WRAPPED ATTENTION

LISA SAXTON

Image is everything when it comes to private-label packaging.

Indeed, it's become more important than ever as the supermarket industry continues to pour a stream of store-brand makeovers and introductions into the market, all with packaging playing a crucial part in their image-building efforts.

To the national brand community, meanwhile, image is important enough to sue over.

The trade infringement lawsuit filed in September by Procter & Gamble against drug store chain F&M Distributors is strong evidence that branders will be scrutinizing retail brand packaging more closely than ever, and responding aggressively to protect their market share from the flood.

Some industry observers said they can't blame P&G for making such a move to protect brand identity.

"I think P&G has every right to be concerned, from the standpoint that maybe there is a weakening of brand equity and the consumer is basically saying, 'I'm not going to pay the additional money for performance,' " said Leon Galitzin, senior vice president of strategic business development at Confab, a manufacturer of retail brand products based in Wayne, Pa.

Retailers told SN that, notwithstanding P&G's litigious moves, they are not likely to back down from the traditional strategy of copying the packaging of a leading national brand -- when it suits their objectives.

But just as important, "me-too" packaging is no longer the cutting edge. A lot of retailers are realizing that using packages to establish a distinct high-quality image can be a beautiful thing. The trend turning up more often in private-label packaging is to create a uniform identity across several categories.

Retailers and their private-label suppliers said a high-quality "family" look to packaging is a strong element in updating existing lines to enhance their image, as well as in suiting new premium lines of products.

This trend may turn out to be a wise way to circumvent the kind of branded backlash represented by P&G's suit. But retailers told SN that the threat of P&G's wrath is not what is going to motivate their packaging choices.

"I don't think the lawsuit has had any direct impact on our thinking," said Paul Bernish, director of public relations for Kroger Co., Cincinnati. "We have always understood that when designing a private-label package, you have to make sure you don't essentially reproduce or come close to reproducing a national brand package."

Norristown, Pa.-based Genuardi Super Markets is including a packaging makeover in its project to revamp and expand its private-label program. According to Frank Puleo, director of nonperishable merchandising, the chain is anything but nonplussed at P&G's muscle-flexing.

"That particular lawsuit won't have any impact on us. Obviously, [F&M] got a little too close. We certainly wouldn't plan to cheat the system; we'll follow all the rules and regulations," said Puleo. "But if there are P&G items that we want to emulate, we're definitely going to do it within our legal rights.

"We don't want to confuse and deceive the customer any more than Procter & Gamble would want us to. This is our product, not theirs. But the [lawsuit] is not going to scare us off. We still think that's the way to go."

Joe Thames, executive in charge of Tyler, Texas-based Brookshire Grocery Co.'s Hytop private-label products, said imitating national brands is simply "the most effective way to sell products."

That belief has been widely acted upon for years, with few repercussions. Retailers used to be able to get away routinely with copycatting national brands because their private-label products posed no threat, said Elinor Selame, president of BrandEquity International, Newton, Mass., a packaging design consultancy.

"P&G would say, 'Oh, [private-label products] are a fly in the ointment, and they belong to the company that sells my product. So, I'm just going to look the other way,' " Selame explained.

"Now, however, private label has become very, very important," she said. "Manufacturers aren't going to lay down and play dead. I predict there's going to be a revolution from the manufacturers.

"Manufacturers are going to start to wake up and say, 'There has to be something we can do against retailers, who control the real estate, and their store brands that are looking equally as good and, in some cases, better.' "

Still, retailers are also likely to continue to upgrade private label's packaging and positioning on the shelves, said Galitzin of Confab.

"Retailer brand products, in many instances, offer the consumer a performance level that I will say is equal to or better than [national brands] at a savings. And when that occurs, you're going to see a continued effort to build on that," said Galitzin.

Retailers have gained additional inspiration to improve their packaging from the sales and profits success of the upscale President's Choice retail brand created by Loblaw International Merchants, Toronto. The need to conform to the Nutrition Labeling and Education Act also prompted packaging redesigns.

Galitzin said they've also taken a fancy to adding "corporate brands" to their retail lexicon as a more sophisticated substitute for "private label."

" 'Private label' is not becoming a force; 'retailer brand' is becoming a force," asserted Galitzin. "People don't buy labels; they buy brands. And therein lies a very deep importance, because retailers now are truly manufacturing and marketing their brand as a brand. They've gone to the outside and hired away leading national brand managers."

One chain that has a firm grip on the "private label-as-a-brand" mentality is Winn-Dixie Stores, Jacksonville, Fla. The company abandoned the copycat approach years ago in favor of distinct packaging and brand names for its private-label products, according to Mickey Clerc, vice president and director of public relations.

For instance, soap and nonedible products fall under the Arrow label. The premium line is called Prestige, which has darker packaging, high demographics and a full-gloss label. In instances like these, the idea is to create an individual identity, rather than get as close as possible to the leading brand, Clerc said.

Harris Teeter, Charlotte, N.C., is another chain that has moved away from national brand emulation, striving instead for a unique look with new private-label packaging.

"The new packages are still rolling out," said Ed Cook, director of private labels. "We went from 'HT' to 'Harris Teeter.' We went from more of a block look to more of a designs look.

"And there's a commonality to all the packages. We've got our name in the same typeface on all the packages, and as many as possible are in the same color," Cook said. The new logo is a diamond with a product depiction and a sash that goes across it with a product description.

The only area where emulation may still occur, said Cook, is if there's a predominant package color in a given product's category.

Staff Supermarkets, Roswell, Ga., the company that supplies private-label products to Bruno's, Birmingham, Ala., Seaway Food Town, Maumee, Ohio, and Thriftway, Cincinnati, is also breaking the brand emulation mold with a new line of premium store labels.

"We are definitely going upscale," said Jerry Kempf, president of Staff Supermarkets. "We're moving in that premium private-label direction. The upscale will be a totally different category. We'll probably go with 30 or 40 items, which would include products like an upscale red raspberry preserve, cookies, soda . . . "

Staff's premium products will not emulate the national brands. Products will be given individual tags such as 'select' or 'ultimate' or 'premium.' Indeed, the store's name may only appear "in the distributor's clause," said Kempf. "But that's not going to, in any way, take away from any of our existing packaging," he added.

Retailers and other sources agreed that the use of color is one area where chains and their suppliers are likely to continue to follow the lead offered by national brand packages.

"In the evolution of retailer brands, retailers will choose to utilize the color icons that the consumer recognizes relating to specific particular categories. For example, you're not going to use hot pink for lemon furniture polish," Confab's Galitzin. "But that doesn't mean they're doing the same package."

While hot pink on a can of furniture polish may confuse consumers, shoppers are apparently becoming less and less confused about the quality-value equation of today's private-label products, thanks to better packaging.

BrandEquity's Selame said private label is now enjoying a higher-quality reputation that it may have deserved for some time. For a lot of chains, the quality was already there; it was the packaging that cheapened the perception, she said.

Staff Supermarkets' Kempf said his company is moving to a premium store brand, packaged accordingly, because of "basically the success of others and the demand from the consumer for that product. Quality is our most important point. Now the consumers are recognizing that we do have a quality product at a good price."

"You can see some revolutionary

changes going on in the supermarket industry," said Robb Kraft, premium brand manager at Fleming Cos., Oklahoma City. "It seems that consumers are definitely more knowledgeable about nutrition. They are really a more overall environmentally friendly type consumer than in the past. And of course they're looking for things that are convenient and easy to prepare.

"Traditionally," he continued, "private label hasn't offered alternatives for this new generation of consumer. And premium private-label products, with an attractive package and label, and quality, now offers something to those consumers.

"I think you've got not only acceptance but a general feeling out there from consumers that they are more willing to look at and buy these alternatives," Kraft said.

Brand emulation simply does not fit into that picture.

It does not figure in the planning at Super Store Industries, Lathrop, Calif., a retailer-owned company that supplies the Sunny Select brand of products to its owners Raley's and Bel Air Markets, West Sacramento, Calif., and Save Mart Supermarkets, Modesto, Calif. (The Sunny Select brand is also sold throughout southern California by Food 4 Less Supermarkets.)

"We don't need to emulate the brand or knock them off; we feel our design is consistent and good looking," said Jim Dimataris, marketing manager for controlled brands at Super Store Industries. Another reason for avoiding knockoffs: "We've run into a couple of situations where, if you get too close, they let you know it."