Never Underestimate the Power of Packaging and Labels

February 19th, 2024

packaging and labels

Having been directly involved in the packaging and labeling industry for more than 90 years, we still find that many manufacturers, retailers, and other organizations undervalue the importance of packaging and labels. Many continue to believe packaging/labels are nothing more than a functional necessity. This may have been true decades ago, but today, effective, well-designed packaging plays an integral role in the success of a brand and the products it sells.

Here are some examples:

Carlsberg Breweries. In 2018, Carlsberg released a more appealing packaging design for the company’s six-pack beers. They also removed a considerable amount of plastic, which helped reduce plastic waste and made the packaging more sustainable and environmentally responsible. Carlsberg reported a ten percent increase in sales in the first year after the new packaging was launched.

RXBR. This company makes healthy protein bars, “nut butter,” and granola. Initially, these products had very simple packaging. However, with growing competition, the company realized a new approach was needed, starting with how their products were packaged. In 2015, they introduced a much bolder, more colorful, and informative package for their products. The ingredients were prominently listed on the package label; no more searching, looking for the fine print to find the ingredients. After the new packaging was introduced, sales jumped a whopping 200 percent.

Just. This company prides itself on making food items that are healthy and sustainable. However, their packaging materials did not reflect this. In 2017, they redesigned their packaging using recycled materials, a more minimalist design, with easy-to-read nutritional information. The company reports that sales grew by 50 percent in the first year the change was made.

We could go on and on, but the point is that packaging and package labels can and often do play a crucial role in the marketing success of products. The more aesthetically appealing creative and the greater the attention to detail, the more they catch the customer’s eye and improve sales.

Why this happens is simple: View them as a form of marketing. Properly designed packaging and labels can evoke emotions and make consumers feel good about themselves and the items they purchase. The high-end fashion world was one of the first to grasp the importance of packaging and labels. It has now spread to almost all industries, from technology to pet supplies.

The Evolving Consumer and Consumer Expectations

After the Great Depression, World War II, and the tightlipped conservative 1950s, packaging was viewed as no more than a practical necessity, as mentioned earlier. Those were the heydays of plain brown bags and dull packaging.

However, things began to change when the Me Generation, otherwise known as the Baby Boomers, became the wealthiest generation in the country in the 1970s into the 1990s. These consumers were big-time spenders, often purchasing high-end products. They wanted the packaging of those products to reflect their good taste and the product inside.

And once again, packaging evoked emotions. This time, it helped Baby Boomers feel good about themselves and feel they were the success they – and their parents – had always hoped they would be.

And today, consumers are evolving once again. In the past few years, their focus is on all things “green” and sustainability. Consumers have become increasingly conscious of how their purchasing decisions impact the environment.

Both Carlsberg and Just, as mentioned above, were keen on demonstrating their commitment to sustainability by changing their packaging designs. Study after study indicates that consumers make purchasing decisions based on how eco-friendly a product is – even in how it is packaged. (See Sidebar Below: Consumers, Sustainability, and Packaging)

Creating Packaging that Leads to Sales

By now, we better understand just how important packaging and labels can be to a brand’s marketing success and its products. The question right now is, how to make this happen?

Invariably, for most organizations, it starts by selecting a packaging and label manufacturer that knows the importance of packaging and labeling, its impact on the consumer, and sales.

Some of the key considerations are the following:

  • First, consider your needs, the type of look and finish you are looking for, and an idea of how you would like the package to look. One way to accomplish this is to consider who will purchase the package. If the package is for mechanics, for example, a soft, off-white package will likely not do the trick. Purchasers of auto parts typically want bold, colorful packages that evoke feelings such as power, strength, and, in some cases, toughness.
  • Next, what is your budget? In many cases, an organization does not have a budget for packaging because they do not know the costs. According to Chron* quoting Entrepreneur magazine, packaging costs can constitute ten percent to as much as 40 percent of a product’s retail price.
  • The packaging/label manufacturer’s longevity is also a consideration. There are no stats about the average longevity of these companies. If family-operated, they may be passed on from generation to generation for decades. In other cases, a larger company may purchase the packaging manufacturer, keeping the original company’s name. However, whenever possible, look for a company that has its original roots in place and has been in business for several years. Typically, they have the resources to purchase high-end packaging and labeling equipment and computers – along with the talented people needed to operate this equipment.
  • Choose a label manufacturer that specializes in the type of label you need. For instance, a packaging or labeling company that makes medical industry packages may not be the best fit for a company that produces children’s toys.

The Packaged Recap

Packaging has become a powerful marketing tool since the last half of the 20th century. The days of being a functional necessity are long gone. Packaging and labels not only help sell products but help develop long-lasting relationships between consumers and brands.

Over time, they may need to be changed to address changes in consumer buying interests and habits. But make no mistake: packaging is crucial and plays a significant role in your brand’s success.

Kevin Florence is president and CEO of General Paper Goods Company and GENflex Labeling Solutions. Kevin and his brother Jeffery are third-generation family owners of the business.

Sidebar: Consumers, Sustainability, and Packaging

A study reported in Business News Daily found that:

72% of [consumers] reported that they were actively buying more environmentally friendly products than they did five years ago, while 81% said they expected to buy even more over the next five years.

Source: Your Customers Prefer Sustainable Products