Profitable Partnerships

Retailers discuss how packaging impacts deli and bakery sales.

Progressive Grocer hosted a roundtable discussion, “Driving Deli and Bakery Sales with Innovative Packaging Solutions,” on June 2 during the 2013 International Dairy-Deli-Bakery Expo in Orlando, Fla.

Moderated by PG Editor-in-Chief Jim Dudlicek, the panel consisted of Misty Abella, bakery specialist for Chandler, Ariz.-based Bashas’; Jacquelyn Moskalik, deli/foodservice category manager for Tyler, Texas-based Brookshire Grocery Co.; John Rose, Brookshire’s bakery category manager; Byron Hanson, director of deli/bakery and foodservice for Edina, Minn.-based Lunds/Byerly’s; Heather Turner, director of in-store execution for Prairie Village, Kan.-based Price Chopper Enterprises; Doug Larson, EVP of sales for Lenexa, Kan.-based Robbie Fantastic Flexibles; and Irv Robinson, Robbie’s co-founder and CEO.

The following is an edited transcript of the two-hour discussion. A more complete account of the event can be found at Progressivegrocer.com/delibakeryroundtable .

DUDLICEK: As a deli and bakery manager, what are the most important attributes that you look for in packaging for the deli and bakery in prepared foods and foodservice?

ROSE: A very important thing is visibility of the product — can the customer see what they’re buying? It’s probably one of the biggest things we look at.

MOSKALIK: In deli, it’s partly labor, too, so you don’t want to bring anything that’s too complex that takes them forever to put together, especially if it’s in a production item like rotisserie chickens.

TURNER: I agree that No. 1 is the presentation on the product. I’ve found some great packaging, but it just doesn’t showcase the product once you utilize it. I’d also say something easy to merchandise, because sometimes they come up with some great packaging, but it just doesn’t merchandise well for stacking.

ABELLA: The packaging being sturdy enough to stack, not only on the tables, but also in the freezer, and also that all the locking mechanisms work real well. It’s the box that it comes in, too. If the box is not sturdy enough, in the process of it getting shipped there, the edges will get bent or damaged.

DUDLICEK: What do you see as being the most pressing needs of your shoppers?

MOSKALIK: In deli, they definitely like products that are microwaveable, oven-safe, things that they can actually store a product in, in the refrigerator, without it going bad.

ABELLA: They let us know when the product is sliding around inside. They want it to make it home without damage, and they don’t want it to leak on them out of the bag. They don’t want it to leak inside their refrigerator.

ROSE: And they want resealable, too. We had a package a while back where they finally changed it to where you could seal it back up. Everything was great at the bakery point of sale. But there were difficulties getting the darn thing resealed again.

ABELLA: In bakery, we have a lot of icing and everything to deal with, and they don’t like it if the icing touches the top or the sides [of the box]. So the packaging has to be high enough that, whether it’s moved around or not in the basket, it doesn’t touch.

DUDLICEK: What kind of working relationship are you looking for from a packaging supplier?

ROSE: That’s a big deal. In my mind, the supplier has to be very invested in what it is you’re trying to do as a solution, rather than, “This is what we’ve got, and this is what you need to make work.”

TURNER: I would love to see more versatile packaging … where we have less packaging in the back room, but more uses for what we are carrying.

MOSKALIK: I think innovation is key, too. So, as a retailer, if we have a sandwich program or something like that, you want packaging that sets your program apart from your competitor.

ABELLA: We like to have our name on there, too; we created some stickers that go on packaging that says “Hometown Grown.” Everything is local. That’s a big thing. People put that on the table, and there’s our advertisement.

DUDLICEK: How have the packaging choices that you’ve made impacted the repeat sales of products in the deli and bakery? Is it something that really can make or break a product?

MOSKALIK: Absolutely, especially, if it’s customer-centered. We launched a pizza program, and we thought we would save the customer a step, so we make them in these foil pans, and all you do is stick it in your oven. That was the first program we actually got positive feedback from customers on how easy it was.

TURNER: The presentation, too. If it’s a cookie tray and it’s something that the consumer feels comfortable taking to a party and just being able to put right out on the table, I think is very important as well.

MOSKALIK: And green packaging, that’s huge, too. So have something that states that it’s green packaging, it’s recyclable.

TURNER: They’ll pay more for it, too.

DUDLICEK: How has sustainability impacted the way that you’re presenting your products in the deli and bakery?

ROSE: One time, we were looking at our clamshell line, which is obviously the bulk of our packaging. And we were talking to a supplier about one that was made from cornstarch. The issue we ran into internally was that, in Texas, that warehouse exceeds 110, 120 degrees [Fahrenheit] in the summer. And the packaging guys said, “That’s going to melt. You won’t even get it out of the warehouse. You’re going to have just a big glob in that box.” So we haven’t solved that yet.

TURNER: We do have a little bit of the green packaging more in the deli, not so much in the bakery yet. But it’s something we’ve been kind of looking at. I think we have some stores that it would go over really well in, but there’s some stores we have that the consumer would not pay extra and recognize or appreciate the green packaging.

HANSON: Our consumers are educated, so they do demand eco-friendly packaging more and more. We switched to all compostable packaging on the salad bars. We switched to all compostable flatware. Bakery is the challenge. So much of that product is in clear plastic. They have to see it to buy it, so how do you make that eco?

DUDLICEK: What is the message that you, as a retailer, want to convey or impart to your deli and bakery shoppers? And how does packaging help you get that message out about the food?

ROSE: Freshness is king. It’s got to say, cooked here, baked here, decorated here, whatever it might be. It wasn’t just something we pulled out of a case pack somewhere and slapped a price sticker on it. And lots of clarity so they can see that on the package.

TURNER: I just think simplicity in it, too. I’d prefer just a clean, simple look. It needs to convey the freshness and quality or in-house, but not so much of all the pretty graphics. I think it’s distracting and it kind of takes away from the product.

ABELLA: We do quite a bit of scratch, and want people to look inside the package and see what we bake. If there’s too much distraction, too many labels and everything over it, they get the impression that we shipped it in.

MOSKALIK: I think it’s important to brand your packaging where you can. We like to put our name on stuff we’re proud of.

HANSON: We tend to be a banner brand because of our niche in the marketplace. So, yes, we want to have that logo on there so that they know it came from Lunds and Byerly’s. It makes a big difference to people. In party planning, it’s a point of differentiation.

LARSON: Has that created different expectations of your packaging suppliers?

ROSE: We just did some packaging changes, with this emphasis of moving the label from the top of the package down to the sides. Our stickers weren’t staying put. So it was a simple thing to get with the supplier and say, “Can we just have these flat all the way around instead of these little flutes?” So they did it. It was very simple for them. So that’s one example where the packaging guys had to come in and really help us with that, and it worked out great.

MOSKALIK: We spent the last two-and-a-half years reimaging the deli, and we redid probably 75 percent of our packaging. Any new program we roll out, we bring a specific package for it. And then we brought in different packaging for multiple uses.

LARSON: Would you allow access to a supplier that would come in and do maybe an audit of store packaging that would allow you to gain knowledge about that?

MOSKALIK: Absolutely. I’m definitely open to suggestions from packaging suppliers.

HANSON: We have a supplier that will work with us and actually create packaging for us if we have the need. So when we went into the grab-and-go, take-and-bake pizza, we were using this eco bamboo packaging. But the crust wouldn’t crisp up. So they put the little bubble dents on the bottom, and that crisps it up now. You just so wish that there was one company that could fit all your needs, and if they would just either focus on deli and be a deli or a bakery provider.

DUDLICEK: What are your most pressing challenges in meeting shoppers’ expectations, and how can packaging help you solve those issues?

ROSE: We asked a supplier to come in and said, “Would you go out into our stores, because we really don’t remember what all we have out there, and look for that problem with every package you’ve got, identify those for us and bring those back in, and let’s see if we can come up with a comparable solution?” And he came in with solutions. And those problems just went away. It was helpful to have him doing that type of homework for us.

TURNER: I think integrity of the packaging is important. If they’re going to pay a premium price, I think they deserve premium packaging for that product.

MOSKALIK: Our biggest challenge is consistency. Two years ago, it was mismatched packaging. I would find sandwiches in turnover containers and just random things. So I imagine the consumer would get frustrated, too. It is really hard to brand a program when they decide to change the packaging in the store, so we’ve had to crack down on that a lot in the last two years.

DUDLICEK: Irv, talk a little bit about how you’ve been working with various retailers in order to address some of these common needs.

ROBINSON: We’ve been pretty focused on freshness. … We found out that over 50 percent of consumers take the cookies and put them in a Ziploc bag when they get home, because [otherwise] they end up eating stale cookies. We think we have a pretty good idea what the consumer is telling us through these intercepts and focus groups. But at the end of the day, the retailer makes the decision on what they think their consumers want.

Is this freshness issue an issue? How big of a problem is that for your stores? How big of a cost issue is it? Or should we be attacking different attributes that are more important?

ROSE: We did find that it did seem like the freshness was increased with the Robbie packaging just by the way it seals. But stackability is a big deal.

MOSKALIK: I struggle in packaging for larger things. We’re about to kick off a meals-to-go program, so there’s a daily special every day. It sells well. It’s one of my highest-volume SKUs. We do a lot of hot-case business; 38 percent of my business comes from a hot case.

ROBINSON: [In] working with Hen House, we worked with part of their group and developed merchandising racks. We had not been in the merchandising business, but our customers said, “Hey, we need to merchandise this. How are we going to do that?” Our real focus is, how do we understand the consumer? We spent a lot of time collaborating and talking and trying to understand versus just selling.

LARSON: I’d like to explore for just a minute the use of QR codes on your packaging.

TURNER: We’ve discussed it with the rotisserie chicken bag. If there was a QR code that you scanned, it took you to the website, and then had recipes. We have not gotten there yet, but I think that’s where the trends are going.

MOSKALIK: In specialty cheese, QR codes are key because we were kind of underdeveloped in that category. We signed on with a specialty cheese distributor, and our signage will have QR codes. Some of my stuff does have QR codes on the package. But I would love to do QR codes on more packaging in the deli.

HANSON: We have our own app now that will direct you to the web page. It will have our weekly feature sheets, with the recipes. We don’t have the QR codes yet. But social media is huge. We’re finding great success, particularly with specialty cheese. We tweet and Facebook, and we’re finding out the customers really respond to that.

DUDLICEK: Any final observations about deli packaging?

ROSE: Partnerships are a big deal, and the companies that can really customize in some cases, or really sit down and say, “What do you need to do, or what do we need to do for you?” Companies that do that, we really appreciate.

MOSKALIK: And understanding the business model and the direction that we’re going, that’s key, too, like going to the stores.

HANSON: People buy with their eyes, and the packaging makes a huge difference. It cost me $1 million one year in a packaging change that I thought was eco-friendly and they didn’t want it.

“I think it’s important to brand your packaging where you can. We like to put our name on stuff we’re proud of.”
—Jacquelyn Moskalik, Brookshire Grocery Co.

“People buy with their eyes, and the packaging makes a huge difference.”
—Byron Hanson, Lunds/Byerly’s

“The supplier has to be very invested in what it is you’re trying to do as a solution.”
—John Rose, Brookshire Grocery Co.