Private Labels: Less is More

Sustainability determines the packaging strategies for private labels in the drugstore and grocery trade. They follow the “design for recycling” principle and only want as much wrapping as necessary.

Great leaps in design and creativity, eager to stand out by doing something extraordinary, are hardly to be found in the packaging strategy of private labels (own brands) at present. The sustainability drive fueled by the Corona pandemic has produced a clear credo: “Less is more.” Whereby the less should nevertheless offer sufficient space to prominently display elements such as the Nutri-Score, the animal welfare label or disposal tips. And it should not be made of plastic, if possible.

Retailers have established firm guidelines that specify by what year all private label packaging should be sustainable. Aldi, for example, says it has ambitious packaging strategy targets in cooperation with its suppliers: by the end of 2022, all private label packaging should be recyclable; by the end of 2025, it also wants to use 30 percent less packaging material than in the base year 2015 and in relation to sales, and offer 40 percent of its fruit and vegetable assortment unpackaged.

The packaging industry has adapted to this trend and will continue to fine-tune sustainable packaging, because private labels have market power: for example, private labels account for around 40 percent of sales in German food retailing. In the Consumer Index 12/2020 by the market research institute GfK, which looked at the sales development of manufacturer brands versus private labels (excluding fresh produce), private labels topped manufacturer brands in three out of four market segments: for example, sales of private labels grew by 18 percent (manufacturer +17 percent) from 2019 to 2020 in full-range food retailing, by 14 percent (manufacturer +8 percent) in hypermarkets and by 5 percent (manufacturer +4 percent) in drugstores. Only in the discounters were the brands ahead, with a plus of 12 percent (private labels +5 percent). The private label drivers are the young: the older the customer, the more likely they are to reach for manufacturer brands. The fact that retail companies are showing ambition and rigor when it comes to packaging is also due to the fact that they bear the responsibility under packaging law. For other brands, this is borne by the product bottlers.

ALDI SÜD and ALDI NORD

Private labels account for around 90 percent of the product range at Aldi Süd and Nord. The aim is to create “a distinctive brand experience” for all target groups that takes consumer wishes into account. For example, as with other food retailers, the portfolio of organic products and vegan items has grown. Currently, Aldi is gradually aligning its northern and southern ranges in terms of content and appearance. For example, both companies have been labeling private labels with the Nutri-Score since March. The nutritional label can be found on the front of the packaging of private labels such as Sweet Valley, King’s Crown, and All Seasons. The seal, which is still relatively new, is part of an ongoing overhaul of private label packaging. “We are continuously examining the possibilities for further optimizing these in a meaningful way, particularly in terms of their recyclability – always taking into account product quality and food losses, of course,” says the company’s headquarters. In order to save packaging material, yogurt and spiced curd, for example, are offered without plastic lids. “By dispensing with the additional lid on yogurt pots and coffee drinks alone, we save around 290 tons of plastic every year,” Aldi recognizes. In addition, packaging is continuously being switched to recyclable alternatives.

EDEKA

Edeka is “continuously working to reduce its environmental footprint in product and transport packaging for its own brands,” say retail chain officials. Private labels account for about 25 percent of Edeka’s product range. In order to “responsibly design” their packaging, Edeka, in cooperation with the nature and environmental protection organization WWF, relies on the so-called “golden road”: the greatest concern is to avoid packaging. If this is not possible, it should be made from ecologically beneficial raw materials or designed to be recyclable, among other things. To this end, Edeka relies on packaging materials certified by the FSC seal, for example in the organic frozen food range: “For example, we check our packaging for efficient design, recyclability, the proportion of recycled materials, and the certified origin of renewable raw materials,” says Edeka. And customers are involved in recycling: for example, the cups of Edeka organic fruit yogurts consist of cardboard sleeves made of FSC-certified paper, a thin plastic cup and an aluminum lid, which can be disposed of separately and thus recycled.

According to Edeka, 95 percent of all private label sales packaging has already been converted to recycling material or FSC. PET water bottles have been reduced to the minimum weight technically possible by means of lightweighting, almost all fruit and vegetable products are sold unpacked (marked with labels or by lasermarking, the “natural branding”), Edeka restricts itself to aluminum lids for dairy product cups, and returnable cans are offered at the fresh food counters. However, the new vegan private label Vehappy proves that design plays a major role despite the focus on sustainability. The product line’s packaging is colorful, cheerful, and brightly colored. Also eye-catching are the brand’s own characters in the form of small, green plant leaves, which are intended to convey fun as well as embody the plant-based origin of the products.

REWE

By the end of 2030, the food retailer aims to avoid, reduce or make more environmentally friendly all private label packaging wherever possible. A large increase in packaging-free products can be found in Rewe’s fruit and vegetable departments: organic sweet potatoes are labeled using “natural branding” like at Edeka, organic bananas are sold without a plastic banderole, and cocktail tomatoes are in a cardboard tray without further repackaging. Cups for organic dairy products are made of separable plastic, FSC-certified cardboard sleeves, and aluminum lids. Since March and April, respectively, the plastic lids of the 500-gram pots of natural and soy yogurt by the private labels “ja!”and “Rewe Beste Wahl” brands have been history. Rewe sells reusable platinum-silicone lids as reusable closures. In order to save packaging material for Rewe organic juices, most of the packaging was changed from the ELO Diamond Curve to the ELO Sense Verpack. The plastic spout is smaller, which, according to Rewe, saves about 5,856 tons of packaging material per year.

SCHWARZ GROUP

Using as little of the most ecological and recyclable packaging as possible is also the Schwarz Group’s motto. It has proclaimed the “Reset Plastic” strategy; its Lidl and Kaufland brands naturally follow suit. Around 75 percent of Lidl’s product range is private label, while Kaufland’s percentage is lower. The “Reset plastic strategy” ranges “from avoidance to design, recycling, and disposal, all the way to innovation and education,” according to the Schwarz Group. This would reduce the use of plastic and close loops. Part of the strategy is the introduction of separation labels on packaging – because in a survey by the Schwarz Group, “80 percent of 1,000 respondents wanted easily accessible information on separating packaging – preferably directly on the product.” By 2025, the Schwarz Group’s own-brand packaging is to be maximally recyclable and the use of recyclates is to be increased to a maximum. When it comes to design, in addition to sustainable packaging design, the aim is “to inform customers as best as possible about precisely this topic. With tips on packaging optimization or correct recycling, we involve end consumers and their need for information in the topic of packaging design and facilitate conscious purchasing,” says the Schwarz Group. A style guide provides private label suppliers with concrete guidelines for packaging design, bundles requirements for resource conservation and recyclability, and gives “best practice” examples for packaging solutions. For example, the guide specifies that black plastics, dark colors for printing, or large labels made of a different material than the packaging underneath are to be avoided. Preference should be given to packaging made of a single plastic (monomaterials), transparent coloring and water-soluble adhesives. The reason: both black color and the use of mixed materials have a negative impact on recyclability, thereby increasing the chance that materials will fall out of the recycling loop. The packaging of Lidl’s own brand “Vemondo” for vegan products, launched in April 2021, is “100 percent climate neutral,” according to Lidl. The packaging industry is currently facing the challenge of providing retailers with minimalist and ecological packaging that nevertheless offers sufficient space for brand messages and transports the goods to the customer without damaging them.