Winter edition 2001
Issue 1 Table of Contents:

• Selling More Milk
• A Closer Look
• Consumers Dip into their Pockets
• Store-brand Water gets a Makeover
• Metallic Appeal is the Up-and-Coming Trend

• Clearly an Upscale, Premium Look
• Stretch Sleeves Pay for Themselves
• The Pasture Gets Greener for Kemp's Cow
• Even Old Favorites Need a New Look
• A Look Around the World

Smith Dairy Products effectively markets its milk through packaging. When the company first introduced the SuperJug™ it used billboard space on the stretch-sleeve label, as well as a neckring, to inform consumers about the benefits of the yellow container.

Selling More Milk
Marketing Milk: It's all in the Package

Some time between the two world wars, fluid milk's life changed forever. Returnable glass bottles gave way to disposable paperboard cartons. Home refrigeration created a demand for larger cartons, which consumers could buy fewer times per week at the supermarket rather than have daily doorstep deliveries.

One thing, though, did remain constant during that time: Milk was viewed as a wholesome food, an absolute staple, something everyone in the family consumed everyday, sometimes at every meal. The package was truly just a means of distribution and storage. It did not matter if it was "just white stuff," because its competition for share of stomach was virtually non-existent on the home front.

Milk has come a long way. Today it competes in both the multi- and single-serve businesses with soft drinks, juice beverages, iced teas and bottled waters; beverage categories that embrace the idea of aggressive marketing through pack- age innovation. Creative container shapes and sizes, married with colorful graphics, improve shelf impact as well as build brand equity.

"Beverages other than milk use the package as a medium to market the product it contains. The package almost serves as a badge of honor, i.e. 'Look at my blue can, I'm a Pepsi drinker,' " says Stanley Kostman, pres. and COO, Beverage Marketing Corp., New York.

Unfortunately, sometimes the greatest illustration on a milk container is either the Nutrition Facts box or UPC code. Unlike the metallic red Coke can, the majority of milk bottles just are not considered cool.

"The milk industry has done a great thing with its 'got milk?^®' and milk mustache print and TV campaigns. But there's little connection to the product at the point of purchase," says Kostman.

While advertising intends to make milk look cool, packaging does not carry that message. Indeed, change is necessary in how milk is packaged.

Change is not a one-shot deal
It's impossible to discuss modifying fluid milk packaging without crediting Franklin Park, Ill.-based Dean Foods, an early leader in the single-serve milk business.

Once Chugs™ proved its potential to sell more milk, the rest of the country wanted a piece of the action. However, single-serve bottles are not the only answer, nor the right answer, if they are not properly marketed . . . and that means viewing the package, or at least its label, as a dynamic tool that's regularly rede- signed to keep consumers interested.

Smith Dairy Products, Orrville, Ohio, does this very well. Through the use of sleeve labels--shrink on its bottles and stretch on its jugs--Smith connects with consumers. At Christmas the company offered a line of collectible bottles featuring either Mr. or Mrs. Claus, one of two different toy soldiers and one of three different elves.

When Smith introduced its yellow SuperJug™ this past year, the company used the billboard space on a stretch-sleeve label to educate consumers about the benefits of the yellow container. Right before Christmas, the company modified the label to contain a coupon for other Smith products including dips and sour cream. Later this year, plans are to sell the billboard space to other companies.

Managing packaging innovation
The process of designing a new package is a cross-functional team approach, involving manufacturing and marketing functions within a company. Though it takes a considerable amount of time and money to redesign a package, with no guarantee of a return on investment, there are many companies that made the commitment, and in the end, the newly designed package built brand awareness, improved shelf presence and ultimately, increased sales.

For example, Cincinnati-based Procter & Gamble used a package redesign to reposition its Sunny Delight beverage. This opened up distribution channels, and increased sales, explains Kostman.

Sunny Delight started out as a low-end replacement for orange juice. It was sold exclusively in grocery stores in family-sized high-density polyethylene bottles. By expanding into 8- and 20-oz single-serve polyethylene terephthalate (PET) bottles, as well as multi-serving 2-liter bottles, P&G was now able to sell Sunny Delight through other distribution channels including c-stores and vending.

The company also used this opportunity to add new varieties of Sunny Delight including value-added, vitamin-fortified drinks.

"Through package and formula customization, ready-to-drink beverage marketers are both stimulating and capturing category growth," Kostman says.

A more recent example comes from Clearly Canadian Beverage Corp., Vancouver, British Columbia. About a year ago, the company changed from its original tear-shaped, blue-tinted glass bottle with clear pressure-sensitive label to a more sleek bottle that uses shrink-sleeve packaging.

"In today's beverage marketplace, packaging, value and positioning are competitive pressures that established brands such as Clearly Canadian increasingly face," says Douglas Mason, pres. and CEO. "To maintain and grow the business, we must continue to innovate. This competitive reality underlies our bold decision to dramatically redesign the look of Clearly Canadian. The new proprietary bottle extols a more premium image and gives the brand a contemporary, stand-out presence on store shelves."

Indeed, redesigning a package should only take place if a company recognizes its value as a marketing tool. This includes acknowledging that continuous innovation and package updates are imperative.

Let's talk labels
There are many variables with a package that can be modified in a redesign. These include material, size, contour, cap and label. Subsequent supplements will expand on some of these topics. Here, labeling options are addressed.

Historically, glue-applied or pressure-sensitive labels are used on milk jugs, and on single-serve bottles it's a wrap-around label. These labels provide dairy processors with a low-cost means to relay necessary product information, i.e., nutritional data, ingredients and product de-scriptors, to consumers. This type of label does little to help market milk.

However, there's always an ex-ception to the rule. Just take a look at Marigold Foods' newly designed pressure-sensitive label on its gallon jugs (link to article).

Spinning labels are a dual-ply system with a fixed inner information paper that’s revealed through one or two windows on a revolving outer film label.

And to the left is a new concept in glue-applied, wrap-around labels. Called a spinning or rotating label, its main feature is a fixed inner information label that is revealed through a window on a revolving outer label.

This type of label provides up to 75% more space for brand information, nutritional education, multiple languages, larger type for older consumers, special promotions and even occasion marketing.

Glue-applied or pressure sensitive labels are, unfortunately, not very environmentally friendly be- cause of the undesirable paper fibers and/or adhesives they introduce into the recycling stream.

Comparing label options
Stretch and shrink sleeves are what's new in beverage labeling, and they're hot.

Dean Foods was the first to introduce shrink sleeves on milk when Chugs entered the marketplace. Dean's was also the first to use a stretch sleeve on jugs.

How do stretch and shrink sleeves differ? What types of packages can they be applied to?

Besides both types of sleeves providing a 360° billboard to effectively market milk, neither uses environmentally unfriendly adhesive, as does the only other 360° billboard label option: wrap-around.

In the single-serve category, because stretch uses less material, it is a more cost-effective means to provide this billboard. However, if full-body coverage is desired, the shrink sleeve is the label of choice.

This type of sleeve label goes over the container before filling and capping, or after. If after, a perforated tamper-evident extension of the sleeve can be incorporated for minimal cost. Once the sleeve is in place, a quick trip through a heat tunnel causes the sleeve to shrink and fit over the bottle's contours.

Recently, advancements in adhesive technology are enabling wrap-around labels to be used as a full- body shrink, similar to a sleeve. In the past, wrap-around shrink labeling has been plagued by what the industry refers to as creeping of the seam. This is caused by the typical thermoplastic adhesive's inability to withstand heat stresses incurred during exposure in heat tunnels.

A new adhesive is based on a UV curing system, which differs from traditional hot-melt adhesives be-cause of its higher heat stress resistance.

For dairies currently not applying a full-body sleeve, but using the more common wrap-around label on its single-serve line, this UV-curing technology is easily retrofitted to wrap-around equipment. Minimal investment is required for the UV chamber, which secures the seam, and a heat tunnel to obtain shrink.

Regardless, full-body shrink label coverage on single-serve bottles provides a greater, more powerful billboard for attracting consumers. Full-body shrink labels can also be used on fully contoured, uniquely shaped packages, which are in demand by consumers looking for ergonomically improved containers.

The more traditional, lower cost wrap-around label can only cover a certain amount of space on a container. The same is true for the stretch sleeve. Because neither has much shrink, they have limited application on bottles with contour.

"Such contoured containers will grow in demand as the population continues to age," explains Lynn Dornblaser, editorial director, North America, for Chicago-based Global New Products Database. "As Baby Boomers get older, and as the incidence of osteoporosis grows, older consumers want to drink more milk, but find current packaging difficult to handle. Ergonomically designed bottles are inevitable."

When it comes to gallon, half-gallon or quart jugs, shrink sleeves are not really an option. Stretch sleeves are the best way to achieve the 360° billboard graphics.

To use stretch sleeves, dairies must make a small investment in new blow-molding components that create an indentation, or recessed panel, in the jug, which helps prevent label bruising. Sometimes handles also require reconfiguring.

As the name implies, this one-piece sleeve label is opened and stretched onto the container using special stretch-sleeve equipment. The slightly elastic label, which does not use a heat tunnel (like shrink sleeves) or environmentally unfriendly adhesive (like wrap-around or pressure-sensitive labels), is easily removed for recycling of the jug.

Because the film used for stretch is less expensive than any of the film choices for shrink, which is discussed next, stretch sleeves present the most economical, environmentally friendly 360° billboard for half-gallon or larger fluid milk jugs.

Wrap-around labels are the least expensive 360° label for round quart or smaller bottles. However, the glue used with such labels often causes the production line to jam. Downtime must be considered by purchasing when looking at total label costs.

Understanding shrink-sleeve film
If full-body coverage and contours are your thing, it's important to know what shrink sleeve film options are available.

The two most common types of film used for shrink sleeves are polyethylene terephthalate glycol (PETG) and polyvinyl chloride (PVC). They vary in an array of factors including price, degree of shrink and environmental friendliness.

PVC is the most common shrink-sleeve film among all consumer goods, not just in the food industry. This is because PVC is the least expensive and is also extremely durable. Unfortunately, it is also the least environmentally friendly because of its chemical composition.

PETG is more expensive; however, it seems to be the shrink label that most milk processors are using. Being oil-based, PETG is considered to be environmentally friendly.

When selecting a film, it is important to work closely with the designer to make sure that degree of shrink is accounted for. This is an important factor to consider when developing graphics because it is necessary to design the label to be distorted for bottle contour.

Other film options include building in a window so that consumers can see the beverage, as well as UV protection.

To conclude, "The shift from bulking milk and selling it as a commodity to designing packages that capture consumers' interest is here to stay," Kostman says. "Know your options, do it right, and do it right again and again."

Even though most people would like to believe that image does not influence a consumer's decision to visit a particular retailer or purchase a certain item, image is very important. In fact, in today's information-overloaded society, where consumers can know almost everything about anything, final decisions often come down to image. Indeed, image is everything.

A statistic frequently cited by grocers is that 70% of all purchase decisions are made in the store, when consumers are looking at the product. The right container shape and size, along with appropriate, eye-catching graphics, can grab consumers' attention for a trial purchase. When the graphics accurately represent the product inside, and/or add value that's not obtainable from similar products, consumers will repeat the purchase. This is how packaging helps sell.

Kids love characters. This could make Looney Tunes milk more attractive than a can of cola.

What can a milk marketer do to sell more milk? If you are trying to target kids, how about putting characters on the label and giving it a cool name. Bravo! Foods Inc., a wholly owned subsidiary of China Premium Food Corp., North Palm Beach, Fla., has a licensing agreement with Warner Bros. Consumer Products to market Looney Tunes™ characters and names on branded milk products. This agreement is further contracted with Quality Chekd Dairies Inc. making this licensing agreement exclusively available to its member dairies.

In September, Turner Dairy, Covington, Tenn., was the first Quality Chekd member to introduce the Looney Tunes flavored milks. A month later, Sinton Dairy Foods Co., Colorado Springs, Colo., joined them. By 2001, the Looney Tunes milk brand is expected to be available throughout the States. This alliance will enable the development of a unique national milk brand, which, with proper support, will help sell more milk.

There are still many characters available for licensing, and some that are just waiting to become famous. In addition to characters, there are also sports teams and athletic associations with which licensing agreements can be made. The opportunities are endless.

And don't forget about the actual container. Coke and Pepsi use aluminum, glass and plastic to package beverages, with shapes and contours changing often enough to keep consumers interested. Just because dairy processors have put milk into a single-serve plastic bottle doesn't mean the marketing stops there.

When it comes to bottle shape and design, anything is possible. Take for example this Teddy Bear bottle used in Europe to package fruit punch for kids.

Innovative bottle shapes help meet consumers' functional, as well as emotional needs. For example, Dairy Marketing Alliance LLC, Arden Hills, Minn., the joint venture between Land O'Lakes Inc. and Dean Foods, Franklin Park, Ill., put a great deal of research behind its ergonomically crafted Grip 'n Go™ bottle. It is designed to fit comfortably into the smallest and largest of hands.

Recently the company added two flavors to its original white and flavored lines. New York City-based The Coleman Group is responsible for designing the Grip 'n Go labels and came up with the names. Grippaccino capitalizes on continued consumer interest in coffee flavors, while Chocolate Shake has a unique, rich and thick mouthfeel that segments the large chocolate milk category.

To market your milk more effectively, take a closer look at what other beverage segments are doing.