Farm Fresh's packaging strategy for its premium ice cream packs hinges on using a value-added package to justify a higher retail price. This strategy is also used for its extra-premium Alaskan Classics line of ice cream, also launched in June. The Alaskan Classics line is positioned to be slightly more upscale, priced at $4.59 to $4.89 for a 1/2-gal container, versus $4.29 to $4.59 for the grocery cooperative's Farm Fresh brand. The Alaskan Classics is a line of custom flavors licensed from Denali Flavors, Hillsdale, MI, a marketing and ingredient company. Licensees such as Farm Fresh produce, package and market the ice cream with Denali's package graphics. What's interesting is that Denali requires its licensees to strictly adhere to its formulations and package graphics, but it leaves the choice of the package to its licensees. This strategy allows Denali and its licensees to take advantage of new package formats like Farm Fresh's discovery of the in-mold-labeled Sqround® from Cardinal Packaging. "We'd love to see a lot of [licensees] get into it because it's the kind of package that will help us carry the kind of retail prices we need to carry," says Wally Blume, Denali co-founder. "Our product line is expensive to run. If you have a dime or fifteen cents more in a package," he adds, "you ought to be able to put another twenty, thirty or forty cents on the retail price." Although the line is initially available in Farm Fresh's five-state marketing area of AR, KS, MO, TX and OK, the coop hopes to extend distribution of the Alaskan Classics package to other states, as well.
Packaging positions ice cream for upscale sales (sidebar)
Positioning for high retail pricing