Discover your next big idea at PACK EXPO Las Vegas this September
Experience a breakthrough in packaging & processing and transform your business with solutions from 2,300 suppliers spanning all industries.
REGISTER NOW & SAVE

Source innovative packagers to stay ahead of maturing private label

How can national brands leverage contract packaging to add value to their consumer products?

Pw 7262 Chartprivatelable

Judging from the summary findings in a new management report, they may want to emphasize product and packaging innovation—or risk losing market share to cutting-edge private-label brands.

The report is from management consultancy In summarizing the report, Kari Alldredge, principal at McKinsey, offered two suggestions to national brand owners

1. Be continually innovative in both products and packaging. Private-label dollar share is likely to be low in categories where national brands, marketing strategies, and the pace of innovation are high.

2. Look at the "big picture" by reviewing the economics behind your brand. Are you creating value for the consumer that pushes the perception of your product beyond commodity status?

Contract packagers may be able to help deliver results in both areas. They are a catalyst behind the surge of many front-running private-label brands. Package development is outside of most retailers’ core competency, so they turn to contract packagers to produce their brands. Some co-packers tell Safeway and other retailers with leading-edge private-label programs report higher levels of store-brand growth (5.3%) as a group than all other retailers (3.4%) during the past three years.

The 22% of total sales that private label represents for the top tier of retailers compares with 15.6% for the bulk of the other retailers and 10% for those offering mostly national brands. If the lower tiers adopt an aggressive approach to private label, U.S. store-brand share could reach 24% in 10 years—at the expense of national brands, Alldredge says.

McKinsey & Co. (www.mckinsey.com) and is titled "Competing in the New World of Brands: The Next Wave of Private Label." (To download the report, visit www.gmaonline.org/publications/index.cfm, which is listed under the 2007 Publications section.) Its central conclusion is that as much as $55 billion in annual product sales could hang in the balance over the next 10 years if U.S. retailers on the whole follow the lead of a small but growing top tier of retail chains. These front-runners—including Safeway, Wegmans, and Kroger—leverage private-label products as a sophisticated value-added tactic to make their stores a destination.Contract Packaging magazine that store-brand packaging is a surging part of their business. As a result, they are developing an intimate familiarity with what works and why in stores today.[CP]
Videos from Universal Labeling Systems, Inc.
Conveying Innovations Report
Editors report on distinguishing characteristics that define each new product and collected video demonstrating the equipment or materials as displayed at the show. This topical report, winnowed from nearly 300 PACK EXPO collective booth visits, represents a categorized, organized account of individual items that were selected based on whether they were deemed to be both new, and truly innovative, based on decades of combined editorial experience in experiencing and evaluating PACK EXPO products.
Take me there
Conveying Innovations Report
Annual Outlook Report: Workforce
Hiring remains a major challenge in packaging, with 78% struggling to fill unskilled roles and 84% lacking experienced workers. As automation grows, companies must rethink hiring and training. Download the full report for key insights.
Download Now
Annual Outlook Report: Workforce