Retailers Push the Cart in the Food Packaging Industry


A typical consumer knows the type of product he needs as he heads down the aisle in a big, chain supermarket. He knows, for example, that he needs butter, but hasn’t yet decided what brand to buy. The odds are pretty good that the butter package that grabs his attention - the one that he picks up and looks at more closely - will be the one that ends up in his cart.
A major key to a product’s success is getting customers to grab it off the shelf. In fact, once a consumer picks up a product from a store shelf, there’s an 87 percent chance that he or she will buy it. Using this truism as a springboard, it’s relatively easy to see where the packaging industry is headed – and who’s doing the driving. Packaging that is more appealing, more functional, and easier to stack on store shelves has become vital to the two groups of people most interested in selling the products: retailers and wholesalers.
It is becoming apparent that, more than ever, retailers and wholesalers are providing the catalyst for change in the food packaging industry. Years ago, the mom-and-pop outfits that dominated the retail landscape put whatever was given to them on their shelves. However, large retailers – the Wal-Marts, Albertsons and Kroger’s of the world – are now dictating what products will be placed on their shelves, as well as what those products will look like. What’s more, if you as a manufacturer want to sell your product to them, you’ll need to provide them with exactly what they want.
  The wholesaler also plays a significant role in the packaging evolution. In fact, the wholesaler must not only respond to the stipulations set forth by the retailer, but must also convey to the packaging vendor its own unique requirements related to packaging color, shape and function.  

Facing facts

If the appearance of a product is so crucial to its eventual selection by the consumer, then the “billboard effect” - a marketing method primarily propagated by the wholesale food industry - is crucial to product appearance. Picture how a label wraps around a package in the cold storage section. With round containers, only 12-15 percent of the container is facing the shopper. With a square container, there is a far greater percentage of customer-facing product, creating a billboard effect that allows the shopper to view about 75 percent more of the package. What’s more, the smaller the container, the more dramatic – and critical – the billboard effect becomes. This effect is optimized through the use of improved graphics, picture quality, printing and unusual-sized containers.
Greatly augmenting the billboard effect is the use of In-Mold Labeling (IML), one of the fastest-growing decorative processes for plastic packaging, offering visibility and graphics that far surpass other methods. In fact, for the last 25 years, IML has been a popular labeling solution in Europe, with 85 to 95 percent of all food packaging utilizing it. The technology has begun to make significant headway in the United States, particularly in the home repair and food industries.
With IML, a printed polypropylene label is placed in an open mold and held in the desired position by vacuum ports, electrostatic attraction and other means. The mold closes and molten plastic resin is injected into the mold where it envelops the label and makes that label an integral part of the container.  

If the shelf fits

In the food arena, maximizing retail shelf space is paramount. If you go into the dairy section, for instance, you’ll see hundreds of products in a variety of container shapes: small round tubs of butter, cylindrical containers of yogurt and square blocks of cheese. Since there is limited space available, the retail industry is demanding that product packaging allow for better utilization of shelf space. More and more we are seeing square and rectangular containers that help accomplish this objective. Space saving containers not only allow retailers to save space on the shelf, but also help increase sales by reducing out-of-stock items and reducing operation costs by cutting down on labor that is associated with refurbishing the product.

Less resin

The environmental factor should not be overlooked in this discussion. “Packaging firms are constantly looking for ways to create containers that are strong but use fewer resins, as this will provide a more environmentally friendly package. Using polypropylene (PP) containers is one way that we have met this challenge,” said Serge Metivier, Director of IPL Inc., a leading North American producer of molded plastic products. The company offers a complete line of polypropylene containers that are not only green, but also exhibit immense top-load strength. “The entire package can be recycled, as our labels are also made of PP. This is opposed to containers decorated with a glued-on paper label, or labels made of polystyrene (PS).”
In general, plastics also use fewer raw materials, consume less energy and deliver more products per unit of packaging than alternative packaging systems. In times of rising oil prices, this provides manufacturers with a way to conserve valuable resources, therefore increasing savings. Studies have also shown that using plastics over other packaging materials reduces greenhouse gas (GHG) emissions by approximately 42.9 million tons of CO2per year. These facts and benefits have worked to make plastic a material of choice among both packaging producers and consumers.    

Join the club

The growing number of wholesale clubs has also had an interesting impact on the food industry. The oversized, large-quantity items that are the staple of these stores were once targeted almost exclusively to commercial establishments such as hotels and restaurants. Virtually no one was concerned about the appearance of the packaging. However, with these items now available to the everyday shopper, the same issues that applied in a supermarket apply here as well. A customer buying a two-gallon container of mayonnaise still must be visually “courted” the same way as someone buying a 12-ounce container.    

Anticipating demand

Packaging companies have necessarily become more reactive to the demands of both retailers and wholesalers. But the packaging companies that will be truly successful are those that are proactive about anticipating retailers’ and wholesalers’ needs. Those companies that can produce innovative packages and can sell them to high-profile product manufacturers will have a leg up on the competition, as their package will gain valuable shelf space and, subsequently, valuable advertising.