Brand Building Gains PACE

With US food giant Kraft’s buy-out of Cadbury now in the bag, concerns are already growing among consumers that the legendary brand may soon be extinct, with some UK chocolate lovers threatening a boycott. The same fear swept among members of the pharmaceutical industry in 2009 when Pfizer’s takeover of Wyeth kick-started a flurry of tie-ups that threatened to leave the industry with all but a handful of giant monopoly co-operations.

Many of the firms involved in these headlines were buyers or delegates at 2009’s Packaging and Converting Executive Forum, hosted by our sister firm, Arena International. During the event each year, leaders in the packaging, pharmaceutical, medical device and food industries discuss the importance of brand management and techniques for pushing their businesses forward.

Raising the profile of these brands and making them instantly recognisable can be achieved through their products’ packaging, the strategies a company takes to cash-in on global trends and via strategic acquisitions. With the annual event just around the corner, we provide a snapshot of how firms that attended PACE in 2009 realigned their brand identity through one of these three ways and reveal how each company plans to take its brand forward.

The branding strategy

A trend towards healthier eating gained pace throughout Europe and the US in 2009. Along this line, international baker and 2009 PACE buyer Sara Lee announced plans to realign its brand towards the healthy eating consumer by reducing its salt levels by 20% over the next five years. Sara Lee North American Retail and Foodservice executive vice president and chief executive officer CJ Fraleigh said as the average American consumes more than one-and-a-half times the maximum daily recommendation of sodium.

“We are excited to respond to consumers’ requests for lower-salt options, and plan to continue to provide great-tasting Sara Lee foods that they have come to know and love, but now with less salt,” Fraleigh said.

With the UN’s climate change conference in Copenhagen dominating headlines towards the latter part of the year, green efforts became en vogue in firms around the world. Not one to miss out on any popular trend, Coca-Cola launched a UK initiative to promote its ‘green’ strategy by encouraging consumers to recycle and reduce their Coca-Cola footprint by up to 40%. Coca-Cola Great Britain president Sanjay Guha said the company sees increasing recycling levels as one of the most effective ways in achieving their overall goal of operating in a responsible way.

“We’re committed to reducing out impact on the environment, but we know we have to encourage our consumers to do so as well. Sustainability is at the heart of everything we do – without sustainable, healthy communities we won’t have a sustainable business. Which is why, as well as taking action ourselves, we’re committed to helping consumers to do their bit as well,” Guha said.

Expect to see both these moves announced on their packaging in months to come.

Proprietary packaging

Consumers know and love their favourite products and they largely identify these not through the product’s contents but its packaging. In 2009, a number of firms, including GlaxoSmithKline and Tyson Foods, attended PACE to learn about the new packaging techniques on the market.

A technological development for GlaxoSmithKine (GSK) Consumer Healthcare led to a new packaging launch for its Aquafresh White & Shine toothpaste that allowed the product to have a holographic image and still be recyclable.

The new printing technique allowed the product to dazzle and still be eco-friendly when it was launched onto store shelves midway through the year. GSK Consumer Healthcare packaging development manager Michael J Larocca told healthcare-packaging.com the product was still able to be recycled at regular facilities.

“Traditional holographic packaging contains a laminated layer of metallized polyester that does not remove easily from the paperboard, making recycling very difficult. This package has no polyester or metal content. As a result, there is no impact to typical paperboard recycling streams,” Larocca said.

But proprietary issues need to be well thought out when it comes to packaging. 2009 PACE buyer Tyson Foods recently settled a consumer class action brought against it over an advertising campaign that claimed it used chicken without antibiotics. Controversy was sparked after competitor firms Sanderson and Perdue argued the claims had cost them $4m and $11m, respectively. Tyson has learnt the hard way that even with a clear brand image, the key is in the detail of the packaging. Kramon & Graham attorney James P. Ulwick said the decision meant no further upset would have to be endured by those seeking compensation.

“Approximately $4.4m will be made available for distribution to class members — without the class having to incur the considerable delay and risk of seeking relief through continued litigation and trial, as well as any subsequent appeals,” Ulwick said.

Packaging, brands and company takeovers

When Novartis exercised an option to take control of the Nestlé’s remaining stake in eye-care group Alcon this month, speculation mounted that the Swiss confectionary maker may also join the Cadbury bidding game.

Although that has proved to be a dead-end rumour, at the same time it announced a share buy-back programme and Nestlé CEO Paul Bulcke emphasised the company’s ambition.

“I am happy to be part of this successful creation of shareholder value by Nestlé. This divestment of our interest in Alcon will enable our management to concentrate on accelerating the development of Nestlé’s position as the world’s leading nutrition, health and wellness company,” Bulcke said.

Step back a year and PACE attendee Pfizer was about to announce on 26 January 2009 its $68bn buy-out of biotech firm Wyeth. Many saw the deal as key to broadening Pfizer’s product offering and increasing the diversity of its brand. In the announcement, Pfizer chief executive Jeffrey Kindler echoed the importance of diversity in its future strategy.

“With our combined biopharmaceuticals business, it [the combined company] will lead in primary and specialty care as well as in small and large molecules,” Kindler said.

What better way to convey that message by displaying it on its packaging. We look forward to seeing the results.