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Focus

Holographic Foil and Other Enhancements lend sales boost to AWG Private-Label Packages

by Staff

November-December, 2011
Imagine having enough faith in your own package decorating concepts that you’re willing to go into a sales call armed with full-color comps of 11 of the prospect’s own packages, which you have dressed up with gold metallic highlights — a $6,000-$7,000 investment in all. That’s the kind of presentation made in 2004 by David Hutchison, founder of BrightMARKS, Lenexa, KS, for the benefit of Scott Richey, executive director, AWG Brands, Associated Wholesale Grocers, Kansas City.

BrightMARKS, LLC, is a print enhancement company that brokers the basic print job to a handful of trusted printers, while possessing the machinery in place to do the finishing in-house. The company’s print finishing operation features the production capacity to produce prototypes, foil stamp, emboss, deboss, diecut, kiss cut, knife cut, fold, glue, tape and UV coat. The shop handles both large (to 49") and small sheet formats.

“When I started this business in 2003, one of the markets for packaging enhancements that I always felt was ‘undertapped’ was private brands,” says Hutchison. “When I discovered that Scott was the decision-maker for AWG Brands, I decided to approach him. Luckily, Scott is the type of person who doesn’t believe he knows everything.”

Associated Wholesale Grocers (AWG) is a retailer-owned cooperative serving over 2,500 retail member stores with grocery, fresh meat, fresh produce, specialty foods, health care and general merchandise items. Through an extensive distribution network and eight distribution centers, AWG and its subsidiaries deliver to over 2,500 retail outlets in 24 states. As such, AWG is in a position to profit from increased sales and market share of private-label groceries. According to grocery analysts who track private-label sales, the economy has given shoppers a reason to try private label as an alternative to national brands. Most come away satisfied with the quality.

Richey, who is responsible for approximately $1.1 billion in annual grocery sales for AWG, was keenly interested in the demonstration, and in boosting store-brand profits for his customers.

Still, BrightMARKS was a relatively new company, and caution was the watchword. Richey agreed to try adding gold foil stamping to his olive oil brand. AWG retailers who stocked the new package experienced a 30-percent jump in velocity for the brand and retention of 10-15 percent thereafter. Over time, other AWG packages received a makeover – including window cleaner, coffee and cereal. Each design has proven itself and has become a part of the AWG roster.

Profitable retailing
“Our frosted flakes are decorated with holographic hot foil stamping,” says Richey. “Next to the national brand on the store shelf, it really pops.” And when it comes to the cereal category, profits pop for the retailer as well. On average, retailer profits are 8 to 10 percent higher for private-brand cereals than for national brands.

Several of AWG’s other Best Choice cereals use the holographic effects in different ways, depending on the package graphics. For Frosted Berry O’s, the holographic effects are arranged in bands around the logo, and are repeated in the word “Berry,” where they enhance the words, as well as the eyes of the cartoon rhinoceros on the box. On the Raisin Bran package, the foil effects are arranged in circular swirls around the logo and the words “Extra Raisins.”

On the Right Choice Vanilla Almond box, the effects spark the wording of the brand name, as well as in the edges of the banner underneath that spells out “Vanilla Almond.” For the more simple graphics of the Corn Flakes package, the foil stamping is used to good effect, spelling out “Corn Flakes” in brilliant green.

Richey has a relatively simple method of choosing which products to choose for the enhanced packaging effects. “We wouldn’t use it for lower-priced products, or for frozen or dairy products – only dry grocery,” he says. “We only pitch it to our retailers when we will be able to deliver more profit to those retailers over national brands.” “Scott’s whole philosophy is profitability enhancement for his retailers,” agrees Hutchison.

Choosing to hot foil stamp the holographic effects has sustainability attributes for AWG as well. A recent study published by the Foil & Specialty Effects Association (FSEA) has confirmed the recyclability and repulpability of stamped foil-decorated paper and board. Pira International, Surrey, UK, a third-party research firm, conducted the study and produced the findings, which have been compiled in a 12-page study available through the FSEA.

While the successes achieved with package enhancements continue for AWG, and the market share of private label keeps growing (see “Study shows shoppers really save with store brands”), AWG and BrightMARKS look ready to continue collaborating on private-label packages with pizzazz.

For more information on decorating options for print and decorating, visit the FSEA website at www.fsea.com or call 785.271.5816.

Study shows shoppers really save with store brands

A new study of comparative prices, conducted by the Private Label Manufacturers Association, on a wide range of everyday supermarket purchases, revealed that shoppers on average could save 33.3 percent off their grocery bill by filling their market baskets with the store brand versions of 40 essential household items and pantry staples. The study occurred over a six-week period in a suburban supermarket located in the northeast, from February 12 through March 19, 2011.

The research tracked the pricing for typical grocery items at a conventional supermarket. Included in the survey were spring cleaning items like glass cleaner, paper towels and pine oil disinfectant, as well as two dozen pantry staples like corn flakes, pasta sauce, carbonated beverages and personal necessities like mouthwash and facial tissue.

The study results indicate that consumers who choose the retailer’s brand for products on the list rather than the national brand could save $42.30 (a savings of 33.3 percent) on average on their total market basket. When buying the national brands, the 40-item purchase came to $127.03 on average over six separate trips, while the same purchases for the retailer’s brands cost $84.73.

For every category in the study, a leading national brand product was compared to a similar store brand product and prices were adjusted to account for all known discounts, coupons and promotions available for each of the six shopping visits in the study.

Among individual food items, the cost savings ranged as high as 46.8 percent on carbonated beverages, 45 percent on ice cream, 43.5 percent on hot dog buns and 40 percent on pasta sauce. Data from the Nielsen Company show that annual sales of private-label products grew by more than $18 billion over the most recent 5-year period, and unit market share for private label in US supermarkets is now 23.5 percent.