Demand for convenience and functionality is dictating new, exciting directions for produce packaging
With a host of considerations ranging from food safety, functionality, marketing design and marketing content to concerns about sustainability and supply chain efficiencies, it's difficult to offer the whole package when it comes to produce packaging. Regardless, the packaging industry is taking strides to address all of these issues in new and exciting ways. And in October, the Produce Marketing Association's second annual Impact Awards for packaging will recognize produce packaging companies that stand out in unique ways.
“All of these factors have great value, and the level of importance varies with time and commodity,” said Ronald McCormick, chairman of PMA's Packaging Council and vice president and divisional merchandise manager of produce and floral for Wal-Mart Stores, Bentonville, Ark.
“As an example, the function of protecting the product is most important for blackberries, but low on the importance scale for potatoes.”
Demand for produce packaging in the United States is forecast to climb more than 4% annually to $4.7 billion in 2012, according to a new study by the Freedonia Group, a Cleveland-based market research firm.
The company's “Produce Packaging” study predicts growth will outpace overall food packaging and will be fueled by increased produce production, growth in consumer spending, trends toward healthier eating and rising demand for fresh-cut produce, which tends to use more value-added packaging than bulk produce.
The study also noted that although corrugated boxes will remain the leading produce packaging product type through 2012, plastic containers will experience the fastest gains, resulting from continued increases in berry production and expanding applications for clamshells, bowls and other plastic containers in other produce uses, especially ready-to-eat, fresh-cut produce.
The Perishables Group, West Dundee, Ill., found similar trends in produce packaging.
In its perishables statistics on packaging vs. random weight for produce items, the percentage of produce sales that were UPC-coded has grown steadily in the past five years, from 41.5% in 2004 to 45.5% in 2008. The contribution of produce sales to total store sales and to sales in the overall perishables category has also grown steadily.
“UPCs have continued to grow, which shows that across all fresh food departments, packaged foods are increasing,” said Steve Lutz, executive vice president of the Perishables Group.
“That's a five-year look, but you can pretty much see that in some areas, it's greater than others. I think in produce, it's the highest at 45.5% of packaged items. In some cases, those are items that were sold bulk or random-weight simply being converted over, but I think in a lot more cases, it's the new value-added products, the new convenience items, and it's the new products that are coming into categories that are generating more dollars.”
So, rising demand for fresh-cut fruit and salads is providing opportunities for plastic containers like bowls, cups and clamshells. And consumers' increased need for convenience is driving innovation with value-added products requiring packaging.
“You only need to look at the growth of packaged salads to see the impact of packaging on our businesses,” McCormick said.
“This is now most retailers' largest category of business, bypassing bananas, apples, potatoes and other huge parts of our businesses. This growth has been driven by packaging that extends shelf life, protects freshness and retards discoloration while providing consumers great convenience. We would never have been able to drive this growth without continuously improving films and packaging technology.”
Shelley Balanko, executive vice president of ethnographic research at the Bellevue, Wash.-based Hartman Group, said she believes consumers would rather opt for no packaging, but the advantage comes when the cost in terms of time vs. labor is really in their favor.
For example, “consumers respond really well to the clamshell packaged lettuce, and that's because to wash lettuce, there's a lot of time involved, so it's worth it to them for that sort of thing,” Balanko said.
Because many growers and shippers are offering more of these value-added products — such as prewashed and trimmed lettuce leaves in plastic containers; snack packs; salad bags or containers with all of the fixings included — there is a trend away from in-store packaging, which saves retailers labor costs, according to the Freedonia Group.
Along with new offerings of value-added fresh packaged produce, innovative packaging can present new merchandising opportunities for retailers and new conveniences for consumers, such as more accessible product information.
Lutz told SN that he believes special packaging can offer unique cross-merchandising opportunities with other products.
“Socks of snacking tomatoes allow for a completely different type of merchandising,” he noted as an example.
“You can take a small mesh bag, and you can have grape tomatoes that are hung near the packaged salads, so it creates new merchandising opportunities.”
Both Kirby and Lutz said they've noticed NatureSweet's new packaging for its Cherub and D'Vines varieties of tomatoes.
“If you look in the tomato category, there's a real cool little clamshell that somebody came up with for grape tomatoes,” Lutz said of NatureSweet's packaging for its Cherub tomatoes.
“It's kind of a pyramid, if you will, but instead of having straight lines to make it a pyramid, it's shaped so that the grapes can fall into that. And, it's got a peel-off top so people can shake them out one at a time. It's a pretty innovative little package.”
Lutz also said that microwavable steamer bags of vegetables merchandised in the refrigerated section of the produce department are also doing very well. In fact, Mann's Ready Set Steam products won an Impact Award last year.
Others agreed that packaging as a vehicle of communication is effective — not only for consumers, but for the retailers as well.
Lutz said he has also noticed a number of growers and shippers that are coming out with shelf display units, or cartons that are their own unique displays.
“The carton is cut in such a way that you can pierce the edge of the carton and fold up the top so that there's information displayed on a cross-promotion, merchandising, or usage information,” Lutz explained.
“So I think some of those pieces that are sort of beyond the product itself and create merchandising from the packaging — even if it is just the shipping carton — are pretty innovative.”
Stores and produce managers also benefit from the information included on the packaging, such as country of origin, traceability, identifying specialty items and additional information such as recipes or storage tips, said Darvel Kirby, business director of produce at United Supermarkets, Lubbock, Texas.
At Wal-Mart, McCormick noted that packaging that allows labeling and storytelling signage can help increase sales and customer loyalty, and added that other types of packaging have helped the company realize new supply chain efficiencies.
"Packaging and labels are allowing a growing amount of our products to scan and drive systematic ordering and replenishment tools,” he said.
Some consumers prefer bulk produce without packaging because of freshness perceptions, according to Balanko, but there are still certain types of produce that are most efficiently handled with packaging, whether it be on the grower-shipper end, the retail end or the consumer end. Notably, clamshells still present many obvious advantages for several types of produce, such as berries.
“Clamshells are improving quality and refrigerator life for customers, and improving sales that might suffer from time shortages — berries are a great example,” McCormick said. “In addition, clamshells have helped retailers reduce shrink,” he noted, adding that utility, reliability and appearance — enhancing the product inside — are key factors in good packaging.
Balanko agreed, saying she believes this is a value-added factor, which is something consumers will invest in.
“If there's an integrity issue — say, if it's grapes or berries or something that's very fragile — consumers will make the trade-off, because it's going to preserve the integrity of the product.”
Lutz agreed, adding that he believes that lack of packaging can not only cause damaged produce, but smaller basket sizes at checkout.
“Consumers have a tendency to say one thing and then act differently,” Lutz said.
“Consumers talk about wanting to pick out their own cherries or strawberries, but the reality is, after that product sits on the display and has people sorting through it, and you end up halfway through the day with a display of mashed strawberries or mashed cherries, you're not going to sell any, and consumers aren't going to buy. They're going to be dissatisfied with the quality that's left on display — and the other thing is transaction size will go down, because people won't spend the time to pick out the equivalent of a 1-pounder or 2-pounder of strawberries.”
Still, Lutz noted, consumers are primarily concerned with product visibility and convenience when it comes to produce packaging.
“If you go back to what we hear from consumers, there are several things that always rise to the surface,” Lutz said. “One is simply the visibility of the product — in particular with produce. People want to see what's on the inside because of the perishable nature of the product, so product visibility is always high on the list.”
Kirby at United Supermarkets said he believes good packaging, in general, should ultimately give the consumer a better-quality product to take home.
“Good packaging protects the product from damage that comes from handling by the shippers, the stores and consumers,” Kirby said. “Good packaging also helps reduce any contamination of the product and can provide traceability information. The consumer takes home better quality and improved food safety.”
GREEN STILL GROWING
With sustainability continuing to be a significant consumer trend, it would seem that many environmentally concerned shoppers might be shunning packaging — particularly plastics. However, these concerns don't appear to be a driving factor for consumer purchases of packaged produce, Lutz said.
“For a majority of the consumers, it's not a deal-breaker yet,” Lutz said. “The majority of consumers, you just don't hear them say I'm going to avoid a category or I'm going to avoid a product purchase because I don't like this plastic clamshell product. Now, if you're talking about an outlet like a Whole Foods or something that's being sold as organic, then obviously the packaging is a critical part of the delivery of that product.”
Still, retailers are expressing interest in more environmentally friendly packaging.
Rochester, N.Y.-based Wegmans, for example, has been working on greener packaging in its Market Cafes and produce departments, according to a recent online column written by Mary Ellen Burris, senior vice president of consumer affairs.
“A recent step: change all the Asian Wokery Bar food containers (the little red boxes) from pure, bleached paper to those made of 100% recycled paper (35% is post consumer paper; the rest is scrap paper generated during manufacturing),” Burris wrote.
“The new boxes perform just like the ‘old’ ones; only the color now is ‘Kraft’ or brown. On the salad and food bars, we're adding a ‘green’ choice; a similar material of 100% recycled paper.”
Joe Hardiman, produce manager at PCC Natural Markets, Seattle, said he is still waiting for fully recyclable product packaging, and that non-GMO-corn-based packaging remains a gap in recent industry innovation.
Demand for biodegradable plastic in the U.S. will rise by more than 15% annually to $845 million in 2012, according to the Freedonia Group's Biodegradable Plastics report. The report also states that food and beverage packaging are the leading uses for biodegradable plastics.
“Sustainable packaging grows in importance every day as consumer awareness explodes,” McCormick said, adding that it's the consumer demand that adds importance for retailers, which will drive their demand for sustainable packaging to their suppliers. “The availability of more sustainable packaging has been growing for the last decade, but has tended to ebb and wane as the price of oil affects the cost of resin. But in the last two years we've reached a critical tipping point, where the issue now matters to consumers — the people that write all of our paychecks. Stir in the rapid development of containers that use more and more recycled content while maintaining their integrity, and the availability of different containers from renewable resources, and we can anticipate sustainable packaging remaining top-of-mind — and growth.”
PMA HONORS PACKAGING
In recognition of the growing role that innovative packaging plays in the produce industry, the Produce Marketing Association this year will honor several companies, chosen from a variety of specific categories, for its second annual PMA Impact Awards for excellence in produce packaging. Here are this year's finalists, listed by category:
ENVIRONMENT/SUSTAINABILITY: Earthcycle Packaging; FreshSense; Growers Express; Noble Juice & Blue Lake Citrus Products; Wilkinson Industries
FOOD SAFETY: Chelan Fresh Marketing; Del Monte Fresh Produce; Leger and Son; PWP Industries; The Giumarra Cos.; Yottamark
FUNCTIONALITY/TECHNOLOGY: Crunch Pak; Green Giant Fresh/The Sholl Group II; Melissa's/World Variety Produce; Stemilt Growers; To-Jo Mushrooms
MARKETING/DESIGN: Desert Glory; Imagination Farms; Micky's Minis; Stemilt Growers; The Giumarra Cos.
MARKETING MESSAGE/CONTENT: Fresherized Foods/Wholly Guacamole; Frieda's; Imagination Farms; Modern Mushroom Farms; Tanimura & Antle
SUPPLY CHAIN EFFICIENCIES: Dos Gringos; Highland Supply Corp.; IFCO Systems; Mann Packing Co.; Sambrailo Packaging