In Japan, Even the Barcodes Are Well Designed

Barcodes grace almost every product for sale. Given how much package real estate they command, why shouldn’t they look cool?

Since 2005, D-Barcode has been creating custom barcodes for a mostly Japanese clientele. They’ve even begun selling their wares to anyone who wants to license them, starting at $1,500 for the design, and $200 a year for licensing. A custom or exclusive use code will run upwards of $4,000–but given that companies spend millions on designing a single package, why don’t we see more detailed thinking like this? Middle managers spend weeks arguing about kerning–it’d be better if they spent more time rethinking every inch of such highly prized real estate.

Good Earth using Social Networks to Give 50% of Profits to Charities

Most Engaging Good Earth will donate half of its after-tax profits from sales of its specialty teas and organic coffees between Oct. 25 and Feb. 28, 2010 to three charities. The charities will be determined through online voting at GoodEarthCares.com.

Good Earth Teas and Good Earth Coffee are part of the Tata Group, the largest India-headquartered multinational in North America, whose brands also include Eight O’Clock Coffee and Tetley Tea.

Good Earth Marketing Director Deborah Glasser describes the Good Earth Cares initiative as a “unique collaboration” between the brand and the American public. “Our customers can feel good knowing that part of the purchase price of each product will go to a great cause, and that they can help decide which charities receive the donation.”

The brand’s success in building a loyal base of customers during its more than 30 years in business “now allows us to branch out with this new promotion and introduce Good Earth to new, like-minded consumers who are interested in both great-tasting quality products and brands with a conscience,” Glasser told Marketing Daily.

The cause-related marketing initiative, announced in a newspaper FSI that dropped on Oct. 25, is also being promoted via online advertising, Facebook (Facebook.com/GoodEarthTea) and Twitter (@GoodEarthTea). Consumers and charities are being encouraged to spread the word through sharing tools. One of the first herbal companies in the U.S., Good Earth has a history of working with charities. Recent efforts have included a partnership with American Forests and an Earth Day 2009 sweepstakes with a grand prize of $10,000 for the winner and another $10,000 donated to the winner’s charity of choice, which was American Forests.

The brand also supports its Original T-Bag Designs business through teabag recycling and awareness campaigns. “We strongly believe in doing the right thing, respecting the planet and the people on it,” says Glasser.

As of Nov. 6, the five charities receiving the most votes in the Cares promotion are: Cancer Research Institute, American Forests, Scholarship America, Trust for Public Land and Parent Heart Watch. The first four are included as choices on the ballot, but voters may also suggest their own charities.

Kellogg Removing Antioxidant Claims From Some Cereal Boxes

FDA Increases Scrutiny of Food Marketing, Plans New Health Labeling System

It’s a cold environment for food marketers trying to make health claims. Kellogg Co. today announced it would discontinue marketing Rice Krispies and Cocoa Krispies as products that could boost a child’s immunity. In a statement, the company said it began adding antioxidants to the cereals last year.

 

Cocoa Krispies packaging with the claim that the cereal helps boost a child’s immunity.

“While science shows that these antioxidants help support the immune system, given the public attention on H1N1, the company decided to make this change,” the statement read. “We will, however, continue to provide the increased amounts of vitamins A, B, C and E that the cereal offers.”

Kellogg said it would continue to respond to consumer’s desire for improved nutrition, “and we are committed to communicating the importance of nutrition to our consumers.” But it’s getting a lot harder. In this case, Kellogg was responding to parental concerns that advertising and packaging was preying on fears of the H1N1 virus. But the FDA has been coming down on food marketers with increasing frequency.

“If I was sitting in a food company, I would probably look at all of the messaging on all of my packages to make sure I’m not over-promising and under-delivering to make sure that the [health] claims are not more than they ought to be,” said Susan Moores, a registered dietitian and spokeswoman for the American Dietetic Association.

Last month, the FDA announced it would create its own front-of-pack labeling system, ending not only the Smart Choices initiative embraced by most prominent package-food companies, but all front-of-pack labeling systems.

Smart Choices?
The FDA will now be developing a standardized labeling system, but there’s no guidance yet on when it will be ready. “Consumers trust when they see a health claim,” said Keri Gans, a registered dietitian. “The truth is the majority of these claims have been substantiated through rigorous FDA control, but this Smart Choices program made the FDA take a closer look, and I think that’s a positive thing.”

Ms. Moores said there may be some consumer fallout as a result of some Smart Choices labels, which appeared on items such as mayonnaise and certain cereals in which sugar was the first ingredient listed.

“There were some obvious cases like with Frosted Flakes,” said Don Ochwat, editor of Shopper Marketing Magazine. “That’s going to raise an eyebrow.”

General Mills’ Cheerios was another well-publicized case this spring, as the FDA came down on the cereal, demanding that it cease claims that eating Cheerios as part of a low-fat diet can lower cholesterol 4% in six weeks. Now Kellogg’s Cocoa Krispies has come under fire for claims that the sugary cereal can boost a child’s immunity by providing a dose of antioxidants. The FDA has yet to step in on that matter.

Mr. Ochwat predicts that food marketers will all eventually go through third-party certification as a matter of course in making health claims. Most marketers already do that when making claims about the environmental sustainability. But the next headache would be in discerning which of those organizations were reputable.

To be fair, Mr. Ochwat said relatively few food and beverage marketers are concerned about making health claims, and a tiny percentage of those brands have been called on the carpet. When his trade magazine surveyed food and beverage marketers in January, about 52% of them said they had found ways of promoting the health benefits of their products during 2008, in response to consumer desire for healthier products. “I was a little surprised,” he said. “They haven’t jumped to it as quickly as we’d thought.”

Affluent Shoppers Will Pay More for Safe, Healthy Food: Survey

A new US survey of more affluent consumers from strategic marketing communications firm Context Marketing, “Beyond Organic — How Evolving Consumer Concerns Influence Food Purchases,” has found that most respondents are highly concerned about the safety of the food they buy and would pay more for food they believe to be safer or healthier. The research also found that assurances about what a food doesn’t contain, such as pesticides or antibiotics, matter a great deal to these consumers, along with ethical claims that reinforce quality and safety perceptions.

Containing research recently conducted by Context Marketing and Doylestown, Pa.-based MRops, Inc. among consumers who fit the demographics for specialty grocery shoppers, “Beyond Organic” spotlights which food quality claims are most important to these shoppers.

According to the report, 57 percent of respondents said they were “definitely” or “very concerned” about the safety of the U.S. food supply, with another 39 percent “slightly” or “somewhat” concerned.” Only 4 percent said they had no concerns about food safety.

When asked to evaluate a range of food quality claims often found on food packages or at point of sale, respondents said that the claims they found most meaningful had to do with items not found in the foods, including pesticides, antibiotics, mercury and artificial hormones. Consumers rated claims such as “organic,” “free-range” and “grass fed” as less important. The survey didn’t ask about nutritional claims.

While respondents confirmed that low price is a major influence on most food purchases, 60 percent said they would pay up to 10 percent more for food they think is healthier, safer or produced according to higher ethical standards, and 14 percent said they would pay a premium greater than 10 percent.

Ethical claims are also important, although, alone, they may not impel most shoppers to buy a food product, according to Bob Kenney, principal of Context Marketing, which is located in the San Francisco Bay area. “Many consumers see ethical claims as part of a cluster of brand or product attributes they find reassuring,” noted Kenney. “As such, ethical claims provide credibility for other claims a company makes about product quality or safety.”

He added that 70 percent of respondents said that whether a company or brand acts ethically influences their decision to buy a product, and 48 percent said they stopped buying a brand when they found out the supplier acted in a way they deemed socially irresponsible or unethical.

The September 2009 online survey included 600 working adults between the ages of 20 and 64, equally representing women and men living in major U.S. markets. Almost all of the respondents had at least some college education, and 64 percent had earned a college degree or higher. Fifty percent had a yearly household income of $75,000 or higher.

A copy of the report can be downloaded www.contextmarketing.com.

Exotic Functionals’ Among Next-Wave Drinks

Cocktails and exotically flavored drinks with functional properties will be key beverage category influences in the years ahead, as consumers’ love affair with nutritional offerings that can satisfy their demand for taste combined with health and wellness benefits continues, according to a new Culinary Trend Mapping Report from the Center for Culinary Development (CCD) and Packaged Facts. Cocktails will continue to experience a renaissance as interest in artisan liquors, as well as retro drinks, gathers momentum. “The same consumers who value local foods, artisan products and traditional food preparation methods are finding those values expressed in the new cocktail movement, with its glorification of pre-Prohibition libations, micro-batch spirits and culinary inspiration,” sum up CCD’s analysts. CCD expects cocktails to inspire a wave of ready-to-drink, non-alcoholic beverages as this trend continues to mature. On the exotic functionals front, pomegranate and blueberry have been overshadowed by goji berry, mangosteen and açaí, and these, in turn, will be overshadowed by aronia, yumberry and other next-wave flavors within the next year or two, according to the beverage trends report, which notes that 53% of U.S. consumers said that they purchased a product specifically for its antioxidant content last year. Other RTD beverage trends identified and examined in the report include RTD drinks offering a convenient way to ingest traditional ingredients from Eastern cuisines believed to contribute to health and longevity; coconut water (rich in potassium, calcium, magnesium and electrolytes, as well as refreshing); “21st Century sodas” offering sugar cane sugar, natural ingredients and exotic flavors as replacements for high-fructose corn syrup and artificial ingredients; kids’ functionals that make ingesting probiotics, antioxidants and vitamins fun; and stevia-sweetened drinks. CCD believes that major beverage manufacturers betting on stevia’s ability to revive the soft drink category will be far from alone in launching beverages that take advantage of stevia’s versatility.

Vitaminwater Gets Facebookers Brainstorming on a New Flavor

Vitaminwater ventured into the world of crowdsourcing Tuesday with the launch of a new a Facebook application in which users compete to create the energy drink’s newest flavor, even down to the bottle design, to the tune of a $5,000 prize.

Vitamin Water's New FaceBook application

The new “flavor creator” app features a cartoon of a lab-coat-clad woman who instructs users to vote on their favorite flavor or combination of flavors, based on the most buzz-worthy results culled from online sources like Google News and the food photography blog Foodgawker. Ginger, for example, takes the top slot for generating buzz online.

Users can play games and take quizzes about their fitness levels to determine which kinds of vitamins and minerals should be part of their new concoction, and can also team up with other Facebookers to design a bottle for the new drink. “We’re basically handing over the control and the lab coat to our fans,” said Eric Berniker, a senior vice president of marketing for Vitaminwater. “It’s one of the hottest brands with youth, and of course, Facebook is a great way to connect with them.”

The winning flavor will be selected by country singer Carrie Underwood and rapper 50 Cent, and will hit store shelves in March of 2010. The rapper, also an investor in Vitaminwater, has already co-created his own grape flavor, “Formula 50,” and allegedly raked in some $400 million when Coca-Cola acquired Vitaminwater’s parent company, Glaceau, for $4.1 billion in 2007.

Vitaminwater is far from the first brand to seek online fan participation. The online T-shirt company Threadless paved the way for companies to benefit from the idea of consumer-as-designer, scoring big with its crowdsourcing business model of rewarding the top user-submitted T-shirt designs.

And this isn’t the first time Vitaminwater has used a social-networking presence to gain fans. It launched its Facebook page in February and has more than 400,000 fans. During the NCAA basketball tournament in March, it devoted television airtime to plugging the page. In May, Vitaminwater worked with MySpace Music to offer a free song download with the purchase of a bottle of its new Sync flavor.

The Vitaminwater line markets itself to health-conscious consumers, with its emphasis on vitamin and mineral combinations for specific benefits like “focus” and “endurance.” Earlier this year, the Center for Science in the Public Interest filed a class-action lawsuit against Coca-Cola on the grounds that Vitaminwater made deceptive claims about the drink’s health benefits.

Next Industrial Revolution Has Begun

There’s a revolution brewing. We’re rethinking about the manufacture of consumer products and packaging.

The first Industrial Revolution featured a burst of creativity, ingenuity and inventiveness, enabling goods to be mass-produced. The next Industrial Revolution will utilize those very assets, along with the latest technological advances. By becoming better stewards of our energy, natural resources and the environment, we can make products and packaging better than we have in the past.

Environmentally friendly packaging is gaining impetus daily, thanks to companies like Wal-Mart. The retailer signaled a major trend with its Sustainable Packaging Scorecard in 2006 for its 65,000+ suppliers with the ultimate goal of becoming “packaging neutral” by 2025. Translation: having all packaging that flows through its distribution chain recyclable, reusable, compostable or recoverable for future use by 2025.

Wal-Mart’s purchasing power sent ripples throughout all consumer product sectors. Its ambitious agenda pushed product companies to adopt sustainable packaging measures. While still a brave new world for business, measures can be implemented, one at a time, making a positive environmental impact, while being economical. However, to be effective, companies must have a sustainable mindset from the top down, in every aspect of their businesses.

Environmentally friendly packaging reduces, reuses, recycles, removes, renews. Reducing excess packaging is the most sustainable of steps to take. By cutting down on overall packaging footprints and extraneous materials inside of packaging, there are substantive savings. Many companies are steadily doing just that.

As a result, more products can be packed into shipping cartons and more cartons onto pallets. Fewer truckloads reduce energy costs and harmful emissions into the environment. The “reduce” concept has many ramifications, all of which can add substantially to profits.

Reusing packaging is the next most sustainable step. This actually used to be more widespread than it is today. In the past, old-fashioned milk bottles were reused by local dairy producers. Today, the return deposits on soda cans enable manufacturers to collect, clean and reuse them. Reusable convenient food packaging helps eliminate waste, especially when repurposed.

And how about developing packaging that is literally part of the product? Hasbro Sigma 6 GI Joe Action figures packaging turns into carrying cases that hold the figures and their accessories.

In their book, Cradle to Cradle, William McDonough and Michael Braungart make the case that products and packaging can and should be reconfigured using a closed-loop process. It’s the ultimate recycling.

Since the Industrial Revolution, a “cradle to grave” system has been in place; products and packaging ending up in landfills at the end of their useful life cycles. In a “cradle to cradle” system, materials are perpetually circulated and reused in “closed loops.” This extracts maximum value from materials already in use without ending up in landfills, virtually eliminating the heavy waste streams we have today.

Many companies purchase packaging made from post-consumer waste. Recycled packaging and packaging made from renewable sources are a way of life for natural-product companies that have practiced sustainability for decades. For example, Kashi cereals and Tom’s of Maine oral and personal care products use recycled packaging. Widespread distribution has made mainstream consumers and mass market product manufacturers more aware of recycled packaging.

There was a time when packaging was meant to deliver products intact, retain integrity; to keep them safe for consumers. Now, packaging itself has to become safer and healthier for society. It must deliver the usual benefits, while minimizing negative effects on the environment.

Let the next revolution begin so we can start eliminating million tons of product and packaging waste from worldwide landfills. We’ll all be able to breathe a little bit easier.

Bottled Water Demand Falls – Price War Fires Up!!

Bottled-water makers have stepped up a months-long price war this summer to win back customers who have turned on the tap to save money and reduce environmental waste.

This month, PepsiCo Inc.’s Aquafina brand sold at some grocery stores for as little as $2.99 for a 24-pack of half-liter bottles — less than a penny an ounce and about half of its typical price. Still, that wasn’t as cheap as the private-label brand at supermarket chain Kroger Co., on sale for $2.49.

Getty images

“It used to be $6.99 for a 24-pack, then $5.99,” said Michael Bellas, chief executive of New York consulting firm Beverage Marketing Corp. “But $2.49? That’s the lowest I’ve seen.”

In the first quarter of 2009, bottled-water brands sold for an average of $1.35 a gallon in the U.S., down more than 30% from $1.94 in 2001, according to the consulting firm. It isn’t clear whether beverage and bottling companies make any money on bottled water at these prices, beverage analysts say.

In recent years, water has given the companies a huge lift in their overall volumes sold, an indicator watched closely by Wall Street. But the beverage makers haven’t seen a big jump in earnings, in part because of their sizable investment in the water business, said Bill Pecoriello, CEO of ConsumerEdge Research LLC. The price wars aggravate a continuing problem, Mr. Pecoriello said.

The bottling companies rely on single-serve bottles sold in vending machines and coolers for much of their profit margin on bottled water, but with those sales down, they are also struggling to make water profitable, he said.

Some analysts predict the price of bottled water could fall even further by next summer, as PepsiCo absorbs its two biggest bottlers and makes expected changes to lower its delivery costs. Pepsi declined to comment on its plans.

Bottled-water makers caution that the low prices are promotional and average normal retail prices for their 24-packs haven’t fallen as drastically. Bargains before holidays like Labor Day are common, they say.

The price slashing comes as bottled-water sales are declining after more than a decade of blockbuster growth. For the year ended July 12, U.S. sales of bottled water dropped 6% to $7.6 billion, according to Chicago-based market-research firm Information Resources Inc., whose figures don’t include sales from Wal-Mart Stores Inc.

Sales of bottled water have suffered as environmentalists urged boycotts of the product. In 2007, environmental groups intensified campaigns to persuade consumers to reject bottled water as wasteful. Several city governments and restaurants stopped stocking it.

Coca-Cola Co., Pepsi and Nestlé Waters North America Inc., a unit of Swiss food giant Nestlé SA and America’s biggest bottled-water maker, have been reducing the amount of plastic in their bottles in response to public criticism.

Pepsi’s “Eco-Fina” half-liter bottle contains less than half the plastic of its 2002 half-liter bottle. Coke has promised to begin using a bottle made partly of plant-based materials late this year.

Falling prices for plastic bottles have helped offset the price cuts by the beverage companies and other bottled-water suppliers, including Niagara Bottling LLC, which produces private-label brands.

Coke and its bottlers are reluctant to slash prices for Dasani, but have sometimes done so for the Aquarius Spring water brand. Coke’s refusal to lower Dasani prices has come at a cost: The brand’s U.S. sales volume slid nearly 26% in grocery and other stores, excluding Wal-Mart, in the 12 weeks ended Aug. 8, according to a report by J.P. Morgan Chase & Co., which cited data from Nielsen Syndicate Market Data.

Aquafina’s sales fell a less-steep 13.8% over the same period, helped by a 5% price cut. Sales of Poland Spring, owned by Nestlé, fell 8.9% while its prices sank 11.3%.

Brandon Leck, director of Coca-Cola North America’s water brands, said the company expects bottled-water sales to improve with the economy.

“As the economy recovers, we’re confident that consumers’ demand for value, convenience, and purity will prevail,” said Pepsi spokesman Bart Casabona.

Timothy F. Brown, head of retail operations for Nestlé, said his company remains bullish on bottled water. While Nestlé has been involved in cutting prices, he said much of the discount pricing was set by retailers eager to drive traffic to their stores.

EtenPerMeter.nl sells vegetables (commodities) as an experience

A Dutch farmer took a different approach for selling his vegetables with his concept EtenPerMeter.nl (Dutch) (English). He tries to sell his commodities (because that is what potatoes are) as an experience. You as a consumer come over the farmer and for one day you may feel what it’s like to dig in the mud, looking for your potatoes and onions. At least that is the positive feeling he tries to sell. Back to nature! You then pay for your vegetables per meter you’ve worked. (€ 0,75/mtr). Since you do all the work, you pay significantly less than in a normal store.
Although the transaction here is rather straight forward, the approach is quite innovative. In a normal situation where commodities are being sold as an experience it is by creating an exceptional good service around it. Think of selling coffee in such a pleasant environment as Starbucks. The creating of such a warm atmosphere with all the branding and so on, is more expensive for a company. To earn back all this efforts, Starbucks asks significantly more for his coffee. And if you do it right you can ask even more what leads to large profits margins. This Dutch farmer did manage to take away a service and sell that as an experience. He enlarged his profit margins, not by first making more costs, but by cutting down on labor expenses. As for now, Etenpermeter seems to be a big success.

US Retailer making Organic products easier to find on the shelf.

To make natural, organic and earth-friendly products easier for its shoppers to find, Publix, a privately owned and operated  US retailer with over 1,000 stores,  offers a shelf tag program. The tan-colored tags include in some cases an information icon to provide additional help with product selection. The three types of shelf tags are:

–Organic: An information icon found at the bottom right-hand corner of the tag denotes “USDA Organic,” which means the item contains 95 percent to 100 percent organic ingredients.
–Made with Organic Ingredients: An information icon stands for “Made with Organic Ingredients,” meaning that the item is made with 70 percent to 94 percent organic ingredients.
–Natural or Earth-Friendly: These shelf tags have no information icon, but the tan color is meant to inform customers the item is minimally processed; contains no artificial colors, flavors, preservatives, or sweeteners; or produced in a way that minimizes any adverse environmental effect.

“The tan shelf tags allow customers to simply look at the tag color and icons to identify natural or organic products, rather than having to look at the details of the product label itself,” noted Maria Brous, Publix’s director of media and community relations. “Customers interested in avoiding chemicals, added hormones and additives in foods can quickly and easily find organic, natural and earth-friendly items throughout the store.”

The company uses the tags for items sold under the Publix and Publix GreenWise Market brands, as well as for national brand products. Information about the natural and organic tags is available on Publix’s Web site, in addition to background on its “Nutrition Facts” shelf labels.