BRAND SECRETS AND STRATEGIES

PODCAST #170

Hello and thank you for joining us today. This is the Brand Secrets and Strategies Podcast #170

Welcome to the Brand Secrets and Strategies podcast where the focus is on empowering brands and raising the bar.

I’m your host Dan Lohman. This weekly show is dedicated to getting your brand on the shelf and keeping it there.

Get ready to learn actionable insights and strategic solutions to grow your brand and save you valuable time and money.

LETS ROLL UP OUR SLEEVES AND GET STARTED!

Compossible packaging is one of the most confusing topics in this industry. I attend a lot of trade shows and industry events. This is the biggest pain point brands share with me. Would you like to un-complicate composable packaging? Would you like top know how you can leverage it to sustainably grow your brand? That’s what today’s show is about. Today you’ll get your most pressing compostable packaging questions answered by the leading industry expert so stay tuned!

Welcome, you've created a product that's going to revolutionize the category and disrupt the way people think about healthy eating. You put all your love, sweat, and energy Into creating a product that's going to change the world but then you're forced to put it into a package that doesn't align with your product. You're forced to choose packaging that doesn't align with your mission and everything your brand stands for. You're forced to use packaging that will live in a landfill for many generations. If only there was a better alternative. Well there is and that's the focus of today's show.

Composable packaging is something that is very near and dear to my heart because I too want to reduce the impact of waste on our planet. More importantly, my mission is to teach natural brands creative strategies to help get your product on more store shelves and into the hands of more shoppers. Packaging is the most overlooked asset you have when it comes to your go-to-market strategy. Kelly has been a huge help making this complex topic simple and easy to understand.

Let's face it retail is expensive, it's pay to play. Small disruptive brands are at a significant competitive disadvantage. Over 80% of natural brands fail within the first year - I'm committed to change it.

Everything is negotiable, especially in this industry. What retailers want more than anything are loyal committed shoppers that return time and time again, more customers in their stores, a competitive advantage in their market, and a reasonable profit. Any brand that can help retailers achieve this can leverage it to get better shelf placement, more promotional support, and better merchandising. Retailers what and need your help to stand out in their market.

Savvy retailers already know how well your brand is performing on their shelves. what they need are insights, actionable insights, that they don't get from your competitors. This begins with your packaging.

Your packaging makes a statement about your brand. In some cases, your packaging is your brand. it should work as hard as you do to attract shoppers and drive profitable sales in the category. This is focus of all my content which includes several collaborations with my good friend Kelly Williams on my podcasts, mini-courses, and YouTube videos. I’ll be certain to put a link to those resources on the podcast webpage and in the show notes.

As always, I want to thank you for listening. This show is about you and it's for you. In appreciation for your time, there’s a free downloadable guide for you at the end of every episode. I always include one, easy to download, quick to digest strategy that you can instantly adopt and make your own. One you can use to grow sustainable sales and compete more effectively with.

Don't forget to go back and listen to previous episodes where I may answer some of your most pressing questions - the things that keep you up at night. If you liked this episode, share with your friends and subscribe so you’ll be the first to get new brand-building content as soon as it becomes available.

Remember the goal here is to get your products onto more store shelves and into the hands of more shoppers - including online.

Now here’s Kelly with NatureFlex.

All right, so lets' get started. This is what we make, this is the only time that we can talk about what we do, but this is what's called cellophane. It was the, naturally compostable of home and industrial, redegradable, inadvertently adjustable, this was was made out of before we changed it. And I was part of that change. So I'm here on a correction program to make up for the sins of being one of the guys that designed packaging that's good and over-engineered. That bag of chips can go to Mars and back and still be fresh. Yet nothing can happen with that package afterward.

So I'm going to kind of bring in a couple of slides into where you are as brands and eCommerce. So the mountains you see outside those were formed by pressure, earthquakes are caused by pressure, and markets are both formed and shaped my pressure. And right now we're walking around on a 7.0 rector scale type of construction. I tend to bug into these four groups, so I'll go over them just real quickly. You've got disruption, you've got generational for that, digital, what I call the small brand explosion. I'm going to start first and my first natural product's Expo West in 2016, and then walking around I realized something fundamental, anyone can become a brand. This market is deregulated. Anyone can get into this space, so that's caused a lot of construction as well and you can read through it. So, that I think is a of what I would call disruptive forces. Things that you have to react to or find your way through it.

And then there's also the reinvention side, the innovation side with eCommerce in general or even broader between mass merchant, specialty store, now online think of, internet of things, artificial intelligence, all of those things are innovations that's causing you to have to figure out what's your position in that, but the one that's often this but now is definitely at the center of conversation is the environmental impact of what you do. And it's not just the brand, the ingredients that you source, how you put it together got to also includes the package. I can tell you first hand because we're in the middle of it, so brands contact us directly. There's the pain and button that's been hit around the world related to single-use plastics and single-use packaging. So there's a lot of concern around what to do about it. You can't put a sustainable product in a not sustainable package, so I'm going to try to convince you that packaging is the glue that ties all of these moving pieces together.

So if you look at some of the other measurable things, has been going on for a long time. It's actually getting faster because labels are changing, what you put on in terms of certifications, so just a lot of reasons why every time you do a print packaging, something has to change on it. So it's creating headaches, if not outright chaos. If you look at the commercial reality, I like to say it's not the time value of money, it's the money value of time. What I mean by that is how long does it take you to come out with new brand ideas? How long does it take you to test those ideas? How long does it take you to put a product into a test market to see how well it's received and then when you finally decide to go to market with it, how long does it take you to do that? How long does it take you to get packaging to do that? That's all opportunity, that's money because you got to do it faster.

Larger legacy brands, one year to launch a new product for a category, because you just can't take all your ideas to market because the way packaging is made doesn't allow you to do that today. If you look at managing the supply chain that there's... We're going in the direction that has to be made, and there are ways that that can be done. Tracking, traceability, direct consumer engagement. You starting to see the tie in here, of how packaging becomes the glue that holds these pieces together, but they can't do any harm. If it does harm... If we continue to let packaging do harm, we won't need packaging anymore. That's a very, very important point. If we continue to let packaging that's going to outlive our great, great-grandchildren then there'll be a point we won't need it anymore. But packaging pulls all of these pieces together. You can form your path with packaging. To understand packaging is to understand anything really, you can't understand the present without an understanding of the past. And you certainly cannot anticipate a future if you don't have both of those.

So I think it's worth giving you just a little bit of a packing lesson. So to the left, that's an old, when clear transparent packaging was first available to the world, that's what it was, we started with the generals, so you went to the counter and asked for what you wanted and they will go and get it. Then we went to the grocery stores. Who remembers this? Sticker labels for prices, that was a nightmare. The bargain becomes long changed everything. What's next? You're already seeing signs of it. There's going to be a point till every single package is uniquely scalable. So we're going to get to that later.

What you want to be constant is change. Packaging has been evolving and changing since the very beginning. We went from glass to metal cans, to plastic bottles to flexible packaging, and flexible packaging has a lot of reasons why we see it everywhere, and most brands start there. We simply cannot feed nine billion people without flexible packaging. You can't. Think about that for a second, I can make a roll of the printed packaging in Germany and ship it to San Diego pretty cost-effective. Am I going to ship empty bottles? No. So it gives a lot of flexibility.

Here's the problem. We have all these benefits of convenience, lightweight protection coming from that industry. We all this deep, dark secret, that of all the benefits of flexible packaging, we knew that once you use it, there's not a thing you can do with it, but no one talked about that because the benefits were so overwhelming. We didn't anticipate the impact of this. This is a population growth rate. So what we have is a wrongly designed solution coupled with a population explosion and it's not just the population, packaging is growing faster than us because you've got areas of the world where there's just not any packaging for the first time. So it's actually compounded. That correlates here with the plastics production just a little bit, the steepness of that curve, 300 million times a year of plastics, for which the capital goes into packaging. It's a pretty intense amount to deal with.

So my question is can you solve the plastics problem with plastics? How do you do that? How does anyone solve... Coca Cola announced this week that it's only single-use packaging if the consumer fails to recycle, that's placing a burden downstream on consumers, on municipalities. Does this picture look sustainable to you? This is currently how we deal with what you throw in the recycle bin?

And then that could be up, when you put the flexible packaging plastics in that recycle bin, even if it says it's recyclable, it's not going to be a recycle. It's going to contaminate the paper stream because these material recovery facilities were never designed for flexible plastics. They were designed for rigid plastics, and paper, and paper board. So it doesn't matter if this recyclable and what makes it recyclable is they make it out of a polymer that's very close to your detergent bottles and your milk bottles.

So it's materially compatible with those, but it's never going to go into them because even if you could isolate it, the equipment that takes care of this doesn't go in there. So it's not recycling, and it's also not recycling, because you do not go from this bag into another one of these bags. You're actually just repurposing it. You're making dog Frisbees and Ikea furniture out of it, you're not actually making packaging. So again, these are sustainable defined, building and construction products that dump all of its waste packaging into. And when you see the reports or the statements saying, well it's all coming from Southeast Asia, it's our trash coming from Southeast Asia, because that's where we ship it. China doesn't take it anymore, now it goes to Vietnam and other countries, but a lot of that waste is actually our waste.

So what you do? And by the way, emoji is my favorite one, I use it all the time whenever my wife asks me anything on, I don't know. Without packaging, you don't have a $3.8 trillion package consumer goods industry, you don't have a brand without packaging, you don't have a product without packaging. You have to have packaging. What most people don't realize is it's not attached to profits. It's not actually a center. And the eCommerce I think there's an opportunity to really change the packaging playbook because right now retailers have a lot of in size, the width, the weight, how many ounces are in your package? Because their focus is on how much they can get on a store shelf? Commerce has lots of packaging design flexibility to design right, package it right, just gives a lot more flexibility. So from the design standpoint, I think it gives us a lot of opportunities. So what would you think if I told you this could actually be a physical form of social media?

Think about it, we spend more time owning packaging on an individual basis, than we watch YouTube ads, ads past the point of skip ad, or watch TV commercials, or listen to radio ads, we look at packaging uninterrupted. Even when 3000 brands a day trying to get our attention, we look at packaging and it's easy to try and fill up, there's so much print on this, you don't want an empty space. You're trying to squeeze an entire story into a bag of chips because you've got a good story to tell, and you want to stick it on the package. That's not the way to do it. You do it by making this an interface, so when the consumer scans this package, it takes them where you want them to go, so they can get you, they can follow your story, they can see your videos, they can find out where the product was being made.

Now with all that extra real estate you have here, that's a novel idea, sell it. You've got a brand this popular, offer some real estate on here. Let other people advertise on your package, all those kind of capabilities exist today. Just no one's using them, because packaging isn't exactly a brands strong point. You don't know the extent. Even the big legacy brands, they're not packaging engineering experts. They rely on their suppliers, and suppliers have also been consolidating and getting better. 13 companies represent 70% of the flexible packaging manufactured in North America. They do things a certain way, they want to keep doing them that way. So they're not going to bring rethinking how to make this package to be good, they're going to try to get you to go to... One of my favorite Peter Dryer quotes is, "To do something new, you have to stop doing something old." And we have an awful lot of stopping doing things old to do, to take advantage of this.

So if you think about print technology with rethinking the design of a package, these things are all sold, and you can do it at any scale you want. You can test smart them, you can go across the border with them. Now you have a direct dynamic relationship with your consumers because... And you don't even have to have very a to do it. You can do it with other technologies that literally you just take a picture of this and it takes you where you want it to go. And it already knows who you are because that software technology exists. You have 100% control over where you decide to put your product at. You got to think about the power of that. You have 100% control over that.

So do you want to put your products in something that you hope gets collected downstream or do you want to put it into something that no matter what happens, it's going to be safe for the environment because you can't control... So maybe even in a perfect world, you can't... Let's say it's recycling, you can't recycle what you can't collect.

So it's not about what goes to the landfill, our problem is that we're not getting it to the landfill. It's what inevitably escapes collection that's the problem. And I had an example for you, think about wrapper, look at how light that is. How many of wrappers do you think you would have to put on a scale to match the weight of a costume size recharger bottle, a lot of wrappers, and do you put just the main wrapper, or do you take the piece that tears off? Thinking about that for a second, how many packages do you open where it doesn't... That would stay on, generally, you're pulling your piece off. We designed it to do that and no one is bringing that up as an issue. So even if the main package ends up in a wastebasket, the other piece may not, and every little piece of that will not only harm may be your great, great-grandchildren, but its ultimate end state is to break down into even more dangerous micro. So we know we have a problem, just no one's offering a solution.

So a few solutions. One we... Earth digestible packaging. I'm not saying biodegradable, I'm not saying compostable, I'm saying earth digestible. What does that mean? That means that it's made from materials that are designed to be digested by microorganisms no matter where they go, they end up in a proper industrial compostable facility, fantastic. If they escape collection and end up on the side of the highway in a river, they will not last for 300 years, they will be digested, short of desert. There are microorganisms that exist everywhere. So at least you are putting your product is something that no matter what happens downstream you're not placing that burden on society, on the community, or on the consumer, because we cannot control human behavior, anyone that tried to probably learn that it doesn't work very well. How you get nine billion people to take recycling seriously?

Anyone who can answer that, it's a truffle, because you can't, simply can't. So this is what a compostable packaging does in a compostable facility, and it does this within 12 weeks via certification for compostable packaging, it doesn't do this. This is a Doritos bag, I wonder if you can see it, 1979, that bag has been floating in the ocean since 1979, looks pretty good, doesn't it? What's interesting is that was one year after we stopped using this to make bags because polymer probably is cheaper, it runs faster, and it made sense at the time. Now we're kind of rethinking that. Did that make the most sense? It's like we missed a very important design criteria when we were out making packaging so incredibly, insanely over-engineered that we just never thought about what we're this was going to happen and now we've got to figure out what to do about it.

It's interesting because you think about... So there's one brand, in particular, that's in the top, I'd say top 10 for a candy locally and then you are... They estimate 1.4 trillion packages just like this flexible packages are sold locally every year, 1.4 trillion is a really big number, that's a huge number. They run 2% of that. But if you were to weigh that 2% they wouldn't§ even register because it's all label packaging, yeah, they're on the top 10 brands found when you scan the beaches and the ocean, that's what you find. So they know that there's really no other option than this one.

So this is a picture of our display case in our office in Atlanta, and the point here is, yeah, our customers are doing it every day, it's growing very, very fast and when you look at this package versus this package, you can't tell the difference. In fact, on our table out there, that there is one package that isn't compostable and if you can find it, I guess you'll get a truffle, but there is the one that makes for fun. So I'd like to say, customers really can today, it's not like you're going back to paper, you're wrapping up and tying a string, you can actually get packaging today that lets you have your cake, but the earth can eat it too. You can get that today, it exists. So these are the takeaways that I... Because I want to make sure that you have time for questions, I always seem to run out of time for that. You can't sustain nine billion people without flexible packaging. Flexible packaging is the easiest to escape collection. We almost designed it to escape collection.

But if it continues to harm the environment for which we grow the food we put in that package, we won't need it. So maybe one of the future areas of investment are the tools and resources for subsistence farming because of that maybe where it goes, and we're just at the beginning of legislative moves, demands and, classics. We will not reverse our way out of this. I've got three, I've got a lot of, there's no way all the dog lovers in the world can you use to use all of this if, we were able to collect it, just impossible. So let's talk then about packaging as not a cost profits. When people ask, well, how much more is the flexible packaging? It's two, at least two times more expensive, maybe three. The way that the packaging is made today is part of that problem. So if you take the opportunity to rethink packaging, you can rethink the way that this is made, you don't need... Today, almost all of your packaging is bringing and take.

A film like this, not compostable like polyester and you print it in reverse image does that make sense? So you print it and then you glue it to all the other layers of film because, at the time, myself representing the plastics industry brought flexible packaging to brands, there was no solution to prevent that ink from rubbing and scratching its surface. So, that was the logical solution. We don't need to do that today. But the people who make this, that's the way they do it and that's the way they always want to do it and it's incredibly wasteful, and it starts with printing. It starts with printing, that would be like sending a job to FedEx and somebody jumps on the van, and goes to the paper mill and starts cutting out rectangular pieces of paper to take it back. It's really hard. Let's use a NASCAR, a car comes into the bit, everybody jumps unto. They have done everything they possibly can do short of having a car in front of them to do it to, packaging is no different.

If you premake the package, you separate graphics, you've got to separate packaging design or packaging artwork from the functional package. That functional package determines the properties that you need for the product. And let's talk about those properties for a minute because most brands don't actually know what they need, they only know what they're currently getting because packaging is so incredibly over-engineered. And then they'll say, well, I need to make sure I get a two-year shelf life. Think about this time last year, look at how much has changed in one year, why would anybody need a two-year shelf life on food product? We've got to stop thinking that way. You can't expect something to last. If the consumer doesn't consume it in a reasonable amount of time, then shame on them. We have to think smarter about what's the right protection for that product.

So there's work to be done to figure out what that is because no one really knows exactly what that is. But when you separate functional package, now I have my reuse of paper, that every time you get into a FedEx business office, you see this, different papers in the back. That's what they bought around your job. So now this is that bring your paper, you stick it into the printer, and you make flexible packaging. That can be done, and it is being done today, so now you are closer to two X, maybe better than two X, because you've rethought the way you can make it. Now that I've pushed printing downstream, I would say do it on the packaging line if you could, but now that we've pushed it downstream as a brand, you don't know what would be printed on top of products that are already behind schedule.

So by the time you tell your printer what you need, you're waiting, you're going to wait for it. Unless they have everything ready to go, all you need is the car, put the tires on, they can get it done much quicker with a heck of a lot less wait. Some of the bigger CPGs will write off 20% to 30% of their packaging spend every year, just the landfill. Because when you need it, something needed to change, but they just buy... They would rather spend it to landfill than worry about not having it enough.

So there's so much of waste in the process right now that we need to fix simply by changing how many, and now I can image on this any way that I want and I can change it. I can literally print something different every time I print it, and when I now get into digital printing with it. So let's say you're a brand and you make the same product, we'll say these truffles. This truffle comes in six different private label wrappers, typically to switch... You're not stopping the truffle, but you're stopping the mind to change the packaging.

With digital printing, you don't stop, you just print it one right after the other, you just keep running. So you keep packaging machines running and run as many private label runs as you want. All of those things become possible with digital, you can integrate anti-theft, anti-counterfeiting, fully traffic traceability. And now the digital interface side now, you can actually have a relationship with the person who bought your product if it's bought from retail. And now let's think about what else we can do with that? What if... So one of the other questions we get is with over 5,400 industrial compost centers in the United States? That's a lot. There's a lot of facilities that can take the food waste that goes landfill. If you take just what the wooden yard waste and food waste that's 50% of landfill, so 50% of the landfill is already compostable.

And packaging are also compostable. 70% of the landfill is compostable, so why don't we do this? Why don't we take this new design, digitally printed package and somewhere on here, as far as the consumer knows what they're doing, they're going to hit it with their phone, it's going to take them to a place where they simply validate their information, agree to it and just like that, you've got 50 million signatures telling the State of California to start subsidizing combos et cetera to take packaging? You can use packaging to bring truth to power because it takes people's voices to cause change to actually happen. How do you bring that many voices together, this, we have every day, we touch it every day, we throw it away every day. That's all level the purpose that it serves. It can do more, so don't worry about it being a cost center, it never has been.

Post 9/11, everybody focused on the supply chain, because the supply chain was the vulnerable point for terrorist activity. I think the time split into two, but everybody went into the supply chain as a necessary cost. It didn't matter what we got to do, and I don't think there's anyone today that would ever say, and how will you run your supply chain, is it a problem center? Packaging is no different, packaging is a problem center. It's not integral to your brand, it's essential to your brand. And if it's essential to your brand, why are you leaving all of these opportunities unused? Because no one's telling you this stuff. No one's giving you these ideas. No one's connecting these dots because you're just looking to find somebody that can make the bagging for you, and gave it to you in the timeframe.

We get it all the time, when we got three months of packaging, we're starting to get worried, it shouldn't be that way. There was a guy who keynote a few years ago that I'm happy to show, he was a CEO of a fit food company, and at first, this is a bunch of flexible packaging people remember, the first thing he said was, "The biggest problem with the flexible packaging industry is how incredibly inflexible it is." And it's absolutely true to the core. So if you're going to think about it differently, do you make these changes at the same time?

And if you've got a big brand if you don't know how to... Don't turn that ship, keep your ship sailing, go and create new ships and let them slowly grow. Don't try to steer a ship, you'll be able to talk about in the water. And something to do, we're trying to put it in all of our presentations. So this is sort of the BPI, Biodegradable Products Institute. So BPI is a certification body that would certify your packaging for you and post them all. Well, one of the things that we started picking up on last year is there's a lot of really passionate brands who really do care about this, but they don't know what to do, and it's sad to me to see so many brands getting together in little groups, they're trying to figure out a solution for packaging, well, we show them how to do that, we should be helping you do that. We should be buying you the solutions and we have those solutions you just don't even know we exist.

You haven't made the connection, because there's no industry organization around it, but the plastics industry is heavily organized, through multiple avenues with a lot of political power. So what we've done is we've turned BPI knowledge into sort of certification entity by a consortium, a place to get information on marketing, advocacy, education, technical research, all of the things that you need, and the cost to join us is $3,000 a year, no matter how big you are, how many plans you have, it's just a way to get you connected to the social media information that you see and understand. And with that, thank you.

I want to thank Kelly for coming on and all his help supporting you and our community. This is such an important topic that I am very much behind.

I’ll include links to Nature Flex in the show notes and on the podcast webpage. I’ll also include links to all packaging related content on the podcast webpage and in the show notes. You’ll want to check these out.

Today’s free guide is How To Get On More Store Shelves. This sill give you several key strategies you can use to get your brand on more store shelves and into the hands of more shoppers.

You can get it by going to brandsecretsandstrategies.com/session170.

Thanks you for listening and I look forward to seeing you in the next episode.

Nature Flex https://www.natureflex.com

Thanks again for joining us today. Make sure to stop over at brandsecretsandstrategies.com for the show notes along with more great brand building articles and resources. Check out my free course Turnkey Sales Story Strategies, your roadmap to success. You can find that on my website or at TurnkeySalesStoryStrategies.com/growsales. Please subscribe to the podcast, leave a review, and recommend it to your friends and colleagues.

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Until next time, this is Dan Lohman with Brand Secrets and Strategies where the focus is on empowering brands and raising the bar.