Hello everyone. I'm Mike Richmond and I'm here to provide some new thoughts, insights and commentary on dairy product packaging through Dairy Foods' new column, Packaging Points. For this first installment we'll look at the broader picture of dairy packaging before focusing in a bit on cultured products. But first, here are seven critical elements that should be considered when evaluating or refreshing packaging for any kind of dairy foods.
1. Consumers buy products not packages, but packaging is critical to the sale & experience.
2. The package is the product and the package is the product delivery system.
3. Taste and convenience are the most important consumer trends and purchase drivers.
4. Consumers shop for value more than price (less than 1/3 are "Economizers" who focus on cost, according to a 2002 FMI study).
5. Marketing is moving from media driven to consumer driven and marketers are incorporating "packaging" into early strategic thinking.
6. Dairy is "good food" but much of the packaging is dated.
7. Retailers recognize the importance of packaging and want dairy products with better packaging.
Most of these critical elements can be integrated in a variety of ways to provide new and better packaging that will result in higher margin and growing sales.
A good example is Go-Gurt. This product, which generates more than $100 million in sales annually, is all about the packaging. The stick package is easy to use/consume without utensils and can be disposed of easily. And the paperboard carton provides a good billboard in the dairy case.
Products like Go-Gurt and Danimals are good examples of how the package is the product and the package is the product delivery system. When you start to think about packaging differently you just might come up with some great new solutions.
Look at what Dean Foods did for single serve milk a few years ago. The Chug helped reduce decline in the category through packaging. Imagine what refreshing packaging could do for some of the other cultured categories like cottage cheeses and sour cream. What if someone added shrink sleeves for 360 degree branding or a metallized carton for enhanced product appeal? Sure the cost would go up but so would the value. Value = Benefits/Price vs. Competition.
Shelf appeal and tasteTaste and convenience are the top two consumer trends for foods and beverages. The consumer's initial taste/flavor perceptions are influenced by packaging, and his or her perceptions are transferred to the eating occasion. Packaging cues, including package texture, gloss, shape, graphics, colors and font can trigger flavor, freshness and taste cues. Tactile and sensory packaging components could provide some new excitement to the category.
Convenience is delivering growth across categories. Examples include salty snacks in so-called "go packages" and Campbell's Soup at Hand. This can be done with cultured and other dairy products too. When considering consumer fragments and niches, remember that designs that are easy to read, open and close intuitively and are easy to shop for will appeal to the masses.
Paper materials can offer a better environmental profile, and printing or shrink sleeves alone can really improve the look of cultured product packages.
Dairy needs to continue to move from the price side of the equation to the value side of the equation. Consumers are willing to pay for taste and convenience.
Cultured products and other dairy foods can benefit from a deeper understanding of the value that packaging can provide. There are plenty of growth opportunities out there for those in the dairy business, but it's easy to fall asleep at the wheel. I hope this column serves as a wake up call. Thanks for allowing me to offer some new thoughts on the importance of packaging. I invite any calls, questions and challenges, in the hopes that together we can "kick up packaging" a notch or two and grow that margin and profit.