Grocery Aisle Innovation Key to Retailer and Consumer Cost Savings

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February 14, 2012

By Suley Muratoglu

In the past, innovation in the grocery aisle was not usually driven by private label brands, yet in recent years they have outpaced nationally advertised brands in several categories by upping their packaging savvy. Retailers have modernized their products, reduced costs and expanded their sustainability efforts. Could this signal the dawning of a new era in grocery aisle innovation?

In today’s economy, retailers are looking for ways to grow and many have turned to their private label products and changed strategies, making them more desirable to consumers. It is no longer only about price. It’s about responding to consumer demand. Private label retailers are implementing key solutions that are making them more competitive in the marketplace, including redesigning the aisle, appealing to environmentally friendly consumers and capitalizing on market trends in which packaging plays a big role.

Redesign the Aisle (Literally)
Retailers make the most profit based on how quickly they move product off the shelves. Leveraging the power of space and product imagery is a core component to store brands differentiation. Because products are tightly packed and always face the consumer, packages that create eye-catching shelf impact can help revitalize a brand image and create a unique product concept. To select the right package, retailers would do well to examine options that are both visually enticing, while also adding to the overall efficiency of the shelf space and display area.

Packaging companies need to be aware and quick to respond to the markets demands. Traditionally, goods like vegetables, beans, tomatoes and soups are filled in cans and glass jars, but with savvy structural packaging redesign retailers can reduce on-shelf space by 20 to 30 percent using geometric shapes that ensure the products fit snugly together. Additionally, new packaging options can enable cost savings with smaller shapes, package weight and secondary packaging — in store and throughout distribution.

Environmental Appeal
In this economic environment, companies are looking for ways to grab the interest of environmentally conscious consumers and many succeed by embracing sustainable packaging solutions. As consumers expand their knowledge on issues pertaining to sustainability, there is a growing sense of responsibility when it comes to their purchases.

Recent data from Tetra Pak’s “Environmental Research 2011” survey shows 88 percent of consumers in 10 countries expressed a preference or strong preference for products in recyclable packaging. In the United States alone, 70 percent of the survey’s respondents said they are willing to buy “green” products if the quality were the same as “non-green” alternatives.

For packaging, being recyclable is the price of entry. Companies that consider everything from sourcing materials to what happens after they are used -- and everything in between -- will differentiate themselves from the competition.

Capitalize on Market Trends
Today, nearly 60 percent of households in the United States are comprised of one or two individuals and more and more we are seeing convenience, size, ease of storage and disposal drive consumers toward the need for greater efficiency in their day-to-day lives.

The rise of non-nuclear families -- such as couples without children, single parents and empty nesters -- also has implications for packaging sizes. As consumers continue to lead busy lives away from home, both in their professional and leisure time, smaller portions have become an important new sector of growth in the beverage industry, particularly in the juice aisle.

As consumer preferences change and shoppers make smarter and savvier purchasing decisions, it is critical now more than ever for retailers and private labels to find innovative ways to appeal to the ever-changing consumer.

Suley Muratoglu is vice president, marketing and product management for Tetra Pak Inc., a leading food processing and packaging solutions company, where he is responsible for the expansion of the company’s presence within core categories, including dairy, beverage and food. Muratoglu joined Tetra Pak in 1994 as a sales manager and his career with the company has taken him to Asia, the U.K. and later to the United States, 

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