Cheap Packaging Prevents Private Brand Growth?

Christopher Durham Aug 12, 2009 4

faribault beveragesThis guest post comes from David Hayslette, the Director of Retail Excellence at MeadWestvaco.  As Private Brand continues to grow and evolve, it is essential that packaging be on par with its national brand competitors. Private brand packaging quality should not be sacrificed for the sake of short-term gains. However, this level of packaging is simply the cost of entry for NBE. Private Brands packaging innovation can and should be the point of differentiation.

Over the last few years, Private Brands have increasingly demonstrated a willingness to invest in improving the quality of products in order to compete with national brands. So, shouldn’t packaging get equal consideration? Product investment returns can go unrealized when the packaging doesn’t match the quality of the national brand competitor. How many shoppers are still unwilling to try a private brand product because the packaging looks and feels inferior?

Because multiple manufacturers supply private brand products, packaging quality varies widely. To ensure consistency across categories, it’s important to specify materials and not just the artwork. Graphics are important but so are the canvas they’re printed on. So, you’ve invested in high quality artwork that carries the brand message and conveys value. Without a specification of the material, the actual appearance of the finished package will vary greatly. Without quality material, graphics can appear dull and lifeless. Packages can be crushed and bent because of cheap, inferior materials, destroying shelf appeal.

In a study commissioned by Mead Westvaco/Perception Research Services, we learned that 75% of shoppers will push a damaged package to the side in search of an undamaged one. Up to 55% will leave the brand and 36% will buy another brand. 29% of the most brand loyal shoppers will question product quality when packages are even slightly damaged. Damaged packages are a result of poor design, construction and or abuses during the distribution process that the packaging simply can’t handle.

Innovations in packaging should be driven by shopper insights. This shopper-driven innovation can lead to new, designs that increase usage occasions and category penetration. Distinctive designs can set apart a private brand from their national brand competitors. Functional improvements such as resealable openings and portion control features can set the pace for category innovation when the national brands are hesitant to change. Engineered packaging designs can further enhance private brand profitability by driving down activity-based costs such as labor, energy, David Hayslettedistribution and unsaleables while increasing sales velocity. Finally, the sustainability profile of private brand packaging can be dramatically improved with a thoughtful, deliberate approach.

In the end, when packaging is viewed as an integral part of the brand experience, equal in importance to the product itself, private brands will have their best success on the shelf.

David Hayslette is Director of Retail Excellence at MeadWestvaco, a $7 billion packaging solutions provider and is solely focused on supporting the private brand community with innovative, cost saving and sustainable packaging solutions.

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Christopher Durham

Vice President of Retail Brands at Theory House

Christopher Durham is the founder of My Private Brand and the VP of retail brands at Theory House, the branding and retail marketing agency. He is a consultant, strategist and retailer with close to 20 years of real-world retail and corporate experience creating, launching and building billion dollar Private Brands.

4 Comments »

  1. Joel Kirstein Aug 14, 2009 at 9:58 am - Reply

    One of the challenges that the PLB industry faces is working on such tight margins that the package design aspect falls to the wayside as a result a quality PLB doesn’t fulfill it’s potential.
    Bad design never helped sell more good products. Many smaller company lack branding savvy or see the value of design as an integral component of their PLB architecture. The sustained success of the PLB category is predicated on quality for less and the design aspect is critical to that narrative.

  2. Peter Keller Aug 14, 2009 at 2:37 pm - Reply

    Sometimes the packaging adds value, sometimes it detracts value, and sometimes it is just a cost of getting in the door.

    For example, I manage a private brand operation (white goods) for a national internet retailer.

    Our packaging is never seen by the customer prior to delivery. So- while poor packaging would reflect poorly on the brand as a whole, there is no need to match the national brands’ graphic design on the boxes, as the purchasing decision has already been made, and professional brown boxes are “good enough”. Any additional $$ spent on graphic design or printing is $$ that either comes out of our margin or the price we are able to offer the customer.

    Conversely, we often exceed the national brand’s quality in packing protection- as many of the national brands’ products are designed to be containerized or shipped via truck to the retailers, then carted home by the end users. Our products are containerized to our docks, but then largely ship via small parcel to the end users. So, we invest in packaging engineering/design beyond that provided by other brands- as this adds value to our market.

    • Joel Kirstein Aug 14, 2009 at 4:02 pm - Reply

      Hi Peter, your cited example is what is typical in the PLB category. The delivery system is a big part of the quality and the graphic design is truly secondary, although important. But I agree that great design work will never compensate for damaged product. Plus as more designers get into PLB package design, the quality of the graphic design in the category has improved and will continue to do so, helping the sell-in and perceived value of PLBs as a whole.

      Some of the best food styling, product logos and graphic design I have seen on packaging lately have been on PLBs. Loblaws and COTT, two venerable PLB legacies have always excelled at delivering top PLB products in quality delivery systems with outstanding branding design value as well.

  3. Joel Kirstein Dec 29, 2009 at 1:43 pm - Reply

    Happy Holidays! Without a doubt cheap packaging hurts the PL category because the past stigma still resonates with some consumers and PLBs have to succeed on their value proposition of “better for less.”

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