Best Face Forward

July 1, 2004
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Best Face Forward

by Lynn Petrak
The ‘before-and-after’ craze hits dairy packaging, as new formats and looks continue to emerge across all categories.
With so many television shows and glossy magazines devoted to extreme makeovers for the body, wardrobe and home, the notion that appearances count is truer than ever.
Looks may not be everything, but they sure come close, even in the various dairy sections of the supermarket, as manufacturers combine high-tech materials with outstanding, look-at-me graphics to overhaul their products or make a lasting impression with new ones.
The changes are evident across the dairy sector, from fluid milk to cheese, ice cream, yogurt, cultured products and even some powdered dairy-based items. Formats are breaking out of the mold — literally — with new vessels like squeeze bottles for sour cream, lidded tubs for butter and specialty sizes of all kinds of product. The past commodity-style look of dairy products has, it seems, gone the way of the horse-drawn milk wagon.
Several factors have converged to spur such interest. For one, as dairy product lines expand, so do the types of packaging formats. Also, increasing pressure for operational efficiency has led processors to take a new look at packaging capability, in terms of output, speed and distribution. The move toward consolidation within the industry has also allowed, in some cases, for larger budgets with which to invest in packaging upgrades.
Perhaps the greatest impetus is the marketplace itself. Dairy products compete with one another and other similar foods and beverages vying for the all-important dollar share of the consumer, who often makes snap decisions at the point of sale. “That is what is pushing the dairy side hard — it is a competitive requirement,” says Tom Nagle, vice president of marketing for the Washington, D.C.-based International Dairy Foods Association (IDFA). “There’s a group who are clearly using packaging to differentiate their products and brands from the competition. What processors are beginning to look at now is how to be competitive in a more complex way.”
Bob Messenger, a food industry consultant and publisher of The Morning Cup, a daily online food-trends newsletter, agrees what is going on in the dairy industry mirrors other food and beverage segments.
“I understand that dairy is driven by commodity issues and it is expensive to compete, with both content and packaging. But compete they must, first, because milk really is a good-for-you food, and always has been, and that message needs to be constantly driven home. And two, Americans today cannot be trusted to hang on to things traditional,” says Messenger. “Look at Nabisco and the numerous ways they’ve tweaked and tinkered with the Oreo, creating all sorts of flavors and variations. Oreo is probably our national cookie, but Nabisco knows the Oreo — indeed, the entire cookie category — could just as easily be swallowed up by health and nutrition concerns prevalent in this country today.”
The dairy industry, Messenger adds, could benefit by applying more “Oreo thinking” to its business.
To gain that competitive edge, or just to maintain a successful presence in the category, dairy processors are addressing what consumers want, whether it is a bottle designed for immediate consumption or an ice cream carton that fits nicely in the freezer. “Certainly today, convenience and portability are dominant factors behind package design,” says Mary Kay O’Connor, director of education for the International Dairy-Deli-Bakery Association (IDDBA), Madison, Wis., which publishes an annual report, What’s In Store, on marketplace trends. “More working women, longer working hours, smaller households and higher disposable incomes all require food choices that are fast, nutritious, no-brainer foods.”
According to O’Connor, a close look at the supermarket dairy case also reveals that package types are increasingly as fragmented as the marketplace. “Another factor that is driving packaging innovation is what Euromonitor International defines as ‘identity consumerism’ or market segmenting products for very specific niche audiences,” she explains. “With aging and ethnic populations growing and manufacturers looking for products that can address specific consumer needs like lactose intolerance, or low carb or obesity issues, product functionality both in terms of the component product and its package is a strong, but specialized consumer trend. Niche specificity will be the name of the game in the dairy case product assortment of the future.”
Many dairy manufacturers are heeding these trends, including both large companies and regional processors or cooperatives. “Certainly the industry’s bigger companies have innovative programs but the milk industry is a little like the convenience industry in that regard — there are big companies in the middle that are big enough to make investments and small enough to have the flexibility to be innovative leaders,” says Nagle. “It’s some of those guys in the middle that need to stand out from the big guys.”
Still, while investments and changes are being made at a greater pace and by more dairies, there is room — a lot of room, according to some experts — for further innovation. Two industry observers, for their part, cite the revolutionary Dean’s Milk Chugs® from Dallas-based Dean Foods, rolled out several years ago, that spawned so many other singles-serve plastic bottles.
“It was like the Chug was born, and then a flood of copycats and nothing since. Where is the innovation that continues to intrigue consumers with convenience options?” Messenger wonders.
Stan Kostman, president of New York City-based Beverage Marketing Corp., agrees. “Plastic single serve was revolutionary and then stagnated for a while. I don’t think there have been any major packaging innovations since single serve in plastic,” he says.
One reason for the slower pace of investments in packaging, at least compared to other food and beverage segments, could be the fact that processors are squeezed by so many demands for resources. “My guess is that packaging doesn’t rank in the top three of investments, which is probably shelf-life extension, line improvement and productivity on the operational side,” says Kostman. “At least from public company data, dairy industry capital spending as part of revenues is much lower than bottlers and other large beverage companies. In general and on average, dairy capital spending is three percent of revenue, while with other beverage companies it runs 5, 6, 7 percent. They have higher margins to spend on these types of things.”
Milking It
To further explore investments and opportunities for fluid milk, IDFA recently tapped Beverage Marketing Corp. to conduct a packaging study for milk and other competing beverages. To be published in late July, the research found several key factors influence a beverage manufacturer’s decision to innovate through packaging, including consumer opportunity, brand equity, brand performance, marketing strategy, distribution capabilities, retail/customers, profitability and production costs and feasibility. The study also noted many dairy processors have heeded — and in some cases helped — shape a paradigm shift for dairy packaging, moving from competing only with other milk brands to competing in the multi-beverage business and ultimately to standing out among the multiple beverage competitive set.
According to Nagle, IDFA’s Milk Processor Education Program (MilkPEP) arm pursued the study to better gauge how milk packaging has changed and where it may be headed. “Our board wanted to understand the competitive context they live in for competitive beverage packaging, to find out where milk packaging strengths and weaknesses lie,” he says.
While the dairy industry in general has significantly improved its packaging in recent years, the study concluded the large commodity milk business has been relatively slow to catch on to the key relationship of brand equity and brand building through the use of value-added packaging.
A quick review of new package introductions within the milk category underscores the notion that change has been positive but gradual, including the single-serve category that has been such a hot area of packaging activity over the past few years. “What has been going on is evolutionary upgrading. In the beginning, they (manufacturers) slapped anything in plastic, but now they are packaging things with consumer appeal,” says Kostman.
Nagle, too, emphasizes the importance of going beyond a “fill-a-bottle-and-they-will-buy-it” philosophy. “Consumers don’t automatically feel great because there is plastic in their hand,” he says. “They respond positively to products that appeal to them on a lot of levels. It is a question of using new packaging materials, whether plastic or paper.”
As more marketing-savvy dairies recognize that point, the look of milk packages, whether single serve or larger sizes, is being regularly evaluated. One example is Dean Foods. Rather than resting on its laurels as the much-credited innovator of the Chug, the company took a hard look at its bottles for its branded Dean’s line and made some changes. Since March, Chugs have sported a new look, including a larger logo and brand name, along with more intense colors and graphics. “Everything we did in the past got us to where we are today and it has been fantastic, but we needed to take it up a notch,” says Pat McColgan, Dean regional vice president of sales and marketing.
The most significant change in the Chug label has been a greater brand emphasis. “We did some studies and found that the Dean name had a lot of equity in it. When we looked at the package, it looked good, but the Dean name wasn’t really big,” says McColgan. “So we thought, ‘If it has that much equity, let’s design something to make that name really stand out.”
The label change affected more than 300 SKUs produced in 15 plants in 20 states. “We had to make sure we hit a home run because it means so much to us,” says McColgan.
So far, the newly designed graphics — with a larger brand name, five-color display and graphic sunbursts on some of the flavored single-serve milks— have been well received by consumers and retailers alike, McColgan says. The company also received a large response to a special promotion tied to the bottle redesign, a sweepstakes that awarded consumers a free kitchen makeover. “We figured people would know us, but we wanted to have fun with it, to let them know we have a new look,” he says.
Other brands have made tweaks to their package designs as well. Phoenix-based Sham­rock Farms recently overhauled packaging for its half-and-half and heavy-cream lines with a soft illustration style and the company’s “spokescow,” timed with new introductions like a fat-free half and half and a line of flavored half-and-half products. “We wanted our half-and-half line to have a more upscale, gourmet feel,” says director of marketing Sandy Kelly. “We have always felt packaging is a critical element in the marketing mix, especially at the retail level. With today’s limited marketing dollars, we look to have the package provide as much impulse appeal as possible.”
Maplewood, Minn.-based Schroe­der Milk Co., which completely switched its single-serve, pint and quart milk products two years ago to high-density propylene (HDPE) white opaque plastic bottles with full shrink wrap sleeves, recently introduced a champagne-colored package for its half-gallon and gallon-sized chocolate milk. “Originally it was in a translucent container, but we wanted to switch for a number of reasons,” says Jill Schroeder, brand manager. “We waned to be cohesive with the chocolate single-serve bottles, to protect the milk from UV light and to communicate the message of a premium product.”
Also over the past year, Schroeder scored packaging points for its Hyper Cow® caffeinated flavored milk bottles, with splashy graphics on a full wrap label, which won an Achieving Excellence marketing award from IDFA.
UV protection has been a driver for several milk packaging changes in recent years, serving to give a distinctive look to a bottle and to help assure consumers of quality. Umpqua Dairy Products Co., Rose­burg, Ore., converted its products to new light-blocking opaque white HDPE plastic gallon and half-gallon jugs. Orrville, Ohio-based Smith Dairy, on the other hand, combines the appeal of light blocking yellow jugs with a shrink-sleeve band for added visual impact.
“The stretch-wrap sleeves we use on Smith’s Super Jug gallons of milk have really helped us sell the ‘Yellow Protects Milk Better‘ message,” says Bill McCabe, Smith’s vice president of marketing, adding that there is a definite return on investment. “Packaging that helps sell-in functionality creates pricing elasticity — a higher-price/high-value relationship, especially in the dairy industry where milk is viewed as a commodity product.”
In addition to graphics and UV-protective materials, there are other examples of processors pursuing new and unique types of vessels for their products, typically chosen to stand out from the crowded field of competitors and to take advantage of packaging technology to make quality improvements.
Dean’s Land O’Lakes milk brand recently switched to a new “easy-pour” bottle. The patented bottle was ergonomically designed for children and seniors as well as in-a-hurry consumers. “The handle is positioned to make it balanced, so that little hands and others have no difficulty pouring the gallon,” explains Dave Haley, regional director of marketing. The handle is also longer, lower and fashioned with a thumb pad for easy gripping. In addition to improved pourability, the bottles feature light blocking pigmentation, a change from the previous bottle.
Similarly, Shamrock Farms also recently redesigned a new easy-to-pour spout for its fluid milks.
Beyond the bottle, another new generation of milk containers is multi-layered Prisma® 11-ounce aseptic carton, first used for milk by Horizon Organic, Longmont, Colo., (now wholly owned by Dean) and developed by Tetra Pak, Vernon Hills, Ill.
While Horizon Organic recently revised the graphics on its single-serve flavored milks sold in the Prisma box, another major milk brand has embraced this packaging form. Bravo Foods International, North Palm Beach, Fla., known for its licensed use of Looney Tunes™ cartoon characters on its single-serve flavored milk bottles, now markets its single-serves in the Prisma box, most recently designed with Marvel® comics superheroes.
Milk processors also are tweaking caps and closures, from adding new screw-top caps to standard paperboard cartons to creating more sophisticated and easy to use tamper proof closures for plastic bottles.
For example, Schroeder has switched to a new cap with an inner seal, chosen for a variety of reasons. “Since converting, we have been able to eliminate product leakage during transport and storage. After we made the change, we have noticed that other industry players are moving in this direction as well,” says brand manager Schroeder.
Smith Dairy also recently upgraded its closures, opting for a new large pull tab on the foil seal beneath the cap, to allow for easier opening.
Milk industry observers say such changes are helping make the dairy case more dynamic, but note there are other opportunities for milk package creativity. Kostman points to multi-packs of single serves as an untapped area. “The fluid milk category, at least, hasn’t cracked the multi-pack, which is driving growth in most other beverage categories. That has to be an opportunity if you are a competing beverage,” he says, suggesting a higher-volume four-pack sold in a multi-pack carrier or shrink sleeve overwrap.
Echoes Messenger: “I don’t want to be the fly in the ointment, but I think the dairy industry missed an opportunity to get way beyond single serve, such as six-packs of single serves in various traditional flavors, like strawberry, chocolate or banana.”
Multi-packs of single serves may be an area with little milk penetration for now, but there is also room for improvement on the higher-volume side of the market. Nagle, for one, zeroes in on the gallon. “That has been the last package to innovate. There has been some work for improved handles and pouring spouts and light blocking has been around for a while, but that is a bit opportunity — to begin to look at those take-home products in alternative sizes,” he says.
Meanwhile, IDDBA’s O’Connor underscores the trend toward pursuing the niche markets with targeted, tailored packages. “Manufacturers are concentrating now on new product configurations and package designs for niche-specific audiences, like 60-plus women, sport milk drinks for teenage boys, lactose-free products for Hispanics,” she says. “High-end design and graphics, neon inks and ‘billboard messages’ on flexible packaging all play a major role in marketing these new market entries.”
One recent case in point that speaks to the potential of niche milk packaging is McDonald’s addition of the Milk Jug, a new single-serve plastic bottle of milk, to its menu.
“I think what you see there is McDonald’s using tools of brand marketing to make a product appeal to the customer they are designing it for. It’s designed for their little hands, and there is a beloved character right on it for kids to respond to,” says Nagle. “This is a perfect example of product, packaging, distribution and delivery, well designed for a usage occasion and specific audience.”
Other ideas for future milk packaging may not even be on the radar screen of milk marketers. As one example, Kostman cites retortable plastic packages, now used for various functional and nutritional beverages.
Messenger has a brainstorm of his own. “Just thinking out loud, maybe I’d like to see milk in pocket pouches, where you could buy it and lug it around, stick in a purse or even a pocket,” he suggests. “Or how about a half-gallon of milk in a large, squishy pouch that collapses into virtually any nook and cranny of the refrigerator, rather than the traditional fat and bulky half-gallon bottle?”
Word on the Curd
Milk may be a hub of activity for dairy packaging, but there are plenty of examples of innovative packaging materials and graphic treatment for cheese. Indeed, several cheese packages have undergone makeovers of their own over the past year, some extensions of previous changes and others breaking new ground.
“There has been innovation in total for cheese, but especially on the packaging side over the past few years. It’s been fun to watch,” says Kevin Burkum, senior vice president of retail marketing for Rosemont, Ill.-based Dairy Management Inc. (DMI), noting the move toward more colors and convenient features is similar to the shift in other areas of the store. “You are seeing a lot more packaging in the cheese case, and not just in terms of form. It’s very appetizing, with colors that attract the eye. We’ve learned a few things from yogurt over the years, a category that is attractive and colorful and stops Mom in the aisle.”
One of the fastest-growing areas of cheese packaging development has centered on snacking cheese. As this emerges as a trendy new product segment, packaging has been a crucial part of the marketing mix. “The whole snacking area continues to be very hot in the category, fueling growth. It’s still relatively small, but it’s on fire, attracting kids as well as adults,” Burkum notes, adding that snacking cheese tend to be sold in recloseable pouches, some individually wrapped, like string cheese.
O’Connor points to the surge of snacking cheese packages as another example of niche packaging. “Another category of packaging in the dairy case that is set for growth are products delivered in a ‘snack-size’ serving in a disposable package, such as cubed cheeses,” she says. “With less-structured mealtimes, consumers are eating smaller amounts of food more regularly than three meals a day.”
The demographic niche marketing in this subcategory is evident in the plethora of kid-friendly packages of snacking cheese, which essentially started with string cheese. Packages of Frigo Cheese Heads® from Saputo Cheese USA, Lincolnshire, Ill., have garnered attention among young consumers for their licensed cartoon characters on limited time packages. Plymouth, Wis.-based Sargento Foods Inc., for its part, added Justice League® characters like Superman, Batman and Wonder Woman, to some of its cheese snack packages, tying the characters into its Web site.
While many snacking cheeses are aimed at kids, some are designed for adult consumers as well. For example, Kraft Foods North America, Northfield, Ill., introduced Kraft Cracker Cuts, sold in a recloseable pouch, along with Kraft 3% Milk Cheese cubes. Reflecting the package-within-a-package trend, the company also unveiled Kraft Natural Cheese Sticks and Cracker Barrel Natural Cheese Sticks, pouches of individually wrapped natural cheese sticks.
According to Kevin Ponticelli, group vice president and president of Kraft’s U.S. Cheese and Dairy Sector, the new products and their accompanying packaging were all designed around the tried-and-true notion of consumer need. “Clearly, convenience is the key driver with consumers. Consumers are much more sophisticated about food — they need it fast, they want more flavor, they are seeking taste adventure and want to experiment,” says Ponticelli. “We constantly challenge ourselves to better understand our consumers’ changing needs and develop innovative products and packaging that meet those needs to maintain our loyal customer base.”
Snacking cheese may represent a new product area, but more traditional dairy items have received new package treatments as well. Sargento, for example, launched new bold graphics imprinted on foil for the brand’s new line of Cheese Dips products, and recently reached a license agreement with the Keebler brand, owned by cereal giant Kellogg Co., on non-refrigerated five-pack snacks, which now feature the “Ernie the Elf” character that Keebler made famous.
Meanwhile, Tillamook County Creamery Association, the Oregon-based cooperative known for its cheddar, recently made some changes, adding new verbiage and graphics. “We wanted to create a look that emphasizes our history, incorporating our original ‘Tillamook on the rind’ stamp of approval as well as a traditional, rich color palette and the cooperative description ‘farmer owned since 1909,’” says marketing director Kathy Holstad. The first products to be changed over to the new packaging were 8- and 9-ounce cheeses, followed by 1-pound cheese products and shreds.
Last fall, Saputo also updated one of its longstanding lines, converting packages of Frigo ricotta cheese into new cup molds featuring more powerful six- and nine-color graphics.
The reason for the change, says vice president of marketing Steve Josen, was as simple as market research on the importance of packaging in luring consumers. “Seventy percent of purchase decisions are made at the point of purchase,” he says.
Early indications are that the shift was a positive one. According to Josen, volume rose 4.6 percent during a time period ending in late May while the company added several points of new distribution for the Frigo ricotta line.
Yo, Look At This!
As Burkum pointed out, yogurt marketers are no strangers to packaging innovation, working to transform the yogurt case in dramatic ways in recent years, with more products, formats and colors.
The explosion of tube yogurts, multi-packs and drinkable bottled yogurts over the past few years shook up the segment in significant ways. These days, those types of products are now being refined and expanded in more sophisticated, marketing-savvy ways.
One current hotbed of activity in yogurt seems to be in size. The Dannon Co., Tarry­town, N.Y., for example, recently added a larger bottle of drinkable Danimals to its line. Danimals® XL™ bottles are designed for older children who consume more than the traditional 3.1-ounce serving in a sitting.
“We developed Danimals in order to address the needs of the ’tween market, kids 8 to 12, which did not have any drinkable yogurt option that was appropriate for them,” says spokeswoman Anna Moses. “We knew that ’tweens still loved the taste of Danimals drinkables, but it was not offered in the appropriate sizes and had an image and position which was more appropriate for younger kids.”
The Danimals XL bottle is decidedly different than its more youthful predecessor, with a black background color and a new character, the Wildcat, to appeal to older kids.
Size was also on the mind of the R&D team at Londonderry, N.H.-based Stonyfield Farm, which last year created a new 24-ounce bottle of drinkable Yo-Baby bottles. Designed to be poured into sippy cups, the larger size can be stored in the refrigerator for multiple-use occasions. The shape and visual treatment of the bottle was based on both existing Yo-Baby and Stonyfield drinkable yogurt products.
“We wanted to echo our smaller smoothie, because it was an appealing shape and was hand held. The graphics we designed to resemble our Yo-Baby cup. It is really meant to be a family of products,” says Cathleen Toomey, vice president of communications. “Our initial response from moms is that they love it because they use it in portions.”
To support the new package, Stonyfield sponsored a promotion with a free sippy cup mail-in offer.
Stonyfield has been active in other areas of yogurt packaging as well. Late last year, the company purchased a new form-fill-seal machine designed to reduce the amount of packaging. “We now have 37 percent less packaging, which is significant for us from an environmental standpoint, and it also reduces the cost,” says Toomey. “We get a much better visual impression without the overwrapped carton. The new package communicates more powerfully to the consumer and is less expensive because we don’t have to do an overwrap.” Toomey says the new machine represents the largest investment in packaging equipment the company has made.
Containing Ice Cream
Ice cream is hardly in the deep freeze when it comes to packaging overhauls. The move to smaller, non-traditional sizes continues, with some manufacturers downsizing from half gallon to 56-ounce cartons, to counteract rising ingredient costs and provide a more freezer-friendly shape.
The scround container market has also matured, with more ice cream makers like Smith Dairy, Cleveland-based Pierre’s French Ice Cream and Dean’s Athens, Tenn.-based Mayfield Dairy converting cartons to the scround design.
Following along with the niche-oriented marketplace trend, there have been advances in single-serve ice cream packages as well. Good Humor-Breyers, Green Bay, Wis., for example, introduced new Breyers® Almond Ice Cream Bars with Hershey®’s Coating and Breyers Premium Fudge Bars, stick bars sold in individual boxes with high quality graphics. Perry’s Ice Cream Co., Akron, N.Y., offers All Mine™ half-pint containers.
As co-branded product development continues in this category, albeit at a slower pace than in recent years, the trend of adding other brand names and logos to containers also remains. Smith Dairy, for example, introduced two new Ruggles® premium varieties this spring, in Tootsie Roll® and Tootsie Pop® flavors, with packages that emphasize the brand.
Some co-branded package changes are done with different types of partners on a limited basis, like the “City of Hope” pink ribbons featured on packages of select Dreyers Grand Ice Cream, added during a short-term pairing between Oakland, Calif.-based Dreyers and City of Hope to help raise $250,000 for breast cancer research.
Meanwhile, other processors have revamped their ice cream packages to make a statement visually. Wells’ Dairy Inc., Le Mars, Iowa, for example, recently redesigned packages for nearly all of its products, beginning with Blue Bunny ice cream and novelty products.
The changes, according to director of marketing communications Dave Smetter, stemmed directly from consumer research on product and package preferences. “Packaging was deemed the number-one touchpoint of our consumer,” says Smetter. “A lot of the redesign had to do with refreshing the brand.”
The facelift included a slightly changed logo and a more prominent and sophisticated use of graphics. “The focus of it was the photo styling, which was the most obvious change,” says Smetter. “We really made that the hero and tried to, in respect, to have the photo on the package look more alive, more 3-D.”
After a nearly six-month development process, the new packages have been gradually introduced over the past year, starting with “top tier’ bestsellers like ice cream novelties and half gallons.
Another example of using eye-catching, on-package photos to spur sales or reinforce brand strength is a new line of low-carbohydrate products launched by Brenham, Texas-based Blue Bell Creameries. Packages of that company’s new Crème de Carb line feature photos of actual serving sizes right on the carton as a service of sorts to dieting customers. Many ice cream makers, in fact, have concentrated R&D efforts on low-carb products, with packages that tout net carb levels.
As with other dairy categories, closures and seals have received a second look in ice cream packages. Mayfield Dairy, for instance, continues to enjoy success with its Clik-Top™ carton, designed for security and quality assurance. Smith Dairy recently added a tamper-evident seal to its Ruggles ice cream packaging. “The band provides some degree of assurance that the product has not been opened,” explains marketing product manager Penny Baker.
Wrap Up
Other types of dairy packaging have also been revised or updated, from powdered dairy products to sour cream. Industry experts expect the trend toward more sophisticated, high-tech packaging to continue, especially as the dairy marketers rouse themselves from 20th century commodity mindsets to true competitors on a large scale, global basis.
“With the globalization of brands, manufacturers will be concentrating more on creating products to suit the specific needs and tastes of consumers in regions of a country or in a particular locale,” says O’Connor. “This will require very precise, engaging product design and function.”
The future profitability of the dairy industry, of course, depends on those consumers all over the world who are accustomed to having those needs met. “Clearly, the dairy industry is facing a major challenge trying to remain relevant,” Messenger says, “against the rising tide of change among a generation of Americans more demanding than the generations that preceded them.”
Lynn Petrak is a freelance journalist based in the Chicago area.

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