Packaging is a vital element in driving business growth, as it influences brand awareness, sustainability, and secures partnerships with retailers.
CPG companies are constantly faced with the challenge of making their products stand out on crowded shelves.
Effective packaging design is not just the first impression of your product; it significantly impacts buying decisions. Whether you’re launching a new product or refreshing an existing one, crafting the right packaging design is critical to driving sales and brand recognition.
If you’re looking to succeed in the CPG market, nailing your CPG packaging strategy is non-negotiable.
This blog post will guide you through the essentials of CPG branding and packaging, outlining how strategic design can fuel business growth. We’ll also dive into the journey of Chiwis, a fruit chip company that used packaging and co-manufacturing as a strategy for scaling.
What Are Consumer Packaged Goods? (CPG)
Consumer packaged goods (CPG) include items people rely on frequently, such as food, beverages, cosmetics, and household products.
With high consumer demand, short product life cycles, and narrow profit margins, a strong CPG branding and packaging strategy is essential for success.
CPG Packaging: What’s Its Impact?
In a crowded market, presentation can be the key to capturing consumer attention. How a product is displayed can make all the difference in standing out or blending in within a saturated space.
For example, in the early stages of developing her packaging, Sarah Goodman, Founder and CEO of Chiwis, followed a piece of advice from one of her consultants that made a big impact.
She was urged to place her product on the shelves of stores she envisioned it being sold in, take pictures, and analyze every detail—from branding to shelf placement.
She tested different locations and stores, reviewing aspects she might have overlooked. This simple yet insightful exercise led her to rethink and redesign her packaging.
Sarah soon realized her original packaging wasn’t showcasing the high-value product she wanted her audience to experience, so she decided to pivot to the design you see today.
Here are some key ways in which effective packaging drives business success:
- First Impressions Matter: Packaging design is often a consumer’s first interaction with a product. A well-crafted design can attract shoppers at first glance, influencing their purchasing decision.
- Brand Differentiation: Unique packaging helps brands stand out. A distinct and memorable design reflects the brand’s values and appeals to target audiences.
- Functionality and Usability: Packaging that is not only attractive but also practical encourages customer loyalty. Think resealable bags or innovative containers that add convenience to the consumer experience.
- Sustainability: Packaging that reduces environmental impact resonates deeply with today’s conscious consumers. Brands that prioritize sustainable options—such as compostable materials and easily recyclable packaging—can build trust and enhance their reputation by aligning with their audience’s values. By choosing these alternatives, businesses demonstrate a commitment to environmental stewardship while meeting the expectations of their customers.
- Boosting Sales: The right CPG packaging strategy can directly lead to increased sales by improving shelf appeal and encouraging impulse purchases.
- Regulatory Compliance: Packaging must meet legal requirements and safety standards. Non-compliance can lead to costly recalls and damage to brand reputation.
- Supply Chain Efficiency: Optimized packaging can reduce waste, lower shipping costs, and improve shelf space utilization—ultimately impacting profitability.
- Certifications or Seals: These badges demonstrate a brand’s commitment to important values, standards, or practices like sustainability, ethical sourcing, and dietary considerations. Some recognizable logos you might find on your favorite products include B Corp Certification, 1% for the Planet, Certified Women-Owned, Plant-Based, and Gluten-Free.
CPG packaging goes beyond appearance and has a significant impact on a brand’s performance and growth.
CPG Branding Landscape
The CPG branding landscape is full of both opportunities and challenges.
With consumer preferences constantly shifting, brands must stay agile and innovative to keep pace. As sustainability, transparency, and authenticity grow in importance, companies that embrace these values in their branding are more likely to succeed.
Opportunities
- Emotional Connection: Consumers connect with brands on an emotional level. Effective branding creates a story and evokes positive emotions that resonate with your target audience.
- Building Loyalty: Strong branding builds brand loyalty, encouraging repeat purchases and advocacy.
- Premiumization: Premium branding allows you to command higher price points and position your product as a valuable addition to the consumer’s shopping basket.
Challenges
- Standing Out: Breaking through the noise and differentiating your brand within a crowded marketplace.
- Building Trust: CPG brands need to establish credibility and trust with consumers, especially in a world of information overload.
- Adapting to Change: Consumer preferences and market trends evolve rapidly. CPG brands need to be nimble and adaptable to maintain
Main Elements of Packaging Design
Effective CPG package design incorporates several key elements that work together to create a compelling and functional product presentation. While packaging is part of a broader CPG branding strategy, it plays an essential role in business growth. Below are five core elements of packaging design:
1. Brand Identity
- Brand Logo: Your logo is the most recognizable aspect of your brand and must be clearly displayed on the packaging to ensure immediate recognition.
- Brand Colors and Graphics: Consistent use of colors and visuals reinforces your brand image, creating an emotional connection with the consumer.
2. Product Information
- Labeling: Accurate and easy-to-read product information, including ingredients, usage instructions, and legal disclaimers, is essential for consumer trust and compliance with regulations.
3. Packaging Materials
- Sustainability: The choice of materials, especially eco-friendly options, is increasingly important as consumers look for brands that align with their environmental values.
- Durability: Packaging should protect the product during shipping and while on display, ensuring it reaches the consumer in optimal condition.
4. Functionality
- User Experience: Functional elements, such as resealable bags or easy-to-open containers, improve the overall customer experience and foster brand loyalty.
5. Visual Appeal
- Imagery and Design: Eye-catching imagery and design help the product stand out on crowded shelves, directly influencing the consumer’s purchasing decision.
Building Your Brand Beyond Packaging: Insights from Sarah Goodman, Founder of Chiwis
We’ve explored how impactful packaging design can be for CPG brands. But it’s crucial to understand that packaging is just one element of successful CPG branding.
A great example of the impact that CPG packaging design has in business growth is demonstrated by Chiwis, 100% natural packed fruit chips, that has been able to grow 3X consistently each year.
Learn more about Sarah’s journey with Chiwis in our podcast episode Mastering Growth & Profitability in CPG: Sarah Goodman’s Strategic Insights from Chiwis.
In this insightful interview, Sarah Goodman has strategically leveraged packaging to scale her brand, manage costs, and navigate the complexities of the CPG landscape.
1. Leveraging Packaging for Conscious Growth
Sarah’s keen emphasis on packaging design was a key factor in driving Chiwis’ growth strategy. Packaging became a focal point for building the brand’s identity and creating a distinctive presence in retail.
During her interview in Her CEO Journey Podcast, Sarah emphasized how much branding influenced Chiwis’ rapid growth. She recounts how her packaging evolved to a sophisticated branding that ultimately secured her product a spot in Costco Japan.
A pivotal moment came early on when a natural distribution company’s owner noticed her packaging design, stating: “Sarah, it’s evident you come from marketing and branding, because no one’s bags really look like this.” He added, “I’ve never seen a product like this before, like this kind of product. So, we’re just taking you on immediately.” This endorsement allowed Chiwis to gain distribution before even launching, a rare and significant milestone that further fueled its growth.
“Sarah, it’s evident you come from marketing and branding, because no one’s bags really look like this.”
By focusing on branding through her packaging, Sarah successfully differentiated Chiwis from other products on the shelf. The innovative packaging not only caught the eye of distributors but also appealed to consumers, making it a critical factor in Chiwis’ retail success.
CPG packaging should not only protect the product but also create an emotional connection with consumers. This connection can foster brand loyalty and drive repeat purchases. Chiwis emphasizes this point by showcasing the natural, healthy ingredients in her fruit chips through clean, colorful designs, she’s built a visual identity that resonates with health-conscious consumers.
Sarah’s decision to use upcycled fruit in Chiwis products is mirrored in her packaging choices. However, she highlights the challenges of aligning sustainable packaging solutions with business growth.
2. The Strategic Role of Co-Manufacturing and Packaging
One of the strategic decisions that contributed to Chiwis’ success was partnering with co-manufacturers rather than owning a production facility. This allowed Sarah to focus on critical areas like branding, marketing, and finance, while leaving production to trusted partners.
This decision also influenced Chiwis’ packaging strategy, as the flexibility of co-manufacturing gave her the ability to test different packaging designs and materials without being locked into expensive, large-scale production runs.
Co-manufacturing also played a significant role in helping Chiwis scale rapidly while maintaining consistent product quality. As Sarah mentioned on the Her CEO Journey podcast, working with a co-manufacturer during the pandemic helped the brand meet growing demand without the operational burdens of owning a facility.
This agile approach extended to packaging, where Chiwis could iterate on designs and materials based on market feedback and emerging sustainability trends.
3. Balancing Aesthetic Appeal and Cost Efficiency
While creating visually appealing packaging is crucial, so is managing the associated costs—particularly in the CPG industry, where margins can be slim. Sarah Goodman’s approach to Chiwis’ packaging design was not only focused on aesthetics but also on cost management and long-term profitability.
For example, despite the popularity of their mango chip line, Sarah made the tough decision to discontinue it due to its high production costs and slim margins. This data-driven decision underscores the importance of aligning product offerings—and their packaging—with profitability goals.
Similarly, Sarah’s keen understanding of cash flow management is evident in her strategic decisions around packaging materials. Partnering with large retailers like Costco or WholeFoods required Chiwis to be mindful of extended payment cycles, which could have impacted cash flow. By selecting packaging solutions that aligned with her financial strategy, Sarah ensured that Chiwis maintained profitability while scaling operations.
In sum, Sarah Goodman’s approach to conscious business growth in the CPG industry is rooted in data-driven decision-making and a deep understanding of financial management. Throughout her journey with Chiwis, she has placed a strong emphasis on managing margins and costs, ensuring that every business decision aligns with long-term profitability.
4. Sustainability and Packaging Innovation
Sustainability is a growing concern for both consumers and retailers, making it a key consideration in CPG packaging design. Sustainable packaging not only enhances brand reputation but also meets the increasing demand for eco-friendly products.
Chiwis has been at the forefront of sustainable packaging discussions. In a Chiwis’ blog post, Sarah discussed the challenges of finding genuinely recyclable or biodegradable packaging options. Many so-called “sustainable” packaging materials fail to live up to their promises, either ending up in landfills or contributing to microplastic pollution.
This lack of truly recyclable options led Chiwis to explore alternative solutions, such as compostable materials, though even these come with challenges related to cost, minimum order quantities, and shelf-life limitations.
Sarah’s commitment to sustainability is a reflection of her brand’s mission to reduce environmental impact while delivering high-quality, delicious snacks. However, she emphasizes that achieving true sustainability in packaging will require industry-wide advances in technology and infrastructure, as well as more affordable solutions for small businesses.
5. The Importance of Packaging in Retail Partnerships
For CPG brands, landing partnerships with major retailers is a critical step toward scaling.
However, these partnerships often come with stringent requirements for packaging. Retailers are mandating that their suppliers meet specific sustainability standards, particularly around recyclability and compostability.
Chiwis’ ability to navigate these requirements while maintaining its brand identity is a testament to Sarah’s strategic foresight. Her decision to work closely with packaging suppliers and co-manufacturers ensured that Chiwis could meet retailer demands without compromising on design or sustainability goals.
In addition, Chiwis’ packaging played a crucial role in securing shelf space in high-traffic retailers. The brand’s visually distinctive packaging helped attract customers and communicate the product’s health benefits and natural ingredients—a key factor in driving sales in the competitive snack aisle.
Final Thoughts
In the CPG industry, packaging is a critical element of a brand’s growth strategy. It influences consumer perception, supports brand differentiation, and can even determine a brand’s success in securing major retail partnerships.
As Sarah Goodman’s journey with Chiwis demonstrates, successful packaging design is not just about aesthetics; it’s about making data-driven decisions, managing costs, and aligning with broader business goals, such as sustainability and profitability.
As CPG brands look to the future, staying ahead of packaging trends—while balancing cost, environmental impact, and consumer demand—will be key to long-term success. For Chiwis, this means continually innovating their packaging while keeping financial performance and brand growth top of mind.
