The stereotypical marketing model that favored ad hoc creativity, mass media investments, and a nebulous connection between spending on marketing and returns is long gone. Process, metrics, and technology should rule and drive successful marketing today and in the future. Equally transparent is a strategically advantageous venue where consumer food companies can make the transition from the old to the new model—in their packaging.
More Attention to Packaging Needed
With food companies spending up to 7% of their variable costs, $60 billion or so, on packaging, it should be astonishing to learn that most of them do not employ trained packaging professionals or apply principles of packaging development to reach out to retailers and consumers with innovation. Such companies tend to rely on suppliers (who may or may not be valid sources) for novel packaging for their products.
In recent years, the traditional model of developing the product and at the last possible instant rushing to the packaging technologist—or the purchasing manager—and demanding a new package for the product has been shaken by computer-driven management methods.
Even though the food industry continues to be a launch platform for numerous innovative technologies, there are not enough and not nearly as many as are feasible. Many companies are not taking sufficient advantage of packaging to fully differentiate their products in the marketplace.
Some of the most significant new categories and brand successes have been the direct result of the integration of brilliant packaging: yogurt and its descendants in tubes; sipping soups in microwavable multilayer barrier plastic cans; salty and sweet snacks in automobile cupholder–friendly canisters; plastic beer bottles; case-ready fresh red meats; and refrigerator multipacks for carbonated beverage cans. And many product successes have been triggered by packaging technology, including fresh-cut vegetables, retortable "bucket" multilayer plastic barrier cans, and multilayer barrier plastic squeeze bottles for condiments. Even this overwhelming evidence fails to sway some food companies into adopting a sound approach, much less any approach, to food packaging.
Three-fourths of all consumer packaged goods purchase decisions are made at the retail shelf. Packaging is a principal component of the "moment of truth"—those brief critical seconds between when the consumer first spots the package and when he or she selects the product. Implementation of packaging-driven brand strategy entails the accurate and precise synchronization of the touch points where and when the consumer encounters the brand.
Some organizations know well how to develop packaging. Some, however, persist in treating packaging as a last-moment exercise to complete the launch phase of a complex marketing/product development plan—and are surprised when the introduction falls short of projections. And despite the company expenditure for materials and equipment and the potential return, some companies today do not even employ trained packaging resources on either a full-time or a consulting basis.
Effective Packaging Development
Leading food companies have replaced their functional focus with a new emphasis on process and results. They have recognized that not all of the world's knowledge resides within, so they balance internal and external resources to achieve winning results.
Done well, marketing assets converge at the proper venues, generating an echo effect that amplifies the effectiveness of brand-positioning strategy. Begin with a marketing objective, complement the route with a daring product development charter, and permeate the process with a foundation of sound science and technology—objective packaging development that enforces and reinforces the best-known practices. Comprehensive attention to the target consumer represents the best process for value delivery.
Here are some approaches being offered to improve the packaging development process:
• Integrated solutions. Packaging and Technology Integrated Solutions (www.pti-solutions.com) offers a comprehensive packaging development methodology, the PTIS New Package Development Process™ (see diagram), which specifies key work that needs to be considered for each area in the packaging development process. A critical element for packaging innovation is the ability to draw from the packaging research pipeline, where new ideas and concepts that are in development can be incorporated as components for the food packager.
Packaging development requires a defined cross-functional team identified early in the process. This leads to the identification of an extended or Integrated Value Chain Model™ that includes a variety of external members (design agencies, suppliers, converters, equipment engineers, consumers, distribution channel members, and usually consultants) who are important in delivering the best project success results.
This differs from the traditional value chain—a linear link from primary raw material suppliers to converters to food packagers to retailers to consumers, with some feedback loops. That archaic thinking leads to low innovation, low value, and high money and time cost. Unfortunately, too much of this nostalgia still pervades many food packagers.
• Flow Tools. Several flow tools for new packaging development are being offered by companies such as Paxonix, 3M, Amcor, Pacvantage (Exxon-Mobil), and Interchange Digital. These methods are derived in part and potentially limited by the perspectives of the firms that developed them. Nevertheless, work-flow process tools such as these should have a positive impact on the packaging development process, innovation opportunities, and speed to market in the future as they function as enabling tools.
With automated packaging development derived from computer-driven flow control, the packaging development organization may be trained to shift from the traditional—and comfortable—manual development processes to digital, including on-line process initiation; on-line review of results and designs; modification to adjust based on results; on-line approvals by management or production; and rapid collaboration of technical, design, brand, legal, engineering, production, and, of course, marketing management. Immediate savings in time and its corollary, money, accrue.
Perhaps more important is that the tasks are delegated to the proper responsible professional staff with necessary resources to address the inevitable problems with appropriate stages and gates.
• Mindful Design. Stress Engineering Services (www.stress.com) and e Strategy Group (200 W. 11th St., Lockport, IL 60441) have asserted that "form follows function" in their perspective of supporting the shelf and consumer functions of packaging with technology that protects the contained food product.
Even if the differences between alternative packaging developments appear to be trivial, e.g., color or font size, issues of implementation still abound, leading to slow entry into the market. With developments more complex and even outrageous, companies are leveraging packaging (e.g., plastic coffee canisters or polyester water bottles with dispensing devices) for higher shelf presence and distinction for consumer functionality. Each difference may translate into more difficult-to-execute and more-expensive development. So the question is how can packaging innovations be generated quickly and effectively?
The two consultancies have simplified their reasoning into "mindful design," a process that integrates consumer experiences and needs with structure, function, and aesthetics. The process gathers and synthesizes knowledge of the market, trends, costs, and consumer attitudes and behavior, employing cross-functional qualified internal and external teams to derive the requisite information. Consumer insights drive the functional design, and consumers verify the decisions and contribute to moving the project forward.
Virtual package simulation, e.g., shelf life prediction by computer, delivers the earliest technical answers—a means of screening the best concepts. Key issues are resolved before going to numerous, and costly, technical and consumer iterations and tests. But the ultimate test remains the real-life situation—very few scale-ups or shelf-life realizations in packaging have ever succeeded from a protocept or computer simulation. The two notions—simulation followed by real-life evaluation of the best of the computer selections—applied in concert are today's accelerants of winning packaging innovation development.
• Packaging Development Software. When the information is imbedded in software, the entire process of packaging development becomes more efficient and measurable, according to Paxonix (www.paxonix.com), a MeadWestvaco company. The company's bold assertion that process, metrics, and technology drive marketing success is a paean to delivery of value through packaging. Packaged goods companies must make their statements to consumers through function and finally form. Managers must demand the same systematization in their packaging development functions that are now expected in their cost controls and communications.
Paxonix’s paxpro™ software organizes, assigns, budgets, determines, and ensures implementation of all the predictable packaging development events. It is claimed to promote integration of branding and packaging technology and appearance. Shelf impact is enhanced with innovation and accuracy. Packaging is consistent across the supply chain from concept generation to implementation. Comprehensible specifications are developed on a timely basis. And a number of simultaneous projects can be performed without diluting any one.
All innovative packaging development using these modern techniques is based on powerful managerial software whose success depends, of course, on the skill of the computer whiz and the marketing and packaging operatives. As a consequence, exciting prospects are present and on the horizon for tomorrow's food packaging.
by Aaron L. Brody,
Contributing Editor ,
President and CEO,