Why Shouldn't Retailers Leave Private Label Product Packaging Specifications to Manufacturers?

25 August 2024

Private label products offer a significant competitive advantage for retailers. However, the success of these products is not solely dependent on product quality but is also closely related to the efficiency of packaging processes. Nevertheless, many retailers leave packaging standards to the discretion of manufacturers. This approach can lead to various disadvantages.

Manufacturers Focus on the Product, Not Packaging!

Manufacturers primarily focus on the quality and content of the products they produce. Research and development efforts in product development processes are generally aimed at improving the taste, quality, and shelf life of the product. However, this focus can lead packaging processes to take a backseat.

Insufficient Importance Given to Packaging R&D:

Manufacturers generally do not invest enough in R&D related to packaging processes. When packaging is not sufficiently valued as an area requiring innovation and research, retailers may lack efficiency and innovation in their packaging processes.

Neglect of Efficiency and Losses:

Efficiency and losses in packaging processes are not among the priorities of most manufacturers. Private label product owners should carefully examine the suitability of their distribution network warehouses and shelf systems and contribute to store layout strategies. This can lead to increased production costs and reduced profit margins for retailers. Additionally, losses in packaging can conflict with environmental sustainability goals.

Need for Differentiation from Leading Brands:

Retailers should develop packaging solutions that reflect their own identity and offer consumers a different experience, rather than imitating leading brands for their private label products. Cost advantages cannot be gained by imitating leading brands; this is limited to offering a similar product and weakens the retailer's competitiveness. Such an imitative approach can reinforce the perception that the brand is not innovative.

Quality Consistency:

Retailers must ensure consistency in the packaging design and quality of products sold under their own brands. Different manufacturers may adopt different packaging processes and standards. This can lead to quality inconsistencies among products on the same retailer's shelves and negatively impact the brand's overall image. 

Sustainability and the Environment:

Environmentally friendly packaging solutions are becoming increasingly important for retailers. However, manufacturers' failure to take sufficient initiative in this area can make it difficult for retailers to achieve their sustainability goals.

Cost Control:

Inefficiencies and losses in packaging processes can negatively impact retailers' profitability. Manufacturers' efforts to reduce packaging costs may be insufficient, resulting in additional costs for retailers.

In conclutioın, while leaving packaging specifications to manufacturers may seem like a practical solution in the short term, it can lead to significant disadvantages in the long term in terms of compatibility with their own shelf and storage systems, quality control, brand image, sustainability, cost control, and competitiveness. Therefore, it is crucial for retailers to closely monitor packaging processes, establish specific standards, and demand that manufacturers comply with these standards.

At Mat Packaging Solutions, we help retailers develop packaging for private label products with solutions that reflect their own identities and aim to increase our customers' competitive advantages.