Food Packages' Dual Challenge: Inform and Sell

A hungry customer browsing the fresh food carousel is thinking several things: How long has that been in there? Does it contain XYZ ingredient? Would I rather buy ABC product from a different retailer?

This means vending operators have a lot to convey in a small space that should also entice. Once upon a time, consumers didn't expect as much. Competitive "to-go" food wasn't as prevalent. Vend food was a convenience people appreciated and they didn't give much thought to the packaging. The labels on these products were simple: the product name was on a sticker only slightly larger than a postage stamp.

This label is gone, said Larry Eils, NAMA's senior technical director, and anything like it is violating federal law. "I would guess 25 percent or less (of operators still use incorrect labeling) despite all the work we have done to get the word out," said Eils.

Labels are one of the most important pieces of today's fresh food packaging. It's the place to address nutritional concerns, safety concerns and merchandise effectively.

Labels produced in commissaries must list the product name, package weight, expiration date and company information — all in a certain size font. But that's not all.

Allergen must be declared
In addition, allergen information is currently required for the eight categories that account for more than 90 percent of all documented food allergies in the U.S. and represent the most severe or life-threatening reactions from food. Commissary owners must list milk, eggs, fish (which kind), crustacean (which kind), shellfish, tree nuts (which kind), peanuts, wheat, or soy beans. This information needs to be located in parenthesis in the ingredient list, or listed after the ingredients with the term, "contains."

Ensuring necessary information is on the label and readable is one thing and strategic placement is another. "We try not to have too big a label that it covers up the product," explained Rhonda Jensen, foodservice director at Stansfield Vending Inc. in La Crosse, Wis. "We look at each item and put a label on as best we can without covering the product."

Jensen also knows that customers are buying with their eyes. "The cost of packaging is almost more than the food," said Jensen. This is especially true for the containers Stansfield uses for its catering business.

And because fast food with appealing packaging is more prevalent today than ever before, consumers are more conditioned to buy professional looking packages.

One item that really helps with sales is co-branding. "We know that branding does affect some people," said Jensen. "They know the product, so they will buy the product."

Stansfield places the logos of certain well-known brand names on certain products. With great success, Jensen has used the Johnsonville brat logos on pressure-sensitive adhesive stickers.

On-machine merchandising
Jay Holstein, owner of Black Tie Vending Services Inc., in Baltimore, Md., uses stickers from his local Saval meats on the machine itself to avoid cluttering the package label with a logo. "I don't want to overpower the package," he said. He puts his food in clear containers, showcasing the product, and has a personalized label pre-printed with his logo at Met-Speed, after which he adds the other relevant information.

According to the recent consumer survey presented by NAMA, 69 percent of consumers sometimes or always use brand as a judgment when buying a product. Operators have an opportunity to increase sales based on both national and local brands, either with labels or with stickers.

Consider Label placement
Placement on the package is of the utmost importance, explained Craig Hesch, chief financial officer of A.H. Management Group Inc., Rolling Meadows, Ill. "Presentation is more than half the battle. There's a stigma that vending food is not the best," he said. "Packaging and presentation can help that."

A.H. Management Group analyzes how a consumer will look at the product to make sure the label is readable. "It's truth in advertising," Hesch said. The labels are enticing, colorful, positioned well on the product and readable at the angle consumers are viewing them; straight ahead instead of down.

Hesch prints his own labels in four-color, in-house. For small operators, the cost for in-house printing can be overwhelming, but Hesch values the flexibility it gives him. "We have better control over what we make,"
said Hesch.

Different varieties of food
What sets A.H. Management Group apart in Hesch's market is the private labels for his different ethnic style cuisines made by the commissary. The company makes Hispanic, Polish and other types of food, matching the product to the location's demographics.

"We try very hard; that's what gets the sale," explained Hesch. He is always looking for a better way to market his product, for it to stand out, but price is an obstacle. Currently, he also uses colored shelf-liners to add interest during the holidays.

Jim Adams, director of sales for Form Plastics Co., a package manufacturer, sees commissary food heading towards better-for-you products. "The trends in products continue to be healthy choices such as salads, light sandwiches, breakfast items, including whole grains and seasonal fruits," said Adams. "Containers that provide smaller (healthier) servings are in demand. We are seeing a definite surge in requests for eco-friendly packaging."

Biodegradable packages emerge
Form Plastics is among the first companies to offer 100 percent biodegradable packages with high quality graphics as well as an optional color-coordinated labeling system. These products have a higher selling price, but Adams said there has been an overwhelming amount of interest in biodegradable packages.

In the end, Adams said, "While we don't specifically deal with the labeling issue, we have found the old saying ‘people eat with their eyes first' to be true in the real world. Packaging with eye-appealing graphics helps sell the finished product."

Colors Sells
Full color and better quality labels are things Bob Reeder, from Met-Speed Label, has argued for while he's been assisting operators with pre-printing their food labels. And he sees more and more operators beginning to recognize the benefits.

"We do the eye catch, and they do the story," Reeder said. He's been working with companies to upgrade their labels, adding four colors.

Now companies are requesting separate labels for breakfasts, salads, sandwiches, etc., said Reeder, as opposed to years ago when the labels were one or two colors and the same on all food items. Operators are requesting better presentation, realizing that better marketing at the machine will help sales.

A side benefit to working with a company like Met-Speed is they have information about label requirements. "I do seminars on all this (legal requirements and food information on products), and on our Website, there is literature for review," he said.

Some customers use color label printers and do the whole label themselves, said Reeder. For average operators, the label cost is expensive to do in-house. But that's where the industry should go, according to Reeder.

In Reeder's view, the technology has to catch up to create a color printer that can keep up with automated preparation equipment. The ink jet is too slow to handle 60 to 80 sandwiches a minute on a conveyor.

Having a fast way to print labels would also make co-branding with national brand logos more efficient, Reeder said, since the logos wouldn't have to be printed on the label ahead of time or added later.

Marketing with colors
Color seems to be the new buzz surrounding fresh food. Jensen with Stansfield Vending uses colored wedges and packaging to draw attention to food, as well as colored labels. There are two types of labels used at Stansfield: a pinkish, reddish label for most products and a green label that signifies a "500 Club" item. The 500 Club is a healthy eating certification program based in La Crosse, Wis.

Marketing its food with colored labels, Holstein with Black Tie Vending is setting himself apart from other companies. "We personalize our sandwiches," explained Holstein, "It's name recognition."

Black Tie Vending uses two labels, one white and one green. The white label is for regular products, while the green one signifies "Right Choice," which contains less fat and sodium. Holstein understands that recognition, not necessarily sales, is what the labels achieve. "People look for a green label for the healthier choice," Holstein said.

Multiple labels
Randy Munn, director of sales and marketing for C.L. Swanson Corp., out of Madison, Wis., believes colors make a big difference to the consumer. Currently, C.L. Swanson has five different labels, including Classic Cuisines, "better for you," and Swanson's signature items.

Munn explained that using colored labels improves merchandising at the point of sale. The unique labels help customers identify the product they are looking for. For example, green and red signify better-for-you products while yellow and orange signify "Sunrise" breakfast labels.

Although sales didn't necessarily increase when C.L. Swanson used colors, the benefits are surfacing in the percentage of fresh food sales. Where the national average for fresh food is near 7 or 8 percent of all sales (according to NAMA), C.L. Swanson's is closer to 15 percent, Munn said.

"It's far more due to quality of product, but I think labeling and packaging are a contributing factor to that," he said. When Munn looks at other companies' vended food, he takes pride in the fact that his presents itself better. One packaging tip, Munn shared, is that most of the food is trayed in black containers, rather than white; it highlights food better.

Fresh Food: integral to vending
Munn's concept of fresh food isn't just another option to offer from his vending company. "It's on-premises foodservice for employees," Munn explained. "Vending is our way to get food to them." His intent is not to place a vending machine wherever he can, but to be part of the food program.

If the consumer believes it's a good quality food item, they will buy it, and along with it, the chips and soda. If confidence in the quality is lacking, then the consumer will bring in a food item from home, and most likely the soda and chips too, not bothering with the vending bank.
Vending is competing with fast food outlets, and more and more of the convenience stores that are offering fresh food.

In addition, all foodservice providers must address health and safety concerns caused by recent foodborne illness incidents.

At the time this article was being written, ConAgra Foods recalled two types of peanut butter due to possible Salmonella contamination.

Rules not strongly enforced
NAMA officials are aware of the fact that label regulations are not aggressively enforced.

However, there are other reasons operators should make sure labels meet requirements. If labels are sub par, the operator is not providing customers with adequate information.

"Everyone's looking at nutrition, especially allergen information," Eils said. "The NAMA survey reports nutritional information (labels) are read by 45 percent and ingredient statements are read by 39 percent of vending machine users."

The percentage of people who eat something and become ill from an allergic reaction to an undeclared food still remains small, but Eils warned that operators do not want this to happen to them.

Consumer groups are pushing for stricter allergen information, and watching for it. Many are trying to get the language standardized, said Eils.

Additionally, if an operator owns a commissary and someone gets a foodborne illness, the operator is going to get sued.

Eils is vehement that the technology has reached a point that what made that person sick can be traced back to the commissary where the product was made. "This is CSI at its best," said Eils.

Avoid Claims on packages
Claims like "fresh" or "healthy" should be avoided on packages, said Eils. Packages that make such claims must include additional information.

Operators can use the term, "better for you," without having to include additional information, Eils said, but this could change.

Requirements will help protect food from spoiling and hopefully warn people who are sensitive to certain ingestible items about the potential for allergic reaction, but it takes more than that to sell a fresh product.

Sixty-eight percent of consumers that browse a vending machine eventually decide to buy from the machine. A popular food, placed in a good looking package, with plenty of color, placed properly in a machine, will accentuate fresh food products, drawing buying eyes.