Private Label Packaging Playing an Essential Role in Retailer Brand Strategies

Manufacturers and retailers are partnering to create innovative ideas that have a big impact.

By Kate Bertrand Connolly, Packaging Editor

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Retailers continue to refine their private label strategies, with packaging playing an essential role. The latest package designs put the "brand" in store brands, with smart looks that convey differentiated quality. And in some cases, the packaging also offers environmental benefits.

Changes in the retail environment, supply chain and consumer preferences have paved the way for today's private label designs. "From a packaging standpoint, consolidation on the manufacturing side, coupled with consolidation on the retail side, has given an opportunity to innovate more and be more strategic," says Todd Maute, partner at branding firm CBX, New York.

Rather than mimicking the packaging of national brand owners, "Retailers [are] partnering with manufacturers to innovate and create unique and differentiated items and trying to be first to market versus second or third," Maute adds. That "has a significant impact on the strategic value of the package."

The Simply Balanced brand from Minneapolis-based Target Corp. illustrates the shift. This new, healthier-for-you store brand launched in June 2013 and replaces the retailer's Archer Farms Simply Balanced and Archer Farms Organic private labels. The new brand includes beverages as well as grocery items.

Target is "strategically creating brands and unique package designs based off of what the consumer's expectation is in that marketplace. I call that a 'control brand' strategy -- individual control brands that when created and designed and packaged are really there to support what they want that bull's-eye to mean in the customer's mind," Maute says, referring to the red bull's-eye logo that appears in Target's advertising and stores—but not on its private-label packaging.

Christopher Durham, president and chief strategist at My Private Brand, Omaha, Neb., notes the innovative graphics Target chose for its Simply Balanced packaging.

"It's a very clean line, it's very simple," Durham says. "The design certainly is a bit more whimsical or playful than we've seen [with] a lot of the natural and organic designs … over the last few years, [which has] nothing fun about it." He explains that most natural and organic packaging, private label and otherwise, tends to "lean on the ingredients and the seriousness of everything they're doing."

In contrast, Durham says, the Simply Balanced package design is "fun" and seems designed to "appeal to 'her,' our shopper that's … trying to take better care of her family. To me, that comes to life in that packaging. Even the photography is not so serious. If you look at how that brand is positioned, Simply Balanced, it's very straightforward and direct and makes it easier for 'her.'"

Many Simply Balanced packages also incorporate a teaser of nutritional data on the front panel or label -- "36g whole grains per serving" or "100 percent juice," for example -- to give consumers essential information without needing to turn the package over. The brevity of the data keeps the front panel from getting cluttered.

Signature store brands

Private label-driven retailer Aldi, Batavia, Ill., also launched an organic store brand recently plus specialty product lines, each with its own brand identity. "Today, retailers like Aldi are realizing the importance and impact of creating and building brands," says Richard Barkaway, creative director at Studio One Eleven, a division of Berlin Packaging, Chicago.

"A good example of this is Aldi's Asian-inspired line, called Fusia, or their all-natural Simply Nature healthy line of products. Aldi even developed a premium line called Specially Selected, which [is] an origin-inspired line of imported products," Barkaway says.

In each case, packaging graphics establish a distinctive look and feel for the brand. The Specially Selected packaging, for example, uses script in the logo, a "Passion for Food" stamp-like icon and banners of bold color on an elegant black background. Launched this April, the Specially Selected line features specialty and imported products such as gourmet salad dressing, coffee, pasta, cookies, meats and cheeses.

The marketplace reality -- and not just for Aldi -- is that "consumers have become far more sophisticated shoppers over the past decade and are no longer looking for just the convenient value brand," Barkaway says. Consequently, "retailers are no longer interested in the [me-too] strategy and are now developing believable, authentic brands that consumers resonate with."

Waste not

A brand attribute with resonance for consumers in both the U.S. and the United Kingdom is environmental consciousness. For that reason, and as a matter of corporate citizenship, more retailers are taking the environment into account as they design, or redesign, their private-label packaging.

As part of a larger environmental mission, U.K. grocery retailer Waitrose has in recent years focused on reducing the amount of packaging it uses for its private-label products. In an announcement earlier this year, the company pledged to reduce its packaging by half by 2016 (compared with 2005).

Recent changes to the packaging for three of Waitrose's private label product lines will save almost 100 tonnes of packaging annually, according to the company.

The retailer relaunched its Menu from Waitrose line of prepared meals, which includes 49 products, reducing the package's sleeve width. This change will eliminate 33 tonnes of packaging annually, which translates into a 20 percent weight reduction overall.

The redesigned Menu from Waitrose packaging uses a lacquered aluminum tray, which lets consumers cook the products in a conventional oven and serve them in the package -- no baking or serving dishes required. The tray is recyclable.

In addition, for its Good to Go private label sandwiches and snacks, Waitrose redesigned the packaging to reduce materials use. For example, it increased the size of windows on sandwich packs and switched from labeled packaging to printed bags for fruit portions. Thanks to these kinds of changes, Good to Go packaging has been reduced by 25 tonnes per year.

The third change is an extension of the flow-wrap package that Waitrose rolled out three years ago for private label minced and diced beef. The retailer now also packages lamb and pork in the pouch, eliminating the plastic trays typically used in meat packaging. By getting rid of the pork and lamb trays, Waitrose says it will reduce its meat packaging by 38 tonnes per year.

In addition to helping at the macro level by keeping trash out of landfills, Waitrose's packaging changes make life easier for consumers. They have less trash to deal with, and the flow-wrap meat packs take up less space in the refrigerator than the old meat packs did. There's also the green glow that comes from buying a package that's more environmentally responsible.

This consumer angle is essential, Barkaway says: "Designing a successful package is all about shoppability and making the user experience enjoyable for the consumer."

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