How is your packaging?
When was the last time you looked at your packaging? No, really looked at your packaging? We are talking in the store, beside the items you compete with and in front of consumers who need to select your product off the shelf?
Often, packaging is developed and a relief to have it work and then we move on. Understandable but perhaps not the right perspective.
It might be time to take a good look at your packaging and consider the environment where you will be competing. We see the following impacting your decisions:
Consumers are more focused on value
Sustainability is impacting more consumer behaviour
The changing consumer is influenced by different product benefits
Regulatory changes are coming
Value influences the decision at the shelf
We know food inflation is a topic of conversation. Consumers are pre-conditioned before they even get to the store that they are paying more and they will be looking for opportunities to reduce their grocery bill.
Consumers are creatures of habit, but they have become more interested in finding an opportunity to save some money. This can be product size, trading to private label, looking for discounts or perhaps even shopping in a new channel such as dollar stores.
Consumers do complain when a product changes size but often this is the right decision. They do not understand the economic model you are working with. If you are the largest package in the category, you might be losing sales. Yes, they can do the math and sometimes the shelf label will do it for them, but they also want to keep the total bill lower.
If you are not producing private label, you do need to ensure your packaging communicates your value proposition effectively. Give them a reason to buy as opposed to losing them to the retailer’s brand.
When you look at your packaging ask yourself, or perhaps someone impartial, if the value in the offering is being communicated. Value does not always mean lowest price. Is it clear how many servings are in the product? Consumers are bombarded with thousands of messages every time they go to the store. Your value needs to be clear to your target market.
Sustainable packaging can be the difference
Consumers are demanding sustainable packaging, retailers want options in categories and regulators are forcing change. Sustainable solutions can also lead to a premium that some segments of the market are willing to pay.
Consider these two examples. Royale paper towel in a plastic free package is the only paper towel in this store. My only suggestion for them would be to really accentuate the difference with a different colour paper. It is great to be plastic free but there is still some work for the consumer to figure this out. Perhaps a brown paper look would have been more effective.
Humble chips are the only chips in a compostable bag. We know it is more expensive, because Jeff from Humble Chips told us in our SKUFood recipes for success podcast (which will be released soon!). They are committed to this packaging and they believe their target market is willing and able to pay the premium it requires.
Have you read the Environment Climate Change Canada (ECCC) pollution prevention (P2) planning notice? As the document states, “The P2 Notice would set requirements for Canada’s largest grocery retailers to prepare and implement a pollution prevention plan (P2 plan), with an aim towards zero plastic waste from primary food plastic packaging.” Once again, the regulators are putting the onus on the final link in the value chain to enforce the policy.
There are many sections and details to absorb. As an example, we will focus on the section that outlines the plan for fresh fruit and vegetables which is 4.4 Objectives, targets and timelines. In this section under Risk Management is the following goal:
Fresh fruits and vegetables are distributed and sold in bulk and/or in plastic-free packaging
· 75% by 2026
· 95% by 2028
In other words, by 2026, 75% of produce sold in large retailers will need to be in bulk or plastic free packaging. By 2028, 95% of produce sold in large retailers will need to be in bulk or plastic free packaging. I am not sure what the number is today, but it isn’t close. When you consider the berry category alone there is a lot of plastic to deal with. This is huge change in a short period of time. Not to mention as growers and packers are dealing with inflation and other challenges.
This is not final yet and we will see more from ECCC after they review input from industry and other stakeholders. The pace of change is one area where many people are concerned. It will be interesting to see if Environment Climate Change Canada will listen and implement a less aggressive timeline.
European countries such as Germany and France have been aggressive with forcing the shift away from single use plastic. You might find solutions to explore in these markets. Regardless of where you find it, sustainability needs to be a part of your packaging review.
Consumers are changing and your packaging needs to speak to them
Immigration continues to change the face of consumers in Canada. Your packaging needs to communicate with your existing market but also these new shoppers. This might require you learn more about them and understand why they buy. Colours and messaging on your packaging will mean different things to different people. You cannot change everything but do your homework to make sure it does the best it can do.
Often these segments of the market are the opportunities for sales growth.
Regulatory changes might force you to change
We are not experts at the regulatory environment for packaging in the market. We always recommend you find someone who is an expert. This is a very specific skill set. We do know changes are coming in many items so if you have to change to satisfy the regulator it might be a good time to look at all the components of your packaging.
There is talk about new messaging on the front of packages. This might impact the room you have to communicate other messages. Retailers and distrobutors expect you to understand the regulations and present products that are in compliance. You really do not want to make the call to a customer that you need to make changes because your packaging was outside the regulations. You might not like them but they are a reality in our industry.
We know it is the fourth quarter and a key selling period for many products. It is the time of year we recommend you spend as much time in the stores as possible. When you are out there look at your packaging on the shelf and ask yourself if it could be more effective.
FCC peer groups are a great opportunity for food processors to learn from each other and share their knowledge. People from across the country come together online to talk about what is happening in our industry. I have had the privilege of facilitating peer groups for FCC the last few years. I have met some incredible food entrepreneurs. If you are interested and would like more information check out the FCC link below or give me a call.
Loblaw announced this week that the company was committed to working closer with small food and beverage businesses. There has been a local product program at Loblaw stores but this seems like a greater commitment to the concept.
We would give Sobeys credit for working with local vendors in every region. They have made it part of their positioning and a point of differentiation. It appears Loblaw have recognized Sobeys are ahead of them and might be trying to catch up.
Where is Peter Speaking?
We have been working hard to put together a new video to promote the work we do speaking at conferences and events. Hope you enjoy the video!