packaging fresh-cut fruits and vegetables is likely to advance ahead of the pack.

Currently, the industry is experimenting with everything from re-closeable, zippered bags to stand-up pouches and unique tray/lidding combinations, he said. Graphics also are playing a major role.

Many Packaging Concepts
There are many packaging concepts out there, LeMaire explained. Stand-up pouches, for example, are used for fresh-cut fruits and vegetables in many European markets but little, if any, in the U.S. Because they stand erect, such packaging has to be “a little more rigid.” Solutions on how to successfully use them can be found “if we put our heads together,” the speaker said.

“We also are going to see more microwave ability in your product lines,” LeMaire predicted. “There are various self-testing films and valves for rigid packages. Many packaging designers look at how consumers are using their products in the home and then adapt their packaging strategies to meet those needs.”

Another innovative idea is the Salad Blaster concept, he said. This approach could have some applicability as it allows the consumer to put together his own salad. A salad dressing container is in the package.

RFID (radio frequency identification) also is expected to move more and more into mainstream packaging, LeMaire predicted. Wal-Mart already is demanding that its top 100 suppliers adopt RFID. At the moment, most RFID codes are positioned below the bar codes but ultimately are expected to replace them. More and more information, particularly time and temperature data, are being packed in to provide better information all through the system.

Will RFID ever appear at the individual package level? “I think it will,” LeMaire predicted, responding to his own question. “Not soon, but I think it has to; there are compelling economic reasons, and that is going to be another big challenge for you. Put RFID on your map for your distribution packaging first, but eventually you are going to have to move to the next level as well.”

Packaging “Doesn’t Measure Up”
Today’s busy consumers see packaged salads as a “breakthrough category” in terms of a convenient product but feel the packaging itself “doesn’t measure up,” reported Mona Doyle in her part of the discussion. Like dry cereal, once the packaging is opened, it is difficult to re-seal, and, if knocked off of the table, product goes all over the floor.

Consumers also dislike the package’s ability to retain freshness once the product has been opened, Doyle said.

Many are saying they don’t want to have to search for a tool-a knife or a pair of scissors-to open a bag, the speaker said. Is that really that big of deal? “Yes,” she said, comparing the experience to opening a can of soup.

“Nobody uses a can opener anymore,” Doyle asserted. Things changed after Campbell’s soup introduced pop-out lids. The technology has helped make preparing soup convenient. Today’s soups also are ready to serve.

While consumers give re-closeable, re-sealable packaging high marks for convenience most do not want to pay more, Doyle said. Yet companies, such as Kraft, often make the mistake of failing to recognizing that “there can be a big difference between what consumers say they will pay and what they actually do.”

“What I am paying is not what’s really at the top of my mind when I am buying something that works for my lifestyle or enables me to use a product more easily,” Doyle stressed. “The message here is that it’s very hard to underestimate the importance of easy-to-use, convenient packaging for today’s consumer.”

“Packaging is getting better and better. If you are standing still, you are constantly falling behind,” Doyle warned.

Crunch Pak’s Craig Carson said his company’s most popular package today is a 1-pound bag of sliced apples with a re-sealable zipper. Consumers like the package’s hermetic seal.

“If it was up to me, with no consumer input, we would not use a zipper,” he told the group, citing the challenges associated with such packaging. “We recently introduced an organic line in smaller, alternative package that does not have a zipper. Over the past few months, we’ve begun using an OTR film sealed at the top. The feedback has been encouraging.”

Like many other companies, one of Crunch Pak’s biggest challenges is trying to determine the future direction packaging will go, Carson said.

Innovative Packaging Hit
Bistro To Go™ salads have been an innovative hit for Ready Pac. These salads offer a generous portion and delicious combination of fresh, high quality ingredients. Proprietary packaging allows for the combination of fresh lettuce and protein ingredients such as chicken, ham, cheese and hard-boiled egg in one bowl. Separation of the produce, protein and condiments helps prevent flavor or color migration between components while delivering maximum freshness. Each bowl contains a small cup of salad dressing and a fork.

Such salads, according to Ready Pac’s Bill Zinke, are designed to offer consumers a salad that is as good as they might find in a restaurant. Freshness is maintained until the consumer decides how he or she wants to eat it.

“You make the decisions. You can use, or leave out, as much of everything as you want. You decide how much chicken, how much salad dressing,” Zinke said. “These salads are as fresh as you can get and still have a product with a reasonable shelf life.”

Bistro To Go™ salads are also reasonably priced and affordable, he said.

Ready Pac also markets ready-to-go Snack n’ Cups-various fruits and vegetables, including apples, celery and carrots. These are portable and eaten out of a cup holder, Zinke said.

© 2004 Columbia Publishing

 



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