Paths to Advantage no.6

Packaging. Packaging is often viewed as an innovation afterthought. The truth, however, is that new formulation is often easy to copy, whereas packaging innovation can leverage technology, emphasize unique brand characteristics, enhance the product experience, and in fact prove very difficult to duplicate.
Packaging innovation often requires major changes to the manufacturing process, which is a strong defense. An example is Campbell’s Soup at Hand microwave-safe containers, launched in 2002. Although their contents didn’t change, these easily heated, sip-able containers rapidly became one of the most successful new products in Campbell’s history. The package helped the company’s ready-to-serve soup lines grow 8 percent in Soup at Hand’s first year out and gave it a four-year head start on rival Progresso. This success even caused the company’s president, Douglas R. Conant, to redirect his strategy, saying, “We intend to make the C in Campbell synonymous with convenience.” Although the new product’s value proposition was convenience, the fact that it was neither easy nor cheap to copy helped drive its lasting success.
Another game changer was tuna packaged in the Flavor Fresh Pouch, an innovation introduced by Starkist (then a unit of Heinz) in 2000. This vacuum-sealed foil package shook up the tuna fish industry when it appeared because, for the first time, packaged tuna could be sold in groceries without a can. Although competitors have since introduced their own foil packaging, the convenience of this product continues to allow Starkist to charge a premium for it over tuna in cans.