Disposable but indispensable

In today’s throwaway world, it can be easy to forget the importance of “waste not, want not.” Busy lifestyles and demanding schedules are often to blame.

But given the rising cost of food, many budget-minded consumers are making sure that little, if anything, goes to waste. Whether storing leftovers, holding freezer meals or wrapping lunches and snacks, today’s foil, wraps, bags and storage containers are proving that they are worth the investment. And private label remains a key player in this category. However, future growth will take some work on the part of retailers, namely creative merchandising, as well as innovative new products.

Big player

According to “Food Storage — US,” a February 2014 report from global market research firm Mintel, the overall food storage market grew 4 percent between 2008 and 2013. Used for storing food and meal ingredients, as well as for meal preparation needs, the category has some unique challenges impacting growth. For example, household penetration is already high — just about every household uses these products. And any potential for blockbuster growth also is limited by consumers’ budget-mindedness. In fact, the report states that most consumers stock up during promotions and often at specific times of the year.

That being said, private label is proving it is big competition for the name brands.

“Store brands have the No. 1 market share in food contact bags, representing 40 to 42 percent at margins that are so much higher than leading brands,” says Howard Kirschenbaum, vice president of sales for Armonk, N.Y.-based Trinity Plastics and vice chairman of the board of the New York-based Private Label Manufacturers Association.

The Mintel report also notes that many consumers do not notice many differences in quality between store brands and name brands in the food storage bag and aluminum foil categories; private label has a high market share as a result.

“The best-performing store brand food storage products are those that embrace change to be national brand equivalent or better,” Kirschenbaum explains. “We see more store brands upgrading their products to take advantage of trends or upgrades that have been around a while.”

Within plastic food storage containers, in particular, the “good/better/best” strategy is one trend that continues to shape the market, says Steve Greenspon, CEO of Honey-Can-Do International, Berkley, Ill.

“The ‘best’ is often a national brand,” he explains, “and within the ‘good’ and the ‘better’ [tiers], we’re seeing a lot of activity with private label.”

Safety also remains a hot topic and an important consideration for name brands and store brands.

“Certainly being BPA-free is going to continue to be a requirement in the category,” Greenspon adds. “Consumers are very concerned about safety within the category.”

Great innovations

Quality and product performance are at the forefront of success for this segment.

“When you provide national brand equivalency or better at a more attractive price, you are helping to build brand loyalty that pays long-term dividends,” says Fernando Valdez, marketing manager for Seguin, Texas-based Minigrip.

However, retailers also should remain on the lookout for opportunities to innovate across the different subcategories. The Mintel report calls on both name brands and private label to “continue to explore new product innovations and offer increased product functionality to get consumers to buy more.” Possible opportunities include incorporating sensory cues such as a tight-fitting seal or lid, or products that allow consumers to track and manage their stored food.

“With regard to food storage bags, we are seeing new features for the bag closures,” Kirschenbaum says. “A clicking sound as the bags are closing helps to make the consumer feel that freshness is sealed in the bag.”

On the high end of the category, vacuum storage is beginning to make an impact, according to Greenspon.

And when it comes to trash bags, store brands are getting a boost with upgraded performance attributes.

Trinity Plastics’ new Gen II Flextra trash bags contain more high-performance resins and offer puncture resistance that the company says is on par with that of the national brands. The trash bags are available unscented or with odor-neutralizing scents such as vanilla, lemon and lavender.

“More consumers than ever are purchasing high-performance flex trash bags with odor-neutralizing scents,” Kirschenbaum explains. “We want our store brands to capture more of this market with a product that is as competitive and performance-oriented as possible.”

Clever tactics

Being competitive does not stop with product innovation. Creative merchandising and promotional efforts are just as important.

“The national brands do a lot of advertising and provide promotional support,” Kirschenbaum explains. “It is hard for retailers not to take advantage of that, even though they are trading down gross margins. That is why it is important for store brands to build their ‘brand’ across all categories, for overall brand strength.”

Mid to late summer means back-to-school shopping for many consumers and is a no-brainer in terms of promotional timing. However, retailers should consider other times of the year and make sure they are following along with the national brands.

“For instance, retailers could promote their store brand trash bags as part of a spring cleaning cross-promotion with cleaning supplies,” Valdez says. Retailers could also “have lawn and leaf bags available in the garden section and so forth.”

And when it comes to packaging, by calling out features on products that closely align with the national brand, retailers would inform the customer that the store brand product is of equal or better quality, he adds.

Staying on-trend is critical for store brands to get an edge and maintain it. For example, higher-count packages of trash bags are becoming the norm on the national brand side. Retailers need to make sure they are following suit, or they risk losing customers to larger outlets.

“Every retailer is different,” Valdez explains, “and it is important that they clearly understand their customers’ pain points with respect to pricing and clearly define their up-count strategy prior to randomly launching increased product counts.”

Big picture

Store brand foil, wraps, bags, plastic containers and trash bags have weathered the recent economic storm well. And the forecast looks clear and bright. However, given the overlap between many of the subsegments in the category, robust growth might not be in the cards. But those retailers who actively merchandise their innovative products and cross-promote can expect to see this category outpace other general merchandise areas within their stores.

“People are very budget-conscious, and they want their food to last longer,” Greenspon says. “And I think that as people continue to discover that there are options to make their food last longer, they are going to continue to buy within the category.”