Is Your Product’s Packaging Holding Your Company Back?
Good product packaging can be the difference between making a new lifelong customer and missing a sale. It’s not uncommon for food companies to cite a change in packaging as the reason for increased business. After all, you only get one chance at making a first impression.
For small food companies, packaging (which for our purposes includes bottles, boxes, bags, labels, hang tags, etc.) is one of the primary ways of reaching out and “touching” target audiences.
Packaging is how consumers learn about new products and make buying decisions. Because shoppers are loyal to brands they like, one purchase can result in a long and happy relationship between company and consumer. And as we know, a recurring customer is the best type of customer.
David and Goliath
A huge portion of all foods and beverages sold in America are produced by small businesses. These products often taste better, are more nutritious, and offer economic, social, or environmental benefits to boot.
On the other hand, small food manufacturers face a unique set of challenges compared to the mega corporations they compete with. Small companies typically invest a higher percentage in ingredients and production, and a lower percentage in advertising and promotion. This puts them at a disadvantage when it comes to communicating with potential customers.
So, how are small food “Davids” supposed to compete with industry “Goliaths?” This article offers 5 reasons why revisiting your product packaging may help you do just that.
Reason #1: Shelf Performance
If you’ve been in the game for a while, it’s a sure thing you have a quality product. Compared to giants in the field, you probably offer good value too. But if shoppers don’t pick your product off the shelf, they will never discover its many benefits.
You don’t have an ad budget like the big players, so you can’t bombard consumers with nonstop messages (you probably wouldn’t, even if you could). This means point-of-purchase is your one, and perhaps only, chance to engage with potential customers. It means you have just a few precious seconds to say, “Hey, I taste great, give me a try!” or, “I’m better for you than the cheaper alternative right next to me!” or, “I’m helping to support our local economy!”
Fortunately, creating an effective label or package doesn’t have to cost a fortune. Nor does it have to be a complete gamble. Package design is an art and a science. Experienced marketing and design professionals know that what you say and how you say it are key to first time purchases. After that, it’s the product itself that will have them coming back and telling friends about their “great new discovery.”
Of course, packaging includes more than what’s printed on a substrate. You should also take into account container shape and texture, lid shape and color, and other elements that contribute to the overall effect.
To perform well on the shelf, your package needs to serve as a “silent salesperson.” It must speak for your product until shoppers taste what’s inside. You worked hard to get your product just right. Now do the same with your package.
Reason #2: Access to Larger, Diverse Markets
For most small food companies, there are other audiences to consider even before end consumers: retailers and wholesale distributors. Unlike end consumers, these business entities are principally concerned with maximizing profits and minimizing obstacles. Space is too valuable to be taken up by products that are low margin, high maintenance, or non-performing.
“Middlemen” care how your package looks for practical reasons. Seasoned buyers often have strong opinions about what makes for a “good” package. For example, a homemade look may work well in farmers’ markets but not in larger retail environments.
One of our recent clients experienced a schism first-hand. The quality of their product is second to none. Their track record is impeccable and their sales have been growing steadily over the past 10 years. However, when they reached out to buyers further afield—specifically, a large chain of natural food stores and a small chain of gourmet shops—they were met with the same message: “Your packaging doesn’t work for us.”
Their product line was a hodgepodge. As new products were introduced, labels were designed in relative isolation. They acquired another company and continued to use its labels. This approach got them through the early years, but larger retailers and chains expected a more polished look. We’re now working with them to achieve that necessary look.
The aforementioned buyers weren’t happy for another reason. Our client’s packaging didn’t comply with the U.S. Food and Drug Administration (FDA) requirements. This brings us to the third reason you might want to refresh your product’s packaging.
Reason #3: Make It Legal
Navigating FDA (and/or other regulatory bodies) legal requirements can be a daunting task. Add to that health or structure/function claims and 3rd party certifications—and creating a “Kosher” package can seem almost impossible (Kosher may be another certification hoop to jump through). It’s no wonder graphic designers, even some who accept packaging assignments, make mistakes.
Larger store and chain buyers may sometimes overlook aesthetic deficiencies, but will rarely take on a product that isn’t legal. Exemptions that pertain to limited production and regional distribution cease to apply beyond a certain volume and range.
Here is a brief overview of the standards a food label must comply with to be legal.
- Two spatial designations: 1) primary panel; 2) information panel. Locations and sizes are determined by measurement and mathematical calculation.
- Five elements: 1) Statement of identity; 2) Net weight; 3) Nutrition Facts; 4) Ingredients; 5) Statement of origin (add. of mfg. or dist.). The size and placement of these elements are also specified. Note that special claims are subject to further regulations.
Could lack of legal compliance stand in the way of growing your business?
Reason #4: Competitive Pressure
One of our clients told us it seems like there’s a new competitor popping up every couple months. Though clearly an exaggeration (we hope), the barriers to starting a company are lower than ever, and the reasons to do so higher than ever. This is great news for aspiring entrepreneurs, but not for companies that previously enjoyed a non-crowded marketplace.
Again, you only have a few seconds (at best) to introduce your product and convince a potential customer to buy it. Those few seconds could mean the difference between no sale and a lifelong customer.
Try this: Visit a store that sells your product (or products) and put yourself in the shoes of a shopper. Ask yourself:
- Does your product capture your attention first?
- Does a competitor’s product stand out more?
- Does your package get you to pick it up and take a closer look?
- How does your package compare to products you trust and regularly buy?
Your answers may yield surprising results. Small business owners spend so much time inside their companies it can be hard to see objectively. But remember, the vast majority of consumers are seeing your product for the first time. Your packaging needs to attract, appeal, differentiate, and deliver.
Reason #5: Growth Through Branding and Line Extension
Whatever your growth strategy—diversified product line, expanded geographic reach, or entry into a new marketplace—enhanced packaging can make all the difference.
Almost always with consumer products, and to a lesser degree with B2B products, creating a recognizable brand is key to growth (consumers relate to stories, and brands are all about stories). Investing in clarity and continuity pays ample dividends. Brands build goodwill and pave the way for robust sales. Effective brands make strategic use of narrative, imagery, colors and other graphic elements that help consumers understand and relate to a product.
Stonyfield Organic is a great example of this. Their initial product was yogurt. As the company grew, leadership decided to explore other options. To grow the business, they knew they would have to grow the Stonyfield brand. After much experimentation and many iterations, their product line today includes yogurt pouches for kids, YoBaby for babies, frozen yogurt, bottled smoothies, milk, and more. Stonyfield was able to achieve its goals because it invested in brand building, not just individual product packaging.
If you think your product packaging might be in need of a refresh, here are some next steps to think about:
- Talk to retailers. Your sellers are on the front lines and see a wide variety of products get sold. Reach out to them and see what products are “hot” or what products seem to garner the most attention by customers. What you hear may surprise you.
- Conduct a shelf survey. As we mentioned in this article earlier, taking a walk in your customer’s shoes can be a great exercise. Walk through a few stores that carry your product and try to look at the shelf objectively. And remember, your product doesn’t need to please everyone. In fact, it’s probably better if it strongly appeals to just one type of customer.
- Sign up for a free consultation at Hannah Grimes Center on Monday, August 3, 2015. If you’d like to discuss your product’s packaging with experts in the field, we’re here for you. Send an email to firstname.lastname@example.org and we can discuss your packaging over coffee.
Greg Elizondo is a Marketing Associate at Peter Harris Creative, a marketing communications firm in Keene, NH. Greg holds an MBA from Antioch University New England in Organizational and Environmental Sustainability.