FEATURE - SPEED TO MARKET

The Marketplace Need for Speed

By Del Williams

Retailer demands, competition and sales opportunities now require lightning-fast speed in the marketplace. This pressure to deliver has lead to an innovative approach — a one-stop, vertically-integrated packaging model.

"Is Your Company Fast Enough?" asks a recent BusinessWeek magazine cover. "In everything from retail to medical devices, the time it takes to bring a product to market has been cut in half," adds a story callout. The need for speed, brought about by intense global competition enabled by Net technology, is not only forcing companies to get innovative about product development but also packaging.

In the cutthroat retail environment where even brand name manufacturers battle for shelf space, inability to provide required packaging can render millions sunk into R&D, production, and marketing useless—as product never makes it to retailer shelves.

Manufacturers are increasingly expected to maintain in-stock availability for mega retailers as high as 98% or more at all times despite supply line snafus, forecasting challenges, fads and other unpredictable elements. They must be fleet enough to respond instantly to retailer demands and competitive challenges; and ready to grab an opportunity when another supplier stumbles.

Yet they can't afford to tie up dollars in excess inventory. At stake are not only steep outage fines that can run in the tens of thousands of dollars, or the loss of prime store shelf space, but also the loss or gain of million dollar retail accounts.

Long a neglected aspect of speed-to-market, today expedited product packaging expertise is required to earn and retain a spot on retailers' shelves. Fortunately, a new one-stop vertically-integrated packaging model is proving to be the solution to an ever-increasing need for speed in the marketplace.

Before the end of last year's Christmas season for instance, SMI, a division of electronics giant Seiko Instruments USA Inc., (SIU) found itself in a bind. Unexpectedly strong sales at a mega retailer had raised the specter of stock outages of three watch products during this critical period.

"If the situation wasn't swiftly and seamlessly handled, large outage fines would be levied and an account worth several million in annual revenue would be in jeopardy," says Bob Bitner, Director of Distribution and Logistics at SIU. Long product and packaging lead times from Asia, along with customer specific requirements, complicated the matter.

To remedy the situation, previously packaged product in inventory had to be swiftly re-packaged in the mega retailer's unique configuration and returned to SIU within three weeks.

"The challenge was that re-packing the product in China was time and cost prohibitive, and here in the U.S. traditional contract packaging usually takes six to eight weeks," says Bitner. "On most new projects, the tooling set-up alone takes four weeks."

Responding to Retailer Demands
Bitner turned to custom packaging provider AVC Corp., a leading pioneer in the one-stop concept.

Because AVC, for instance, controls all aspects of packaging in-house at its Torrance, California facility—including design, production, graphics, tooling, inserts, media replication, even fulfillment—it can create a custom packaging solution with the speed required by today's ultra-fast market demands.

Using the one-stop concept, AVC can custom package a product and ship it in two weeks, compressing a typical eight-week process into two. They can also ramp up production fast. They once packaged and shipped almost four million Pokeman-related products in about four weeks. Since traditional packagers tend to outsource at least some processes, they're less able to expedite.

For manufacturers caught off-guard by sales anomalies or unexpected retailer demands, this expedited packaging expertise can help solidify retail accounts and tweak customer appeal even when inventory levels may be problematic.

"I supplied only the product and warranty card," says Bitner. "AVC determined the needed packaging, created the tooling, insert cards, call out tags, and even printed customer information and the bar code. Because they turned this around in three weeks, we were able to avoid stock outs and fines while maintaining a healthy relationship with the retailer."

Based on this success, SIU is looking at redesigning its supply chain with AVC as a partner. "The goal is speeding our supply chain by getting closer to our North American customers," says Bitner. "Today speed is everything. No matter what the anomaly, we need to be in stock and ready to respond to retailers' demands."

Standing Out from the Crowd—on Deadline
Speed can also be essential in designing packaging that will attract attention and drive sales in the competitive retail environment. In the run up to last year's Christmas season, for instance, Peter Vos noted a problem that put his company's ability to effectively merchandise at risk.

"Products will stagnate without a periodic new look, especially at warehouse clubs where customers look past the familiar to the new," says Vos, a Partner at Forrester and Vos, a national supplier of reading glasses based in Long Beach, Calif. "We were at risk of getting pushed aside by merchandise with a fresher look during the critical Christmas season."

Vos opted for a value-added packaging makeover, but had just three weeks to accomplish this to meet seasonal deadlines. Vos tapped AVC for design input. AVC hatched the concept of packaging four fashion-assorted reading glasses in an environmentally-friendly Reusable Retail Package (RRP) that opens like a book to store and protect the glasses indefinitely. AVC's patent on the RRP concept gave Vos added protection from copycats.

"I felt in my gut that this was the right concept," says Vos. AVC's "one stop" vertical integration expedited new packaging creation past the design and production bottlenecks that many packaging firms face due to outsourcing and not having the kind of control that AVC is able to exert with its in-house design capabilities. By the next day, AVC emailed Vos a 3D, rotatable e-drawing, viewable on his PC. As CAD design proceeded, insert printing and mock up creation occurred in parallel.

Maximizing Sales and Speed-to-Market
"In eight days we had a near-final look polyurethane mock up in buyers' hands, and in about three weeks we had the newly packaged product in buyers' hands," says Vos. "After repackaging, the same product at essentially the same packaging cost generated not only 25% higher sales at Sam's Club over the key Christmas season, but also has averaged 15% higher sales since then."

Vos credits the packaging specialist's quick, flexible turnaround for maximizing his company's retail sales. "If we were shipping packaged goods from China, we'd have to buy six months of product and ship it at four times the volume of bulk rate," says Vos. "Even worse, we'd be stuck with slow moving stock that doesn't match end customer buying patterns."

Instead, using warehouse club purchase data, Vos adjusts inventory to match actual customer demand. "We do a packaging run with AVC every few weeks to include the hottest selling styles while excluding the slow movers," says Vos. "We couldn't do that if we ordered long-lead, pre-packaged bulk goods from China. The speed and flexibility they've provided us is a strategic advantage in the retail marketplace."

In direct sales, speed to market also yields dividends. To jump-start sales, Hawaii-based Gilad Productions Ltd., producer of the fitness TV show Bodies in Motion, once scheduled advertising for a DVD/video program to air on ESPN before production had completed.

"Media duplication, kit assembly and delivery to the direct sales warehouse had to be completed in one week before the commercial would air," says Gilad Janklowicz, President of Gilad Productions. "Yet most duplication houses offer limited services and turnaround in three or four weeks. I didn't want the nightmare of coordinating among multiple parties, each with their own schedules and commitments."

Janklowicz turned to AVC, which offers complete media replication in addition to turnkey packaging, warehousing, and fulfillment services.

"I put in one purchase order and it was all finished," says Janklowicz. "Any issues were resolved with a single 5-minute phone call, and the packaged product was ready to ship within one week—in time for the scheduled commercial airing. On deadline, that's the kind of speed and flexibility you need to adjust to market conditions."

For more information about accelerated speed-to-market product packaging contact Guy Marom, AVC Corp. at 20550 S. Denker Ave.; Torrance, CA 90501; (310) 533-5811; fax 533-6077; or guy@avccorp.com or www.avccorp.com.

NEW DESIGN - (oops) wine

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Pearlfisher has created the label design for new wine brand '(oops)'. The name and market positioning of '(oops)' is derived from a true story based on the history of the Carmenere grape and Pearlfisher was tasked with making the label design as interesting and engaging as the story.

Following the migration of the Old World vineyards to the New World in the 1800's, the Carmenere grape was taken to and successfully grown in Chile. As Chilean Merlot became successful as a New World Wine it was discovered that the Carmenere grape had become mixed with the Merlot grape. The grapes were finally correctly identified, the 'big mistake' rectified and 'the lost grape of Bordeaux' rediscovered.

Lisa Simpson, Pearlfisher creative director, explains, "We wanted to take a more branded approach to wine and break the category mold by giving this new brand a more unique and ownable look to create more impact on-shelf. We decided that a newspaper was the best vehicle with which to sell the story and was both inviting and unpretentious. Therefore, the bottle is wrapped in one big label; one whole sheet of newspaper. '(oops)' becomes the headline and the 'Lost grape of Bordeaux' the sub-headline. We also decided to be playful and witty with the name and slanted the second 'O' in (oops) to reinforce the notion of mistake."

(oops) launched in 2006 regionally in 19 states and rolled out nationally in January, 2007. The same label is used across all four (oops) varietals (x 3 Red and x 1 White) but each varietal is given its own personality with a chatty descriptor, such as 'Cheeky Little Red', used to describe the flavor of the individual wine.

NEWS

J. Anthony Petrelli Joins CardPak Inc. as President and COO

CardPak Inc. announces that J. Anthony (Tony) Petrelli has joined the company as president and chief operating officer. Petrelli brings to CardPak more than 25 years of packaging industry experience. Throughout his career, he has excelled in the industry through a succession of increasingly responsible management roles with Packaging Corporation of America, Tenneco Packaging and Caraustar Industries Inc.

Most recently, he was vice president, marketing and business development of Caraustar Industries and was responsible for the company's marketing, product development and packaging services businesses, as well as the folding carton and composite can sales organizations. Mr. Petrelli holds a B.A. in Advertising from Texas Tech University and will be headquartered at the company's manufacturing plant in Solon, OH.

CardPak is an industry leader in custom engineered packaging designs and solutions for merchandising strategies that utilize carded packaging and specialty paperboard converting. The company offers a wide array of paperboard packaging products and formats that include blister cards, clamshell inserts, folding cartons, sleeves, skin board and specialty displays. The company has also developed numerous sustainable packaging concepts for source and material reductions, along with recyclability requirements, as dictated by the major retailers.