MAY 2016MARKET INSIGHTS

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PACKAGING

PACKAGING Brand Ambition

UPSCALE OVERHAULSimpson’s of Hawkhurst, an English manufacturer of handmade confectionaries, recently redesigned its Goupie brand packaging to maintain its proven appeal while

also “creating a striking new brand identity” that delivers strong shelf impact. Goupie confectionaries are Belgian chocolates made with fresh nuts, dried and candied fruits, and essential oils.2 Originally made in the company founder’s kitchen, packaging was kept simple for the initial target market of local farm shops; however, the company wanted a more upscale look better suited to delicatessens and London food halls.

Simpson’s of Hawkhurst worked with food-packaging specialist, Flip Flop Design, to create custom trapezoidal boxes with flexible, two-directional display possibilities for retail shelves. Graphics are contemporary and eye-catching, positioning the Goupie brand prominently. The updated packaging also provides important consumer information: complete allergen, ingredient, and nutritional data, along with individual product barcodes, social media, and website contact information. The fully recyclable box is also aligned with company sustainability commitments. A managing director for the

company stated that the packaging is “value engineered” to help improve retailer margins.3

GRAPHIC GOODNESSNew Zealand student Jeannie Burnside wanted to develop innovative packaging that served as a “catalyst” to inspire busy people to improve their eating habits. For that reason, Burnside created Meld, a new “meal system that consists of controlled portion sizes and organic whole foods, to cater to the needs of busy health-conscious consumers.” When five packages are melded together, consumers successfully create a healthy, balanced meal.

Developed to feature organic products, Meld’s packaging is minimal, with a triangular shape that represents the food pyramid. Labeling contains color-coded graphics that indicate single-serving portions and which nutritional needs a particular food serves. In response to research indicating that consumers are suspicious of conventional packaging symbols that suggest eco-friendliness, Burnside designed a clear packaging system and new graphic language to represent transparency, honesty, and “natural goodness” in the ingredients.4 Although Meld is still conceptual in nature, it represents an innovative, responsive packaging approach that meets the needs of today’s health-conscious, on-the-go consumer.

Unusual-shaped packaging is trending well this year, with prototypal triangular

shapes and trapezoidal packaging now appearing on stores shelves. Patterns

and geometric shapes are making their way onto labels, as well.1 Beyond

simply improving standout on shelves, in some cases, the unusual shape

serves to reinforce a meaningful change in brand positioning.

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ANALYTICS

DATA-DRIVEN Hospitality

CLEVER CONCIERGEIn March 2016, Hilton in McLean, Virginia, debuted its Watson-enabled robot named Connie to serve as a guest concierge. Designed by IBM, the robot uses Watson and

WayBlazer domain knowledge to provide guests with recommendations on where to eat, what local sites to visit, and how to navigate the hotel property. When a guest requests directions, the two-foot robot points in the appropriate direction or responds via voice. Connie’s eye colors also indicate “understanding, confusion, delight, and other human emotions.” In the future, Connie may be able to recognize guests’ faces, welcome elite members, provide language translations, and/or find information needed for meetings. The goals for adding Connie to the hotel staff include improved operational efficiency and a reduction in customer complaints stemming from waiting in line, as well as providing a “surprise and delight” factor to customers. Hotel officials have reiterated that Connie is not intended to reduce hotel staff; rather, it frees the staff up to provide excellent hospitality services to guests.6

BIG-DATA BENEFITSStarwood Hotels and Resorts debuted two robotic butlers named Botlr at its Aloft Cupertino Hotel property. Botlr’s role is to fulfill room-service requests.The robot can navigate the elevator by itself to deliver

room-service items to Aloft guests. Starwood’s efforts in data-driven hospitality go beyond guest services. The company also invests heavily in big data and analytics, focusing on analyzing local and global factors such as economy, weather, and current events to optimize its pricing. For example, by analyzing weather reports in key areas of North America, they can adjust prices for hotels in the sunny Caribbean or ramp up promotion efforts. Starwood’s analytics program has boosted average room revenue by nearly 5 percent.

Using IBM technology, the Denihan Hospitality Group merges transactional customer data and customer-feedback data, such as online reviews, to inform strategic decisions that improve the guest experience. As a result, rooms have been rearranged for business and leisure convenience, family rooms have more bathroom storage, and more rooms with kitchenettes are available. Frontline staff also use smartphone dashboards to alert them to specific guest preferences, including meals, concierge needs, and tourist-site interests.7

Hotels are increasingly using robot technology to serve guests in exciting and

innovative ways. The robots help improve operations behind the scenes, while

their human counterparts still play an “essential and emotion-laden interface

role” in providing superior guest service.5

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MARKETING

LEADING Through Loyalty

BREAKFAST BATTLEMcDonald’s recently announced a US-based loyalty program that could launch as early as the end of 2016. The program will build upon the company’s app that was released in 2015. The app, which tracks customer preferences and gives customers a free McCafé beverage after they purchase five, has already been downloaded 7.5 million times. The company’s move toward a loyalty program was chosen in part because of the heavy breakfast competition that McDonald’s faces from companies like Starbucks and Dunkin’ Donuts with their own successful loyalty programs.9 McDonald’s loyalty program may offer limited-time-only deals based on purchases, perhaps tied to how many times someone

visits each month. If a customer does not visit for a certain time period, favorite products may be offered as enticement to return.

SOCIALLY SAAVYTaco Bell debuted a new loyalty program, Taco Bell Explore, that rewards customers for app usage or “living mas” on social media channels, including Facebook, Twitter, and Instagram. Participants earn puzzle pieces that can be exchanged for rewards: a free Freeze, $100 gift cards, and more. Other prizes include a dedicated booth at their preferred restaurant location or a trip to Taco Bell’s headquarters in Irvine, California.

Loyal customers who link their social media platforms to the Explore app can earn surprise puzzle pieces as they post on social media. Because Taco Bell does not want to tell customers what to do, no specific hashtag

Loyalty means big business. More than three billion

loyalty-program memberships exist in the United States,

and 75 percent of US companies with loyalty programs generate

a positive ROI. In a recent survey, 83 percent of customers say that loyalty

programs cause them to keep doing business with companies, and returning

(loyal) customers spend 67 percent more than new ones.8

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MARKETING

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is required, and the restaurant does not need to be mentioned. In fact, posting a picture of a beautiful sunset may earn the customer puzzle pieces because the program’s algorithm will recognize a set of terms that indicate the person is “living mas.”

The puzzle that participants must ultimately put together starts simply, but becomes more intricate over time. Puzzle participants are ranked on a leaderboard, and online threads exist where participants discuss the puzzle game. Taco Bell app users spend approximately 30 percent more than nonmobile visitors, with 4.7 million people downloading the app between October 2014 and December 2015. If successful, the loyalty program may expand beyond app users in the future.10

COFFEE COMPLEXITYEffective in April 2016, the extremely popular Starbucks loyalty program, My Starbucks Rewards, underwent an overhaul. Approximately 6 million orders are placed through mobile devices monthly. Previously, customers earned one star each time they visited a Starbucks location; every time customers earned 12 stars, a free drink or food item was available. Now rebranded as Starbucks Rewards, customers will earn two stars for every dollar spent, obtaining a reward for every 125 stars. Stars can also be earned by participating in special offers, visiting a location on monthly Double-Star Day, and/or buying Starbucks products in stores.

The coffeehouse chain is making the loyalty-program change, in part, to shore up and grow their food business. Though frequent customers who purchase inexpensive items won’t benefit from the new reward structure, Starbucks officials note that this was a customer-requested change. With the old system, customers could spend $24 on $2 coffee purchases to get a reward. Earning a reward in the updated program now requires a customer to invest approximately $62.50. With more than 11.1 million people belonging to Starbucks’ current loyalty program, it remains to be seen how the new changes will impact overall performance.11

MUSICAL MARKETINGMarriott International’s rewards program, Marriott Rewards, is sponsoring the South by Southwest 2016 Music and Conference Festival (SXSW) as an outgrowth of its 2015 partnership with Universal Music Group (UMG). Centered in the JW Marriot Austin hotel during the festival, Marriott Rewards will host all UMG festival activities, which include daily musical showcases with festival performers. Other events include a pool party, yoga, and more, all available to Marriott Rewards members as well as hotel guests and SXSW badge holders. Rewards members who can’t attend the festival in person can watch performances through other channels: digital, social, and Marriott’s in-room channels. Interviews with artists and behind-scene footage will also be available digitally and on-demand at select hotel locations.12

RECYCLING

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FESTIVAL Recycling

LACKLUSTER RESULTSTo date, only 5 percent of festivals participate in an environmental certification program. Top priorities for festival organizers seeking certification include ensuring sustainable approaches to energy, standardized approaches to serve ware and packaging, the use of reusable cups, a standard approach to waste-management systems, and sustainable travel policies. However, despite ambitions of achieving 55 percent recycling rates at these events, actual results average less than 32 percent.13

POSITIVE PROGRESSThe New Zealand Packaging Forum states that its voluntary recycling programs have kept 50 tons of festival waste from landfills, with a 70 percent rate of recycling. Last year, the recycling rate for events funded by the forum averaged 65 percent. At a recent festival, the forum used new recycling bins made of soft plastic where festival attendees could recycle “chip packets, confectionery, ice cream wrap, bread bags, and any other plastic packaging that can be scrunched in a ball.” The forum’s strategies also include manned waste stations to encourage recycling behavior among festival attendees.14

INSPIRED ACTIONThe festival industry in the United Kingdom alone generates 20 kilotons of carbon dioxide equivalent each year when only considering onsite emissions; the number rises dramatically to 100 kilotons when including travel-related emissions from attendees. Fueled by the Paris climate talks held in 2015, Powerful Thinking, a UK-based think-do tank, developed and released The Show Must Go On report. A comprehensive summary of UK research and analysis on environmental issues associated with festivals, the report seeks to outline the impact of the festival industry in an accessible way, provide a foundation for an industry-wide conversation on how to reduce the environmental impacts of UK festivals, and promote action toward these goals. Perhaps the most significant impact of the organization’s report is the Festival Vision: 2025 Pledge, in which participating festival organizers commit to meeting a 50 percent reduction in greenhouse gas emissions by 2025, in alignment with the national target for the United Kingdom.15

Each year, a significant amount of waste is generated at festivals

and related events, creating a negative impact on the environment. Festival

waste also leads to added costs for cleanup and potential health risks. As

a result, savvy festival organizers are doing something to address the issue.

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SUSTAINABILITY

COCOA’S Sweet Progress

FARMERS FIRSTMondeléz International originally

created the Cocoa Life program to ensure a sustainable cocoa supply for its chocolate products. The company’s

goals were to invest $400 million to assist 200,000

local farmers in sustainably growing cocoa and to reach one

million people in the cocoa community by 2022. To achieve this, Cocoa Life formed

partnerships with farmers, governmental institutions, suppliers, and nongovernmental organizations.

Mondeléz recently released its first report on the significant impact of the Cocoa Life program on the cocoa supply chain. More than 76,700 farmers have been reached in nearly 800 communities in Ghana, Côte d’Ivoire, Indonesia, Dominican Republic, India, and Brazil—helping them incorporate sustainable farming practices. Today, 21 percent of Mondeléz cocoa comes from sustainable sources, and farmers partnering with Cocoa Life have seen their incomes triple since 2009. When compared to control groups, the result is a 49 percent higher increase in income. Participating farms are also seeing a 37 percent higher yield than control groups.17

CERTIFIED PROTECTIONThe Roundtable on Sustainable Palm Oil (RSPO) was founded in 2004 to develop standards for the production and distribution of sustainable palm oil. Barry Callebaut Group, a leading global supplier of high-quality chocolate and cocoa products, recently implemented the use of sustainable, RSPO-certified palm oil in its Crema dell’Artigiano and Tintoretto filling lines. RSPO-certified palm oil is the most rigorous and reliable certification available—physically segregating the 100 percent certified sustainable palm oil from other ingredients and ensuring full traceability through the supply chain. By making the switch in two of its most popular lines, Barry Callebaut serves as a leader in providing fully traceable solutions in its products. Two company goals were also met by making the switch to RSPO-certified palm oil: addressing increasing customer demand for traceable ingredients and providing support for sustainable agriculture in regions near the equator. The company has also published policies for sustainable sourcing for all its key ingredients.18

Even when simplified, the cocoa supply chain is an extensive network that

includes participants from local governments to international certification

organizations to multinational manufacturers. To achieve a more sustainable,

thriving cocoa industry, all the groups must collaborate effectively to prioritize

local farmer benefit over competitive advantage. Two global leaders in cocoa

purchases and chocolate manufacturing recently announced significant strides in

achieving more sustainable practices.

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www.havigs.com

Credits1Hampton-Smith, S. (2016, March 1). Five Biggest Packaging Design Trends for 2016, Creative Bloq. Retrieved from http://www.creativebloq.com2Corbin, T. (2016, March 10). Simpson’s of Hawkhurst Introduces Trapezoidal Box for Goupie, Packaging News. Retrieved from http://www.packagingnews.co.uk3Yu, D. (2016, March 15). Simpson’s of Hawkhurst Unveils New Packaging for Its Goupie Brand, Confectionary News. Retrieved from http://www.confectionarynews.com4TheDieline.com. (2015, September 25). Concepts We Wish Were Real, The Dieline. Retrieved from http://www.thedieline.com5Solomon, M. (2016, March 18). Technology Invades Hospitality Industry: Hilton Robot, Domino Delivery Droid, Ritz-Carlton Mystique, Forbes. Retrieved from http://www.forbes.com6Trejos, N. (2016, March 14). Introducing Connie, Hilton’s New Robot Concierge, USA Today. Retrieved from http://www.usatoday.com7Marr, B. (2016, January 26). How Big Data and Analytics Are Changing Hotels and the Hospitality Industry, Forbes. Retrieved from http://www.forbes.com8Jarski, V. (2016, January 26). The True Value of Customer Loyalty Programs (infographic), Marketing Profs. Retrieved from http://www.marketingprofs.com9Maze, J. (2016, March 9). McDonald’s Building Loyalty Program, Restaurant News. Retrieved from http://www.nrn.com10Jennings, L. (2015, December 15). Taco Bell Unveils Game-Focused Loyalty Program, Restaurant News. Retrieved from http://www.nrn.com

11Taylor, K. (2016, February 22). Customers Who Just Want a Cup of Coffee are Furious about Starbucks’ New Rewards Program, Business Insider. Retrieved from http://www.businessinsider.com12PRNewsWire.com. (2016, March 10). Marriott Rewards Announces Major Sponsorship of SXSW Music (press release), Marriott Rewards. Retrieved from http://www.prnewswire.com13Powerful-Thinking.com. (n.d.). The Show Must Go On (report), Powerful Thinking. Retrieved from http://www.powerful-thinking.org.uk14Messenger, B. (2016, February 11). Party Time for Packaging Recycling in New Zealand, Waste Management World. Retrieved from https://waste-management-world.com15Powerful-Thinking.com. (n.d.). The Show Must Go On (report), Powerful Thinking. Retrieved from http://www.powerful-thinking.org.uk16BarryCallebaut.com. (n.d.). Cocoa Sustainability, Barry Callebaut. Retrieved from https://www.barry-callebaut.com17GlobalNewsWire.com. (2016, February 23). Mondeléz International Reports Strong Progress in Cocoa Life Sustainability Program (press release), Mondeléz International. Retrieved from https://globalnewswire.com18Lindell, C. (2016, March 9). Barry Callebaut to Use Sustainable Palm Oil in Two Fillings, Candy Industry. Retrieved from http://www.candyindustry.com

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