Packaging has been a key to the evolution of modern fast-moving consumer goods retailing that in turn has spurred on packaging developments to meet its requirements. The most significant development for the food packaging supply industries has been the emergence of large retail groups. These groups exert enormous influence and control over what is produced, how products are presented and how they are distributed to stores. The large retailers handle a major share of the packaged grocery market and exert considerable influence on food manufacturers and associated packaging suppliers. It is, therefore, important for packaging suppliers to be fully aware of market demand and respond quickly to changes. In addition, the concentration of buyer power at the retail
level means that manufacturers may have to modify their distribution and packaging operations in response to structural changes in retailing.
Packaging for fast-moving consumer goods (f.m.c.g.) has been referred to as part of the food retail marketing mix and thus closely affects all the other marketing variables i.e. product, price, promotion, shelf life, health and place.
The discussion on packaging in the multiple food retail environment may be considered in terms of its role in brand competition and retail logistics.
The role of packaging in brand competition. Packaging plays a vital role in food marketing representing a significant key to a brand’s success or mere survival in a highly competitive marketplace. Packaging innovation and design
are in the front line of competition between the brands of both major retailers and product manufacturers, having been driven in recent years by dramatic retail growth, intense industry competition and an increasingly demanding and sophisticated consumer. On an individual product/brand basis, success is dependent on the product manufacturer’s rapid innovative response to major trends. One of the most effective ways to respond is through distinctive packaging, and this has become one key factor in the success of a brand. The retailers’ own brand products compete intensely with manufacturers’ brands in virtually every product category. Brand differentiation can be enhanced by innovative packaging designs that confer aesthetic and/or functional attributes. Table 1.16 lists factors influencing retail trade acceptability of packaging.
Packaging plays an important supporting role in projecting the image of the retailer to gain competitive advantage. The general purpose of the image of retailers’ own brands is to support the overall message such as high quality,
healthy eating, freshness, environmentally aware or value for money. For example, retailers who are keen to be seen as environmentally aware in part drive the growing niche market for biodegradable and compostable packaging.
They are using it as a point of communication with their customers.