Retailers’ clout in confectionery packaging decisions is mounting after consolidation in the retail sector, according to the editors of a National Confectioners’ Association publication.
“Retailers today are far larger than they were with consolidations and mergers and as such they are able to dictate a lot of the product that is coming into the market,” Teresa Tarantino, editor-in-chief of the National Confectioners’ Association publication Candy & Snack Today, told ConfectioneryNews.
“There are far more collaborative relationships between manufacturers and retailers as retailers look to differentiate themselves by working with manufacturers to develop specific products for their markets, their consumer and their philosophy of retail.”
Her colleague Steve Forster, executive editor of Candy & Snack Today, added that the trend was most prevalent for private label. He said some retail chains now had their own packaging operations and were the ones that called the shots on pack types.
Stand up packaging: the billboard effect
According to Tarantino, US retailers were increasingly favoring stand up packaging over more traditional peg or lay flat bags. A recent survey by the Association for Packaging and Processing Technologies (PMMI) identified stand up pouches as one of the fastest growing pack types in the sector.
“Lay flat bags really didn’t lend themselves to consumer appeal. With stand-up bags it’s almost as though you have a sales billboard effect,” said Tarantino.
Rise in contract packaging
But Forster warned that not all manufacturers or suppliers would be able to cater to a retailer’s demand and a contract packer may be called upon.
“Some candy and confectionery manufacturers find themselves in a position where their profit model doesn’t allow them to meet want the retailers would perhaps want.”
“In the US there are a number of competent contract packers who handle those specific jobs for manufacturers and suppliers who aren’t going to spend $1m on a line that might or might not be successful. The return on investment might be too long and too risky, so they’ll use a contract packer.”
Packaging for specific trade channels
He said rising confectionery dollar stores sales created ca greater need for contract packers as manufacturers strived to maintain low price point for their product.
“If you go into Dollar Tree for example there are smaller peg bags of M&M’s and you’ll only see them in that trade class and in that store – they’re not sold anyone else.”
“I’m sure Mars has its own bagging operation for those bags, but for somebody else they would probably have to source that out if they didn’t have a vertical form fill and seal machine that didn’t meet that bag size.”