Originally Published September 1998
Private-Label Packaging: To Copy or To Create, That Is the Question
by Greg Erickson, Contributing Editor
Generic pharmaceutical and nutritional products are gaining wide consumer acceptance, but to increase demand, should private labelers emulate competitors or develop their own look?
Cheap. Basic. Copycats. Those were a few of the unflattering terms that were applied to private-label generic pharmaceutical and nutritional packages in the past. But today's private-label packaging is becoming more graphically advanced, more aggressive, and more exciting than those mundane, often black-and-white boxes that once sat on store shelves next to flashy brand-name products.
Rather than mimicking national brands, many of the folding cartons supplied to private-label marketers by Gavin Manufacturing have their own unique look.
Some generic products, however, are still packaged to look like their competitors. Suppliers say that private labelers often copy the designs of leading brand-name products in order to attract buyers. But consumers have already accepted the use of such productsaccording to the Private Label Manufacturers Association (PLMA), store brands currently account for one of every five items sold each day in the United States. PLMA also cites a recent Gallup study that found that 83% of polled consumers purchase private-label products regularly. Since consumers are already buying these generic products, it's now up to private labelers to develop their own distinctive packaging. Packaging suppliers encourage private labelers to do so by upgrading their product lines with colorful and creative package designs and by differentiating their packaging from that of competing brand-name products.
COMPETING WITH COLOR AND CREATIVITY
Brian Gavin, vice president of sales for folding-carton manufacturer Gavin Manufacturing Corp. (Ronkonkoma, NY), says, "Years ago, private-label packages had a very basic look. Now we are seeing folding cartons running in six to seven colors. The art designs are much better." But such an upgrade does come at a price. "These, of course, are more expensive to produce than 'generic-looking' packages. A lot of private-label packages these days tend to be graphically advanced, because retailers are trying to create a name and an identity for their brands. Packaging companies therefore need to upgrade their equipment to find ways to increase manufacturing efficiency and keep costs down."
Vincent Kover, vice president of sales for Innovative Folding Carton Co. (South Plainfield, NJ), has seen a similar trend. "Private-label manufacturers have made serious efforts to mirror the brand names both in terms of quality of products and enhanced packaging," Kover says. "Today you will hardly find private-label packaging showing only one or two colors. Rather, private-label packaging uses more colors, embossing, and detail graphics, as well as vignettes and gradations."
But cartons aren't the only means of dressing up generic pharmaceuticals and nutritionals. Some of the private-label customers of Alpha Plastics Inc. (St. Louis) are trading in their nondescript white bottles for its line of deeply colored polyethylene terephthalate bottles. Says president Dave Spence: "In the past, private label took on a cheap image. But things are changing. Retailers know that consumers want better-looking packaging, [so] they are moving away from copycat packages and now are trying to create a particular image for the store brand."
Spence believes that women are more appreciative of upgraded private-label packaging than men. "I hear this from store managers," he says. "Women point to the products with the sexier lookmore of a cosmetics lookbecause it speaks to them of quality."
Spence says he is surprised when private labelers "underestimate a consumer's ability to recognize what's cheap-looking." Dressing their products with packaging could make a big difference in their sales, he says.
Generic drug makers may also give their packagers and labelers a bit more design freedom than do brand-name drug companies. Says Tony Kapsaskis, director of marketing and sales for The Challenge Printing Co. (Wallington, NJ): "The main packaging difference between brand-name and generic manufacturers is that the latter rely a great deal more on us to implement look changes by using our creative design team. Brand-name producers usually have their ideas already crystallized and present us with exactly what they want in the form of finished artwork."
But not all private labelers seek to create packaging distinctive from their name-brand competitors. Many continue to engage in copycat packaging. Tim Wayman, executive vice president at Beck Carton (Milwaukee), a manufacturer of paperboard folding cartons, explains: "We do some work for folks that really do want to mirror the national brands. In some cases our customers' packages do look like copycats." Wayman says he seldom gets a chance to exert influence. "We have a graphics department and can help with design, but we don't develop anything from scratch for retailers because our customer is the contract packager. We don't get to [work with] the actual chains, and it's the chains that develop the marketing approaches and decide whether to come up with their own identity."
Label-printer Pharmalabel (Greensboro, NC) has also worked with a few private-label customers who specifically asked for labels that mimic the national-brand leaders in color or design. "We try to talk them out of it," says Des Laffan, general manager, "but they aren't always ready to change. They know that consumers can be fooled into thinking they are buying the national brand when they are not."
Most private labelers do design their own label, Laffan says. "They don't mind that it doesn't look like any major brand because they want to be different. Private-label marketers are getting more aggressive with their designs. They've heard of competitors who came out with a knockout design and grabbed market share."
For some private-label companies, that kind of knockout design is leading away from bottles and into blisters. Joe Bell, director of operations for the contract packaging division of Comar Inc. (Buena, NJ), says, "In terms of technical advances, private-label brands are looking for the same things that the national brands are looking for, and the bulk of the advances are in blister packaging. The big impulse seems to be to find new ways to put things in blistersnew formats, new aesthetics, new materials, new child-resistant devices."
BEATING THE CLOCK
Developing a unique package design can be time consuming. Howard Thau, president of contract packager Sonic Packaging (Hillsdale, NJ), says that's what prevents some private-label companies from going back to the drawing board. "Timing is everything," he says. "They'd spend the money on improved packaging but they don't want a 12-week lead time. For them, speed to market is everything. The generics have to match everything that the national brands are doing, and they have to do it fast."
In the race to put their store-brand products on the store shelves, packagers may be tempted to copy a competing brand's box or bottle or even save money and time by creating a bland package printed with nothing more than the store's name and the contents. But private labelers should think twice. With store brands accounting for $42 billion in retail sales, according to PLMA, private labelers have a chance to build on that growth with a little color and creativity.