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Do 'bosses' understand packaging's value?

In this question-and-answer interview, Brian Wagner of Packaging and Technology Integrated Solutions (PTIS) articulates the benefits of giving packaging a seat at the product/package development table.

 

Healthcare Packaging (HCP): Has packaging taken a back seat in the development of a product?

Brian Wagner (BW): Yes, that has been the case in my career going back 24 years, at least in the biggest of companies. In smaller and medium-sized companies, packaging is forced to be part of the upfront discussion. As companies grow and the process becomes more complex, artificial walls grow up between functions. So marketing, product development, package development, and all these separate functions have different goals and languages. If you look at things from the consumer's perspective when they buy and use a product, they are linked. The product is the combination of the product and the package, the brand equity, a consumer's prior experiences, services such as the company's Web site and a 1-800 number, and all of the sustainability components as well. (PTIS's Product Formula = product + package + brand equity + experiences + services + sustainability components.)

HCP: And it may be that packaging is what consumers use to make the final decision about what to buy on the shelf, yes?

BW: Yes, it clearly is. And you really can't ask the consumer, because it's linked in their subconscious, but it's such an important element.

HCP: Who is making packaging decisions in the corporate world?

BW: Marketing is making a lot of decisions on packaging. The way the process tends to start is at the fuzzy front end or what a lot of people refer to as "pre-concept work," which is typically a marketing research function, and sometimes involves gaining consumer insight through focus-group observational research, trends analysis, and ideation. Packaging professionals are seldom invited to participate at this stage. So, if you are in the packaging or the supply chain function, working to get involved at the front end you have to try to help educate your bosses and other key stakeholders on the importance of packaging. It's really new to them. So you need to build a fact-based story. We have been consulting for eight years, and we spend a lot of time doing that, but frankly it's not for the faint of heart. We really believe that packaging is a critical enabler and differentiator, but there are few published reports quantifying the value of packaging. So, one of the things that we often do for these companies is develop simple case stories. They are fact-based, quantifiable, and memorable.

HCP: Packaging can be part of a strategy to reduce costs through light-weighting, down-gauging, or serving as a sustainable material. Why doesn't that convince management of packaging's importance?

BW: That's the piece of packaging that executives tend to understand because it's on the cost-center side of the business. In accounting terms, packaging falls and resides in cost of goods sold. So, the opportunity to reduce costs, make lines more efficient, and focus on sustainability-reduction initiatives are issues companies have been doing for years, because they get that piece.

HCP: What piece don't they get?

BW: They don't get the profit-center side in which packaging is really part of the brand-that it's part of the advertising budget, part of promotion, that it can actually elevate the value of the company's brand. That tends to be where growth and innovation happen. You can innovate on the cost-saving side as well. But it's the profits-center growth side of the world where packaging is not really well understood.

HCP: Now I imagine that affects packaging across all types of industries. Let's look at the over-the-counter pharmaceutical business in particular. This segment would likely lag behind food and beverage in this area, yes?

BW: Yes, very much so. Ten years ago, when we did benchmarking work, I would have told you that if you wanted to look for innovative packaging, look in food and beverage. Five years ago, it started moving more into personal care and health and beauty aids. If you are in a major food and beverage company, you do this preconcept work and develop graphics and branding, and eventually the packaging department gets called in to say, 'We need to put this in a box or a bag or something.' The right way to do that is to involve packaging in the early preconcept work and to provide innovative ideas and opportunities for packaging to create relevant points of difference. This can also lead to speed-to-market and intellectual property benefits.

What we have seen in pharmaceutical OTCs is a different concept of the commercialization process. In the OTC world, you start with very technical needs. The concept stuff is really about a molecule; it's about a drug being developed. Then, for the drug, there is consideration given for packaging, but it tends to be far more functional: How much barrier does it need? How much protection from moisture in the environment? You focus on the efficacy of the product. That process takes months. So then you have put the product into a blister or a bottle or a pouch, and that goes to the Food and Drug Administration. Then there is consideration given around functionality from a child safety standpoint for instance. So it's driven by legislation. Several months go by, and then you have the product in a bottle or a pouch or a blister, and in the last stages, it gets approved and readied for commercialization. Then you thinks about putting 12 of them in a carton or another secondary container. There is really no time to innovate. There is very little time given to things like allowing the package to help with consumer compliance, or allowing the package to help the pharmacist or the doctor who is dosing this or prescribing it. Therefore, take the opportunity to work on those elements early on to identify new alternatives, differentiate your brand, and innovate in your product categories.

HCP: What are some of the key tips or best practices that you might recommend for someone in this pharmaceutical arena with regard to sustainability?

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