Annual Packaging Report

A Call To Arms
by Shonda Talerico Dudlicek
Does dairy packaging need to be more aggressive?
It’s been an unusual year on the packaging end of the dairy industry.   Last year, hurricanes Katrina and Rita severely impaired resin production in North America, leading some dairy processors to consider switching from plastic to paper, at least for the short term.
And then a little-known FDA edict kicked in at the start of 2006, requiring processors to prove their fluid milk packaging is “tamper evident,” although it’s still unclear exactly what that means under the new regulation.
Tom Vierhile, director of Productscan Online, points to some emerging trends in dairy packaging that borrow heavily from products sold overseas or in other industries.
But, one of the dairy industry’s most outspoken critics says packaging is more of the “same-old, same-old.”  
“It’s worse this year!” proclaims Bob Messenger, editor and publisher of The Morning Cup, an industry online newsletter, and editor of Stagnito’s Rollout, a daily online journal for product developers. “I’m going to make a bold statement and say that dairy is the least creative of all food and beverage industries.”
Messenger says the last great dairy invention was the Dean Milk Chug. “I look at all the containers and a lot look pretty, like Ben & Jerry’s and Häagen-Dazs have pretty classy package graphics. But they’re ice cream — I’ve been there, I’ve seen that.
“If I was a teacher, I’d put the dairy industry in the corner with a dunce cap on its head.”
Single-Serve Opportunities
Shaking dairy’s commodity image is a real challenge for many processors, says Paul Vilser, president of Paul Vilser & Associates, a Long Beach, Mich.-based design house. “Innovation — that’s the real problem with dairy. They make a commodity rather than branding,” says Vilser, who designs packaging and graphics for a number of processors.  
“Everyone in dairy likes to maintain the status quo,” Vilser says. “But look at the branding of water. I know I always look for Aquafina, whether it’s any different or not.”
He points to Kemps single-serve bottles, with their printed images and attractive labels that make them stand out in the dairy case; Oberweis’ glass bottles, which are synonymous with the regional brand; Wells’ Blue Bunny ice cream containers, with their new Fresh Lock Seal; and even to the orange juice segment. “The orange juice case was full of the same until Simply Orange came about. That’s what jumps out at you on the shelf,” Vilser says of the carafe-style bottle. “That’s what’s needed with milk packages. By branding, you’re using a unique package. With gallon milk, it seems like everyone’s the same. When people buy milk, they don’t care what they’re buying. Single-serve milk has a real opportunity.”
Dairy products could use new packaging or material, Vilser says, but the dairy sector can learn from other industries that are doing an excellent job — it’s all in the marketing ideas.
For example, soft-drink bottlers often use promotional labels or a secondary label with a secret code for downloading songs or a coupon. “These have had great success on soda and could work the same for dairy,” Vilser says.  
Further, promotions could drive traffic to a dairy processor’s Web site with games for kids. “And once kids are on the Web site, you could educate them on milk and dairy products,” Vilser says.
Another place to look for marketing lessons is the beer industry, Vilser says. “Beer bottlers are doing cool and innovative things to make their products icy and chilled, making cold-wrap bottle labels,” he says. “It’s a texture printed on the underside of the label so when you put your hand around it, your hand’s warmth is insulated from the bottle. This is available only in bars. Another is an innovative cooler box that folds open and you dump ice into it.”
The cold-wrap label bottle uses a special substrate that’s “like a woven print,” Vilser explains. “When the label is applied it creates air pockets. Whether it’s really cold or not, it feels colder.”
The Next Generation
Many dairy leaders acknowledge the future rests in the hands of kids, that the industry must start winning them over early as lifelong milk drinkers. As such, Vilser proposes a single-serve milk container with a molded cup top, like a toddler’s sippy cup.
“Dairy can have opportunities, especially when it comes to kids,” he says. “Now that schools are banning soda, if dairy processors can come up with cool packaging, kids will be more likely to pick milk.” And many processors have come a long way in moving their school milk offerings from stodgy to stylish.
Meanwhile, aseptic packaging — traditionally shunned by Americans for beverages traditionally served cold — may have real inroads with kids. “As new grandparents hanging around our grandsons, that’s all they drink are juices in aseptic packaging,” Vilser says. “We balk at aseptic packaging, but among Europeans it’s big. Kids are familiar with aseptic juice boxes. We’re used to bottles, but kids are drinking juice out of packs like Capri Sun.”
Vilser recounts a Heinz marketing director talking about the company’s famous introduction of green, blue and purple ketchup. “Adults may say ‘yuck’ to colored ketchup. But kids have a clean slate,” he says. “Kids don’t know what color ketchup is supposed to be. Kids don’t have a paradigm to what milk should be.”
Messenger disagrees: “Consumers don’t like it. It’s not going to work for kids because it’s going to take more than that to get kids to drink milk.
“The aseptic shape is just a box and it’s not fun for kids,” he continues. “Why not shape it like a baseball, with a top hinge? Why not have interactive packaging? Maybe a 3-D or holographic — when you turn it, it moves.”
For ice cream, Messenger suggests a bowl-shaped container to mimic the home eating experiences. “And what about yogurt? I dare you to find something innovative in yogurt,” he says.
Messenger argues that the dairy industry doesn’t put a premium on packaging, which is a selling point. “It’s like buying a car. If you saw this rusty old car but you were told it had the best engine in the world, but the doors are hanging off and it was hot pink and had torn upholstery, would you buy it? I kind of think that way about dairy,” he says.
“Some companies do nice graphics, but they’ve got to get into shapes, sizes. There are definite needs. And ‘fun-ability.’ Why not tubed ice cream? Soft serve in a tube. Now that’s ‘fun-ability.’ I’m just mystified as to why nothing is going on.
“I really sound like a downer, but get off your [rear end] and innovate!”
Shonda Talerico Dudlicek is a freelance journalist and a former managing editor of Dairy Field.

FDA ENFORCES TAMPER EVIDENCE
Starting in January, the Food and Drug Administration (FDA) began enforcing tamper-evident packaging for plastic fluid-milk containers.
Language added to the Pasteurized Milk Ordinance (PMO) at the beginning of this century quietly began to take effect in 2006, requiring fluid-milk producers to use closures that can’t be removed without detaching the seal.
Since the FDA announced back in August that enforcement would begin in 2006, there have been more questions than definitive answers. The FDA is already debiting dairy plants during inspection if a dairy processor’s cap doesn’t have a tamper-evident seal. If a plant loses enough points, a dairy processor might lose the opportunity to ship Grade A products over state lines. The regulations are for fluid milk only.
“It’s been under the surface, with nothing official,” says Michelle Matto, regulatory affairs manager at the International Dairy Foods Association (IDFA). “It leaves it wide open for how testing would be done.”
The FDA hasn’t yet established protocol to test whether a container or closure is tamper evident, so Washington, D.C.-based IDFA has been working with the FDA to develop one.
“It will look at how closures, the neck finish and the bottle itself will perform,” Matto says. “It’s not like one type of cap will be outlawed, which is a rumor that’s going around the industry.”
As for the ordinance’s current status, the FDA drew up a draft for IDFA, which then made comments and forwarded them to the National Conference of Interstate Milk Shippers (NCIMS), which oversees the PMO. NCIMS then made comments to the FDA, and Matto says she hopes the organization will issue a statement later this summer.
“It’s still moving slowly through the process, as it always does. Hopefully we’ll have something fairly soon,” Matto says, adding that some testing is occurring, although it’s not widespread.
DESPITE HURRICANES, RESIN RECOVERING
Hurricane season is upon us again, and many industries still haven’t fully recovered from the destruction of Katrina and Rita.
Hurricane damage to petroleum-centered industries in the Gulf Coast region drove up the price of gasoline and natural gas, and the world’s two largest resin plants are based near New Orleans.
Since last fall, a significant number of resin manufacturers and suppliers indicated that recent hurricanes had a major effect on their capabilities to make or deliver polyethylene or polypropylene resins; polyethylene is needed to manufacture plastic milk jugs. Several plastics suppliers notified customers they’d be activating their force majeure — “acts of God” — contract clauses and told them to anticipate shortages, according to the International Dairy Foods Association (IDFA).
The underlying problems are many and complex. Among the issues are shortages of natural gas, ethylene, hydrogen and lack of power. Transportation issues in the Gulf Coast region continued to be widespread, and the availability of rail cars for inbound and outbound shipments were severely curtailed.
IDFA worked closely with the U.S. Department of Agriculture (USDA), the Department of Commerce and the Department of Homeland Security to implement solutions to the plastics shortage. At IDFA’s request, USDA asked for the dairy industry to take priority for existing supplies of high-density polyethelene (HDPE) resin. Discussions with the Canadian government and other entities regarding foreign sources of industrial gases and HDPE were unsuccessful.
Even though Hurricane Rita did not directly strike Houston, where many production facilities are located, resin manufacturers and supplier companies shut down plants there to minimize damage and allow for reduced staffing, due to employee evacuations.
Notices of short supplies of resins used for blow-molded milk jugs have been issued by suppliers, threatening cutbacks in milk processing, according to several companies. IDFA reported a significant number of its members faced HDPE allocation cuts amounting to as much as 30 percent. IDFA asked the plastics industry for prioritization of milk over other non-perishable food products, and has asked the government to assist in sourcing foreign sources of resin.
But the North American polyethylene resin market is now making a comeback after a year marked by natural disasters and record-high resin prices. Resin supply is much better balanced with demand today than it was for much of 2005, according to Nick Vafiadis, director of polyethylene, North America, at Chemical Markets Associates Inc.
“Last year, resin producers overproduced during the first quarter, cut production in the second quarter, lost production to hurricanes in the third quarter and replenished depleted inventories during the fourth quarter,” Vafiadis told Flexible Packaging magazine in March.
Resin prices also appear to be adjusting to the post-hurricane environment as the enormous price gap that developed between North America and virtually every other region of the world is diminishing. North American polyethylene resin demand increased in January, meaning that the market is regaining some semblance of order.  
TOP 10 PACKAGING TRENDS
Tom Vierhile, director of Productscan Online, Naples, N.Y., discusses new products as good examples of packaging trends in the dairy industry.
“There’s a trend toward freshness, and a trend toward these in drink products,” Vierhile says.
Dairy products could learn from new developments in other industries, he suggests. For instance, dairy could borrow from the hair-care category, which launched Brylcreem Shots with six hair gel “eggs” in a blister pack as an example of individual portion packaging. “It looked kind of nifty and could easily work in dairy,” he says.
Another example for dairy is the “Fresh Can” technology, geared toward the health, wellness and sports-drink markets. Sensitive substances such as vitamins, probiotic additives or trace elements — nutritious ingredients that cannot be preserved in a liquid solution — can be stored in a can in a dry state and remain unmixed with the beverage until the can is opened.
“Along with the freshness trend, someone like Borden could put the pouch of seasoning ingredients inside a shredded cheese pouch, keeping it separate until the consumer is ready to add it,” Vierhile says. “Or if you have a product with a lot of inclusions or flavor impact. It’s the same idea as Fresh Can. You can let your mind wander to all the possibilities.”
Vierhile comments on Datamonitor’s top 10 packaging trends:
1. Built-in Cheese Graters: “We saw this first in Europe but it has quickly moved to the U.S.A. and now includes launches like Kraft Grate-It-Fresh Natural Parmesan Cheese.  This is all part of the trend toward fresher food products as well as the trend toward individualizing portion and package sizes. The consumer is in the driver’s seat with this one and can decide just how much fresh parmesan cheese to add to their dishes. It’s the home application of the popular ‘Would you like cheese on that?’ restaurant experience you might get at a restaurant like Olive Garden.”
 2. Butter in Different Package Configurations: “Shedd’s Spread Country Crock Spreadable Butter showcases butter in a resealable tub, a popular package for margarine and spreads and one which could work well for butter. Meanwhile, Land O’Lakes is out with Half Sticks that are well suited for recipes as well as smaller households. We’re bullish on the trend toward downsized packaging for smaller households as there are more singles out there living on their own as young Americans delay marriage and also more empty nesters.”
 3. Packages that Add Freshness: “Emmi Lacto Tab Q10 is not available yet in the U.S.A., but the trend here is worth watching. The coenzyme Q10 is contained in a blister inside the lid of the bottle and doesn’t mix with the milk serum until the product is consumed. We think that this type of packaging development could have broad implications in dairy and a lot of other food markets.”
 4. Resealable Pouches: “Lifeway’s Probugs product is an illustration of the resealable pouch, a very popular packaging concept in Asia, but something which is relatively novel here in the U.S.A. Wells’ Blue Bunny Dubble Bubble Tear Jerkers Slushee is a similar idea.” 
 5. Shot-Type Packages: “These packages are ideally suited for ‘daily dose’ products like probiotic yogurt. Dannon DanActive is a great example and there are a lot of products like this in Asia and Europe, fewer in the U.S.A. Still, it is a packaging development to watch.”
 6. Versatile Containers with Multiple Serving Options: “The Lanz Yogurt Yo Yogurt Drink isn’t new in the U.S.A., but the ability to consume this product like a drink by twisting off the top cap or like a yogurt by removing the peel-off foil lid on the bottom is the type of packaging versatility that could appeal here.”
 7. Individual Portion Packaging: “Burgo de Arias Burguitos is sold in Europe, but is the type of package that could find a home in the U.S.A. It consists of 24 cheese units presented in a perforated tray.”
 8. Snack-Size Ice Cream in Tubs: “Dreyer’s Dibs is a good example of this, and Good Humor-Breyers Ice Cream has another one with Breyers Ice Cream Poppers. The packaging isn’t exactly memorable for this one, but it seems to be more common for ice cream snacks.”
 9. Ice Cream in Resealable Plastic Tubs: “Nestle Country Creamery Ice Cream was first with these plastic resealable tubs which keep ice cream more fresh and less prone to suffering from freezer burn. Wells’ Blue Bunny has followed suit with its entry. Similar ideas are on tap with Angelys Glaces Sorbets from France and the ice cream in a tin is a unique idea from SheerBliss. The old paperboard carton isn’t very inspiring and we’re seeing a lot of activity in alternate package forms in the ice cream category.”
10. Snack-Size Packaging: Cabot of Vermont is copying what we are seeing a lot in candies these days: individually packaged portions — usually sold around holidays like Halloween — that are now sold as year-round offerings. These are great for lunch boxes and bags which seems to be the idea with this one.”
WINNING PACKAGE DESIGNS
Packaging-design winners of the 2006 Achieving Excellence Awards, sponsored by Dairy Field and the International Dairy Foods Association, reinforced the themes of heritage, home, freshness and indulgence.
This year’s best overall package design winner was Shamrock Farms, which demonstrated a hometown advantage through its heritage-inspired illustrations.
The Phoenix-based processor wanted rich illustrations to help its new premium ice cream stand out from national brands. So Shamrock celebrated its standing as Arizona’s hometown dairy by decorating the new ice cream line with key destinations, themes and attractions unique to the Grand Canyon State, reflecting the product positioning: “Inspired by Arizona. Loved by Everyone.”
Each of Shamrock’s 56-ounce cartons portrays a unique destination. Remaining true to Arizona’s Western heritage, packaging features earth-tone, illustration-style postcards reminiscent of the Old West. Postcards depict the theme or place the ice cream is named after — Grand Butter Pecanyon, Rocky Route 66, Tombstone Roundup, Caramelback Mountain and Snowbowl Vanilla. Roxie, the company’s “spokescow,” is featured on the primary display panel wearing apparel appropriate to the flavor theme. Side packaging features a postcard from Roxie detailing her statewide travels.
The launch was so successful that Shamrock Farms redesigned its pint line to match and introduced two new flavors, MonuMint Chip Valley and Sabino Canyon Neapolitan.
Other winners:
• Garelick Farms, Lynn, Mass., won best package design for fluid milk with its Over the Moon milk, with traditional whole and 2 percent milk background colors and appetizing graphics to illustrate fresh, pure milk.
• Sorrento Lactalis Inc., Buffalo, N.Y., won best package design for cheese with its consumer-friendly 8-ounce fresh mozzarella ball that’s vacuum-sealed to lock in freshness and maintain shelf life.
• Wells’ Dairy, Le Mars, Iowa, won best package design for cultured dairy products for establishing and defining a brand essence for its Blue Bunny brand of products. Consumer research found the essence to be “Uncontained Delight,” and design of the IncreDiples cup was to incorporate the essence into the new line of lowfat yogurt-based snack dips.  
WINNING PACKAGE REDESIGNS
For some dairy processors, a packaging redesign is an optimal way to reintroduce a product in the marketplace.
Winners of the package redesign category of the IDFA Achieving Excellence Awards took a successful design a step further, introduced private label as a brand, updated an outdated package and shed the commodity image.
This year’s best overall package redesign winner was Shamrock Farms (also winner of the package design category), which redesigned its single-serve mmmmilk line after seven years of success, a taller silhouette and ergonomic design.
Shamrock’s new packaging features a distinctively shaped silhouette and vertical milk splash that visually elongates the 12-ounce bottle. The ergonomically enhanced bottle has a shape that’s easier to grip and hold. New graphics continue to feature the silver metallic, and additional metallic colors were added for mmmmilkshake flavors.
Spokescow Roxie playfully interacts with the milk splash on package, whether she’s snorkeling through caramel on Dulce de Leche or promoting fitness on whole milk. A new cap and foil inner seal provide a tamper-evident feature as well as a freshness barrier. Two primary display panels allow for better visibility. The new package is also driving vending sales.  
“Since the launch of the new package we have seen tremendous acceptance from both consumer and trade and continue to see increases in sales and distribution,” says Shamrock spokesperson Sandy Kelly. “Consumers are always telling us that they love the colorful graphics, use of Roxie and the fact that the bottle is easier to hold.”
Other winners:
• Alto Dairy Cooperative, Waupun, Wis., won best package redesign for cheese with a product redesign to move its private label naturally aged cheddar nationwide under the premium Black Creek brand.
• Schoep’s Ice Cream Co., Madison, Wis., won best package redesign for ice cream by updating its superpremium Gilles brand line of frozen custard. Schoep’s emphasized nationally known inclusions such as Moose Tracks and regional flavors typically seen at custard stands.
• Land O’Lakes, Arden Hills, Minn., won best package redesign for combined dairy after redesigning its family of products to distance itself from a commodity position and leveraging the “maiden in the grass” corporate logo.