The Homa Files

TakeAway: As businesses anticipate rising raw materials costs, consumers are beginning to encounter shrinking food packages. 

With unemployment still high, companies have tried to camouflage price increases by selling their products in smaller packages. 

Most companies reduce products quietly, hoping consumers are not reading labels too closely.  However, there could be some backlash as consumers wise up.

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Excerpted from the NYTimes, “Food Inflation Kept Hidden in Tinier Bags” By Stephanie Clifford and Catherine Rampell, March 28, 2011

In every economic downturn in the last few decades, companies have reduced the size of some products, disguising price increases and avoiding comparisons on same-size packages, before and after an increase. Each time, the marketing campaigns are coy; this time, the smaller versions are “greener” (packages good for the environment) or more “portable” (little carry bags for the takeout lifestyle) or “healthier” (fewer calories).  Trying to keep customers from feeling cheated, some companies are introducing new containers that, they say, have terrific advantages — and just happen to contain less product.

“Consumers are generally more sensitive to changes in prices than to changes in quantity,” John Gourville, a marketing professor at Harvard Business School, said. “And companies try to do it in such a way that you don’t notice, maybe keeping the height and width the same, but changing the depth so the silhouette of the package on the shelf looks the same. Or sometimes they add more air to the chips bag or a scoop in the bottom of the peanut butter jar so it looks the same size.”

Kraft is introducing “Fresh Stacks” packages for its Nabisco Premium saltines and Honey Maid graham crackers. Each has about 15 percent fewer crackers than the standard boxes, but the price has not changed. Kraft says that because the Fresh Stacks include more sleeves of crackers, they are more portable and “the packaging format offers the benefit of added freshness,” said a Kraft spokesman.  Similarly, P&G is expanding its “Future Friendly” products, which it promotes as using at least 15 percent less energy, water or packaging than the standard ones.  “They are more environmentally friendly, that’s true — but they’re also smaller,” said Paula Rosenblum, managing partner for retail systems research at Focus.com, an online specialist network. “They announce it as great new packaging, and in fact what it is is smaller packaging, smaller amounts of the product,” she said.

Or marketers design a new shape and size altogether, complicating any effort to comparison shop. The unwrapped Reese’s Minis, which were introduced in February, are smaller than the foil-wrapped Miniatures. They are also more expensive — $0.57 an ounce at FreshDirect, versus $0.37 an ounce for the individually wrapped.

In the culture of thinness, smaller may be a selling point. It lets retailers honestly claim, for example, that a snack package contains fewer calories — without having to change the ingredients a smidge.  “For indulgences like ice cream, chocolate and potato chips, consumers may say ‘I don’t mind getting a little bit less because I shouldn’t be consuming so much anyway,’ ” said Professor Gourville. “That’s a harder argument to make with something like diapers or orange juice.”  But even while companies blame the recession for smaller packages, they rarely increase sizes in good times, he said.  Once the economy rebounds, he said, a new “jumbo” size product typically emerges, at an even higher cost per ounce. Then the gradual shrinking process of all package sizes begins anew, he said.

Edit by AMW

TakeAway:  Package design is a critical part of a brand’s success.

At the point of sale a catchy package can make the difference between making the sale or not.

MillerCoors continues to evolve its gimmicky “cold cans” to try to boost sales in the ultra-competitive beer market.

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Excerpted from brandchannel, “MillerCoors Looks to Boost Marketing in Face of Beer Sales Slump,” by Jennnifer Sokolowsky, February 21, 2011

MillerCoors is hoping that cold cans will warm up beer sales this year.

The veteran brewmeister plans to increase spending on marketing and introduce new packaging for Coors Light.

The new Coors Light packaging will include an indicator to show when the beer has reached a “super cold” temperature …

Introducing new packaging is a strategy that has worked in the past to boost sales for Coors Light, which is expected to overtake Budweiser as the No. 2 selling beer the U.S. this year, behind Bud Light.

However, MillerCoors and other beer makers are also going to need an improved economy and more jobs for 21- to 32-year-old men to get them drinking more mass-market beer. …

Edit by DMG

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TakeAway: Diet Pepsi’s new skinny can is being met with controversy because of the perception that skinny is better and that this will influence the image issues young people face nowadays regarding their body types.

Pepsi on the other hand thinks it’s a new skinny can will provide as a marketing tool for people to “get the skinny” on what is trendy and in.  Who will win the battle?  

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Excerpted from AdAge, “Skinny Pepsi Can Launch is Heavy with Controversy”  by Natalie Zmuda, February 21, 2011

It’s hard to imagine that a brand the size of Diet Pepsi spent only $500,000 on measured media in the past three years combined, but that’s exactly what happened.

With the focus on programs such as Refresh Project and brands such as Pepsi Max, Diet Pepsi was pushed to the sidelines. …

“We are going to actually start talking to our consumer again. … We have our loyal followers that are a specific psychographic, and we want to make sure we talk to them on a one-to-one level.”

To that end, the brand is introducing a new package, the Skinny Can, and building a major marketing program around it, slated to run throughout 2011. The can will become part of Diet Pepsi’s permanent lineup. (Pepsi’s Skinny Can is a full 12 oz. serving. )

… Ads promote the can but also convey the idea of “getting the skinny” or the inside scoop on the latest in culture, fashion, style and design. …

A slew of partnerships and retail promotions are also a part of the effort. A promotion that gives consumers $5 off a purchase at Target when they buy a four-pack of Skinny Cans and a People magazine is launching late this month. …

To help conceive the effort, it formed a “Pop Culture Council,” …that was presented with various ideas and advertising concepts and told to “pull them apart and rebuild them.”

“They were saying you need to stop thinking as a staple product and think as we think in the fashion and design industries,” …

The effort is not without controversy. The National Eating Disorders Association put out a press release saying it “takes offense” to the idea. “Pepsi should be ashamed for declaring that skinny is to be celebrated,” …

“It’s the new shape of a product. We’re not talking about the form or shape of a woman,” she said. “And it’s also the marketing platform, getting the skinny, the inside scoop, on fashion, style and design.”

Eric Gustavsen, founding partner at creative firm Graj & Gustavsen who has no connection to the project, said … “This particular idea is simple enough and understandable enough that it may very well have mass appeal. It’s cool and different. That doesn’t mean it’s going to redefine what a soda can shape is, but there’s nothing wrong with breaking away and experimenting.”

Edit by HH

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TakeAway: Packing is not just what is on the outside of your product but rather a vehicle to convey a message.  What is that message you are trying to convey and what are you trying to do with that message?  

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Excerpted from AdAge, “What is your product saying to consumers? Rethinking the role of packaging in communications.” by James Black, January 18, 2011

Two fundamental truths about packaging are routinely overlooked by marketers. First, packaging is the only marketing vehicle that 100% of the consumers who buy your product see. Not necessarily the brand’s advertising or the exciting social media that your brand is doing. But all of the consumers who buy your brand do interact with your humble package.

… the package is really the only vehicle that you have 100% control over in-store. … and once it has a consumer’s attention, it starts conveying your message. … it is vital to get the communications right on the package. The first step is to decide what message you want packaging to convey …

A package can attract new users rather than just retain current users … can also be updated to communicate a new positioning for the brand… can close a sale with the consumer in store.

Attracting new consumers vs. retaining current ones
…who the consumer is that we are trying to engage. Is it current consumers? New users? Are we trying to transition the brand from one user group to another?

…recent launch of the “U” feminine care products by Kotex … black packages (vs. pastels of other products) draw attention from shoppers at shelf… but windows on the package reveal pastel packets inside, a cue to category norms. … brand effectively communicates by being both differentiated and relevant at the same time.

In contrast, recall Tropicana redesign hastily withdrawn from market earlier last year. …so disruptive that it was not easily recognizable to current users, … the brand lost significant volume overnight. Ultimately, brands must strike a careful balance in keeping the brand recognizable to current users while also making it disruptive to new users.

Communicating a new positioning for the brand
In 2009, Bath & Body Works re-staged its core Signature Collection line. With the update, the packaging was designed to communicate that Bath & Body Works was more sophisticated, more elegant and more premium, also supported by improved product formulations. …packaging supported new and improved in-store marketing and navigation. Here, by integrating package design, product design and in-store marketing, the brand was able to holistically communicate a new positioning.

According to the company, successful test-market sales led to a nationwide rollout and the company also witnessed improved perceptions of the brand in equity measurements.

Closing the sale
In order to close a sale, it is important to understand how the consumer will respond to simple claims vs. the need for extended education at shelf.

Here, consider how the “five” subline by Haagen Daz is brought to life. … underscoring a key brand equity point around premium-ness and pure goodness by simply listing five core ingredients prominently on the front of the package: milk, cream, sugar, eggs and whatever the natural flavor is. … advances this message without disparaging the parent brand.

Is your packaging achieving the goals you have for your product? If not, it might be time to revisit what your products are communicating from store shelves.

Edit by HH

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Excerpted from brandchannel.com, “Packaging: Lessons from Tropicana’s Fruitless Design” by Jennifer Gidman, March 16, 2009

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It’s a revamp-gone-wrong tale that has already secured its place in the annals of packaging: PepsiCo retains Arnell Group to redesign its Tropicana Pure Premium orange juice cartons as part of its new ad campaign. Said cartons make their aisle debut in January, minus the familiar straw-punctured orange and sporting a modernized depiction of—well, fresh-squeezed juice. Consumers revolt and demand the old packaging back. Two months and a reported US $35 million later, PepsiCo reverts back to the original Tropicana packaging, straw between its legs (and back on the carton).

There’s nothing unusual about a perennial product revisiting its packaging, labels or logos in an attempt to bring outdated aesthetics up to par with an enduring brand message…But if the brand is still enjoying hefty market share, why putter around with its packaging?

Tropicana has historically dominated number-two Minute Maid in the OJ category. “Sometimes [package redesign] has nothing to do with the business at all—it [comes] down to the new personnel working on the brand, hell-bent on making a mark on their career,” says Dyfed “Fred” Richards, executive creative director for global branding consultancy Interbrand, which also produces brandchannel. “It’s sometimes difficult for brand managers to demonstrate growth of a brand they’re being tasked to manage and grow. But a new package design associated with those changes demonstrates these changes.”

The agencies commissioned for a redesign may also share some of the blame for failed packaging overhauls. “Sadly, many [of these] companies enjoy the design process so much that design for design’s sake takes over, and all reason jumps out of the window for the benefit of a trend or effect they’ve wanted to try.”

With properly ascertained research and consumer feedback.. a brand can, and should, make an informed decision to redesign its packaging or logo.  “If a brand is in a leadership position, then it should be protecting and leveraging those key equities at all times in an effort to reinforce the reasons why it’s the market leader.” Richards says.

All parties involved need to carefully tread the redesign waters. “Understand the brand’s history,” Richards explains. “Talk to and listen to loyal consumers. This isn’t about sticking a pretty label on a box and hoping you win a design award. All the assets of the brand need careful evaluation to find out equity stretch points and equities that are sacrosanct to the consumer. More often than not, you’re not designing for your client, and certainly not for yourself—you’re designing for the consumer.”

Tropicana’s carton conundrum is a compelling story on a couple of fronts. First, there’s the juicy, schadenfreude-esque media obsession—the panned carton was one of the most blogged topics the week of February 23–27, behind only the machinations of President Obama’s new administration, according to the Project for Excellence in Journalism’s New Media Index.

But even more unusual has been the astonishing backlash from a usually silent, brand-loyal contingent, and PepsiCo’s eventual acquiescence to these vitamin C devotees. Feedback on the design, relayed to PepsiCo via letters, phone calls and e-mails, has ranged from deeming the cartons “ugly” to expressing outright confusion—some customers passed right by Tropicana cartons on store shelves, mistaking the new packaging for private-label offerings. “What’s evident from my experience and perspective is that key equities of the brand were thrown away for a generic offering, and consumers reacted,” Richards says.

So it’s back to the drawing board (or maybe not) for Tropicana. The old cartons are expected to reappear on store shelves this month. The only remnants of the US $35 million Arnell experiment will be the cute, orange-shaped plastic caps, which will be retained on cartons of low-calorie Trop50. The advertising campaign that’s currently in place will also continue.

Perhaps this could have all been avoided if PepsiCo had sought out real consumer input in the first place.

“When you go back and look at packaging through the ages, especially the power brands that have stood the test of time through decades of changes and consumer trends, they offer a unique insight of how to develop and manage key equities and remain relevant to the consumer of today and tomorrow.”

Edit by NRV

Full article: http://www.brandchannel.com/start1.asp?fa_id=469

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Excerpted from brandchannel.com, “Packaging: Lessons from Tropicana’s Fruitless Design” by Jennifer Gidman, March 16, 2009

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It’s a revamp-gone-wrong tale that has already secured its place in the annals of packaging: PepsiCo retains Arnell Group to redesign its Tropicana Pure Premium orange juice cartons as part of its new ad campaign. Said cartons make their aisle debut in January, minus the familiar straw-punctured orange and sporting a modernized depiction of—well, fresh-squeezed juice. Consumers revolt and demand the old packaging back. Two months and a reported US $35 million later, PepsiCo reverts back to the original Tropicana packaging, straw between its legs (and back on the carton).

There’s nothing unusual about a perennial product revisiting its packaging, labels or logos in an attempt to bring outdated aesthetics up to par with an enduring brand message…But if the brand is still enjoying hefty market share, why putter around with its packaging?

Tropicana has historically dominated number-two Minute Maid in the OJ category. “Sometimes [package redesign] has nothing to do with the business at all—it [comes] down to the new personnel working on the brand, hell-bent on making a mark on their career,” says Dyfed “Fred” Richards, executive creative director for global branding consultancy Interbrand, which also produces brandchannel. “It’s sometimes difficult for brand managers to demonstrate growth of a brand they’re being tasked to manage and grow. But a new package design associated with those changes demonstrates these changes.”

The agencies commissioned for a redesign may also share some of the blame for failed packaging overhauls. “Sadly, many [of these] companies enjoy the design process so much that design for design’s sake takes over, and all reason jumps out of the window for the benefit of a trend or effect they’ve wanted to try.”

With properly ascertained research and consumer feedback.. a brand can, and should, make an informed decision to redesign its packaging or logo.  “If a brand is in a leadership position, then it should be protecting and leveraging those key equities at all times in an effort to reinforce the reasons why it’s the market leader.” Richards says.

All parties involved need to carefully tread the redesign waters. “Understand the brand’s history,” Richards explains. “Talk to and listen to loyal consumers. This isn’t about sticking a pretty label on a box and hoping you win a design award. All the assets of the brand need careful evaluation to find out equity stretch points and equities that are sacrosanct to the consumer. More often than not, you’re not designing for your client, and certainly not for yourself—you’re designing for the consumer.”

Tropicana’s carton conundrum is a compelling story on a couple of fronts. First, there’s the juicy, schadenfreude-esque media obsession—the panned carton was one of the most blogged topics the week of February 23–27, behind only the machinations of President Obama’s new administration, according to the Project for Excellence in Journalism’s New Media Index.

But even more unusual has been the astonishing backlash from a usually silent, brand-loyal contingent, and PepsiCo’s eventual acquiescence to these vitamin C devotees. Feedback on the design, relayed to PepsiCo via letters, phone calls and e-mails, has ranged from deeming the cartons “ugly” to expressing outright confusion—some customers passed right by Tropicana cartons on store shelves, mistaking the new packaging for private-label offerings. “What’s evident from my experience and perspective is that key equities of the brand were thrown away for a generic offering, and consumers reacted,” Richards says.

So it’s back to the drawing board (or maybe not) for Tropicana. The old cartons are expected to reappear on store shelves this month. The only remnants of the US $35 million Arnell experiment will be the cute, orange-shaped plastic caps, which will be retained on cartons of low-calorie Trop50. The advertising campaign that’s currently in place will also continue.

Perhaps this could have all been avoided if PepsiCo had sought out real consumer input in the first place.

“When you go back and look at packaging through the ages, especially the power brands that have stood the test of time through decades of changes and consumer trends, they offer a unique insight of how to develop and manage key equities and remain relevant to the consumer of today and tomorrow.”

Edit by NRV

Full article: http://www.brandchannel.com/start1.asp?fa_id=469

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Click link => The Homa Files Blog

Excerpted from Fortune, “How Sam’s Club sees the future”, October 16, 2008

Of all the things you might think you could innovate on, the milk jug might not be at the top of your list. But, it is at the top of the Sam’s Club list.

Traditional milk jugs don’t stack, and they were coming in (to Sam’s) on metal carts that were being shipped back to the dairy, cleaned, and then sent back to the stores and clubs, and recycled, which created a lot of energy drain.

Sam’s developed a new milk jug that is stackable, so Sam’s can get 400 additional jugs in a trailer,  eliminating 11,000 delivery trips to the stores.  And,  there are no carts to send back to the dairy.

Trucks are  loaded in a way that reduces bacteria, which gives additional 6 days shelf life.

So, the new package provides a better-quality product, and costs a dime to 20 cents less.

The one big challenge has been that it’s different to pour. If you tip it and put it into the glass, it works fine, but if you pick it up and pour it like the old jug, you’ll miss. Which has some people crying over spilled milk.

Full article:
http://money.cnn.com/2008/10/15/news/companies/Wal-Marts_rising_star_colvin.fortune/index.htm

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Excerpted from Ad Age “J&J’s Green-Packaging Rebirth Proves Power of Smart Design” by Teressa Iezzi, November 3, 2008 

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AIGA, “the professional association for design,” held a conference bringing together an interesting range of voices from design, branding and culture…One of the featured speakers was Chris Hacker…design officer at Johnson & Johnson…

Hacker’s…presentation took a look at the reinvention of the design process at the package-goods giant and how design has resulted in a major win for J&J’s bottom line as well as for the environment.

J&J had acknowledged over the years that while the company did a lot of things very well, product design was not one of them. That bit of reality was thrown into alarming relief one day when during a meeting with Target, Goggins was told that if J&J didn’t “get its design act together,” it would lose position in stores…

The company didn’t have in-house designers in the consumer-products group. All design decisions were made by “the left hand”…typically by the most junior marketing people…who tended to move around every 18 months or so. They worked with outside design consultants, and all projects were handled separately, without a unifying vision.

When Hacker joined, he set up a design office…The new design discipline (which includes working with outside designers) has resulted in a number of successful product rebirths and a new focus on sustainability for the company.

Among the product stories: a sales-inducing facelift for the iconic Baby Shampoo packaging, new Band-Aid packaging and a streamlined first-aid kit, and an all-out redesign of K-Y, with more intimately oriented packaging and the addition of the K-Y Yours & Mine…

Hacker described sustainability at a company J&J’s size as “a journey.” It starts with packaging-weight reduction and the use of recyclable and certified materials; biodegradability and reusability are the next step. He says, for example, when he joined the company, Band-Aid packaging was made mostly in Brazil from “unknown source” material. He moved to Forest Stewardship Council-certified paper; post-consumer recycled paper will follow. The Aveeno brand has also moved in part to post-consumer materials and will continue to do so.

Will the design and sustainability journey be slowed by the current economic conditions? “Recession is exactly the reason we need to be doing what we’re doing,” he said. “It’s cutting through the chaos of everything that’s going on.”

Edit by SAC  

Full article:
http://adage.com/columns/article?article_id=132145

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Excerpted from Ad Age “McDonald’s Gives Packaging a Flashy Update” by Emily Bryson Yor, October 29, 2008

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The real cost would have to take into account that McDonald’s is “probably changing suppliers, printers, who they’re using for sourcing for their packaging,” he said. “One thing companies don’t like to do is switch suppliers. They try to get designers to design within the capabilities they already have so they don’t want to give anything on those margins.”

Ms. Dillon described the graphic-heavy look as an investment. “It will increase the perceptions about the quality of our food,” she said.

Edit by SAC  

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The packaging change appears to be a part of a larger effort that McDonald’s has undergone to connect its food with high-quality ingredients. As part of these efforts McDonald’s has hired “Moms’ Quality Correspondents”.  These are real life moms that are given high-level access to McDonald’s facilities.  The moms keep journals of their experiences and the questions they ask of McDonald’s and then communicate with other mom’s online. 

McDonald’s also has put up billboards emphasizing product quality and devoted a separate website (http://cep.mcdonalds.com/qualityfood/index.jsp) for consumers to go inside a McDonald’s kitchen and meet McDonald’s suppliers.  After getting sucked into the website and watching both an Egg McMuffin and Big Mac being made I am no more likely to eat at McDonalds, but was left with a better understanding of how these products are made.

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Full article:
http://adage.com/article?article_id=132111

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Excerpt from the New York Times “Ate a Whole Pint? Check Again” September 13, 2008

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REMEMBER the supersize phenomenon, when fast-food restaurants offered huge portions of soda and fries?

Some packaged foods that have shrunk in size include a jar of Skippy peanut butter, from 16.3 ounces down to 15 ounces, and a bag of Doritos chips, from 13 ounces to 12.5 ounces. The reverse is now happening in America’s supermarkets and big-box retailers. In industry lingo, it’s called short-sizing.

Aiming to offset increased ingredient and transportation costs, some of the nation’s food manufacturers are reducing the size of packages…Some companies possibly cut back on the quantity of product in a package in the hope that consumers wouldn’t notice or care. Judging by rants on various blogs, though, many consumers have noticed, and they do care.

Others have acknowledged that they have downsized products, but that has not stopped consumers from venting outrage…

Ice cream once was sold in half-gallon containers, but many companies shifted several years ago to 1.75 quarts. Now, with milk and egg prices soaring, many ice cream makers are selling 1.5-quart containers — without lowering the price…

Cereal boxes are becoming smaller, too, including those for Cheerios from General Mills and Apple Jacks and Froot Loops from Kellogg’s.

Frito-Lay has cut the size of Doritos, while jars of Hellmann’s mayonnaise and Skippy peanut butter have also shrunk recently…package sizes have also been reduced for…Hershey’s Special Dark chocolate bar, Iams cat food, Tropicana orange juice, Dial soap and Nabisco Chips Ahoy cookies…

Edit by SAC

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Full article:
http://www.nytimes.com/2008/09/14/business/14feed.html?_r=1&scp=1&sq=%22Ate%20a%20Whole%20Pint?%22&st=cse&oref=slogin

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Excerpted from Beverage World “Isn’t That Special?” September 9, 2008 

It may seem like science fiction, but in the not-too-distant future, a beverage bottle might do more than just sit there when you pass it in the grocery aisle.

Several companies around the world are working on this kind of technology right now…breakthrough technology will replace stagnant images and text on a beverage label with digital ones that can be made to flow across the product, presenting information about ingredients, special promotions, or whatever the marketer desires…some pretty impressive technologies are already widely available.

One is called Liquid Lens. It can be used with glass or plastic bottles to make it seem as if an object is floating some 18 inches around the bottle, or inside the bottle…another technology called GWrap can display 3D images and animation on a beverage package. GWrap uses a thin film that contains a series of micro lens arrays that when printed to, or placed over, an interlaced graphic image, displays the eye-catching images…

Another company…Vacumet, is putting the finishing touches on holographic technology that will make it seem as if images are projecting out from the plane of the curvature of, say, a beer bottle…

Among the beverage marketers themselves, Coors stands out as one that has not been afraid to spruce up its packaging portfolio with special effects. Among these has been the Cold Activated Bottle, introduced in 2007. The packaging changes color when the beer is cold enough to drink. Coors says it resulted in a 7 point trend change for the brand…

Edit by SAC

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Another big trend in packaging is sustainability.  Many companies are re-working their packaging to use recycled materials and reduce overall waste.  In doing so companies are finding that not only are they able to appeal to consumer preference for “green” products, but also save money.  This year Coca-Cola introduced re-designed its bottle tops that are 24 percent lighter and reduce Coke’s plastic consumption by 4 million pounds a year.

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Full article:
http://www.beverageworld.com/content/view/35243/

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