Recipe to Retail: Is packaging redesign a sound investment?

Are you planning a packaging redesign? Changing the graphic identity may be a worthwhile investment or costly blunder. Before taking the plunge, here are some insights to determine whether it’s a sound strategy.

Why redesign?

It is often the marketing department’s go-to tactic to improve sales. However, “nine out of 10 redesigns fail to deliver a meaningful sales lift in market”, according to NielsenIQ. This signals the need for a strong business case.

Packaging redesign coincides with rebranding, a strategy used to address a variety of issues like changes in customer needs, trends and the competitive market, which call for a shift in brand positioning.

Launching a brand into a new market sometimes requires a packaging rethink to align the positioning with differing consumer and market attributes.

Following corporate mergers, several disparate brands may end up under one umbrella. The brand hierarchy must be defined, followed by an alignment of the graphic identities.

As brands evolve, their appearance and message relevance may become outdated. A packaging makeover can update brand positioning and breathe new life into an aging brand.

New product launches over a brand’s lifetime may result in a fragmented portfolio with a mishmash of designs. A redesign is an opportunity to consolidate the product offering and create a portfolio with a cohesive look.

Before making a decision

Packaging is usually redesigned to solve a problem. Identifying the problem and conducting a root cause analysis will help to determine the best course of action. If flagging sales are attributed to poor product quality, uncompetitive pricing, distribution issues or insufficient marketing, a redesign will not solve the problem.

A cost-benefit analysis is another worthwhile exercise. Be sure to connect the silos by involving all business units in the process.

Review the packaging format to ensure it meets all requirements beyond protecting product integrity. Factor in sustainability, which is a growing concern among supply chain partners and consumers.

Redesigns are expensive. In addition to the cost of graphic design and packaging production, disposal and write-offs of old packaging must be considered. Then there’s the expense of marketing programs to raise awareness, prevent sales erosion and generate incremental sales.

Consider brand equity

I have seen brands introduce radically redesigned packaging. Brand recognition is of crucial importance to capture sales. Shoppers identify brands through unique visual elements, such as colours, logos, stylized fonts, shapes and images. It’s essential to maintain key characteristics through which the brand is recognized, thereby preserving brand equity.

Is a radical change required or will a simpler revision achieve objectives? A moderate brand refresh is an opportunity to revitalize a stale, outdated look and adjust messaging to better resonate with the target customer.

Watchouts

Redesigns that are not on the mark may require further revisions. The additional expense can be avoided by testing design concepts with target customers.

Transitioning all skus to a new design simultaneously ensures a cohesive look on shelf and reduces shopper confusion. However, it can result in substantial write-offs. New packaging rollouts require careful planning to prevent out of stocks and reduce old packaging and finished goods inventories.

Brand owners may assume redesigns are a quick fix. They consume a lot of time, resources and money. Plus, there are no guarantees they will improve sales and achieve objectives. Whether to initiate a packaging redesign is a critical strategic decision that requires a solid plan to protect the brand and bottom line.

As a CPG food consultant, Birgit Blain transforms food into retail-ready products. Her experience includes 17 years with Loblaw Brands and President’s Choice. Contact her at birgit@bbandassoc.com or learn more at www.bbandassoc.com.

This column was originally published in the June/July 2022 issue of Food in Canada.