Trends: Packaging the Low-Carb Craze

Low-carb diets are taking recognized brands in new directions as food marketers work to tie into America's latest diet craze as it redefines the way people eat.The most visible of those new directions is the appearance of "Carb Something" brands on grocery shelves. Unilever Bestfoods has executed one of the most all-encompassing approaches by addressing the low-carb trend with a new Carb Options brand, which launched in January 2004. In appealing to low-carb dieters, it relies on new package designs that modify the traditional marketing strategy of line extensions.Bestfoods' brands include Ragu spaghetti sauce, Skippy peanut butter, Wishbone salad dressing and Lawry's steak sauce. To take advantage of the new interest in low-carb diets, Bestfoods unveiled "low-carb" versions of these well-known products under the new Carb Options umbrella brand. Carb Options can be classified as a line extension because it clearly extends the heritage of traditional brands. Yet its package graphics position the brand as a new entry that covers more categories than the traditional brands.The brand's most prominent visual cue is the use of a blue background, which replaces the traditional color for each of the existing brands. Labels for Carb Options sauce, as an alternative to Ragu sauce, replace Ragu's traditional red and green with graphics dominated by blue. Similarly, the traditional graphics of Lawry's steak sauce give way to the blue of Carb Options steak sauce.Key points of the strategyWhile Bestfoods wasn't available to comment on its strategy, the approach is unique enough to raise several discussion points, most of which have an obvious upside:1. Carb Options becomes a "low-carb" brand that extends across categories, building consumer recognition at several locations in the supermarket (although at least one supermarket chain is merchandising the brand collectively in a kiosk of low-carb products, according to sources). Classic package design theory would argue that, by using the Carb Options graphics across categories, Bestfoods builds more brand recognition than if it had simply used a flag on existing labels to announce "reduced carbohydrates." And, by positioning Carb Options as a new brand, Bestfoods may gain additional facings on store shelves.2. The brand simplifies the burden of choosing the proper phrasing to use on existing labels to differentiate the items from traditional products. Making a label claim of a dietary or health benefit runs the risk of violating Food and Drug Administration regulations on dietary claims for food products. The Carb Options brand -- along with other "Carb Something" brands from other food manufacturers -- makes the connection without linking it to a dietary claim.3.The strategy allows Bestfoods to create a new brand with minimal package development, since the changes only involve color variations on labels and caps. (The Ragu cap goes from red and yellow to blue and white, for instance.) These changes can be executed easily on a packaging line, in comparison to using new shapes for containers. For the Lawry's label, Bestfoods opted for a flexo-printed shrink sleeve on the bottle. This approach allows shorter press runs for labels, providing greater flexibility for what may be a market-test scenario.4. The approach allows consumers to retain their connections with the traditional brands. On each new label, the original logo is printed in a lower corner -- becoming a secondary brand that "endorses" the Carb Options brand. Some might classify it as co-branding. By also using the package shape associated with the traditional brand, Bestfoods again trades on brand equity: the spaghetti sauce jar displays its obvious heritage with the Ragu brand. Shape cues tie closely with the emotional connection consumers have with a brand, and the Carb Options packages maintains those connections.One downside could be the potential for diminishing the equity of the traditional brands if the current low-carb craze ebbs. However, Bestfoods is facing sales erosion in several categories that consumers see as "high-carb" -- pasta sauce among them. Since brand equity might erode anyway, why not take an aggressive stance to protect it?Being 'Smart' with LabelsIn one way, the Carb Options branding strategy is conventional because it uses a color scheme to provide a clear delineation between the traditional "full-carb" brands and the new alternatives. Maintaining that kind of differentiation is well within the power of graphics. At least one other marketer who sells "full-carb" versus a "low-carb" brand sees color working quite well to differentiate the two lines.That company is Monterey Pasta, which launched a nine-SKU Carb Smart line in December 2003. With the exception of the color scheme, the same packaging is used for the company's regular product line and the "low-calorie" versions. Monterey uses a paperboard sleeve to cover trays of refrigerated pasta products. A deep blue color and distinctive graphics highlight the regular products. For its Carb Smart line, the company utilizes the same sleeves but a yellow-based color scheme. The brand name and other graphic violators further differentiate the "low-carb" varieties. "The sales numbers indicate no confusion on the part of the customer as to the different brands. The Carb Smart brand is doing quite well," says Kevin Kiper, marketing planning manager at Monterey Pasta.Waiting for FDA GuidanceThe labeling of reduced carbohydrate products requires consideration of Food and Drug Administration regulations on the health claims made for food products. In this case, there are additional complications because the agency has not yet developed any standards for "low carbohydrate" or "reduced carbohydrate" claims. In the absence of FDA standards, companies must use other signals to indicate product benefits, and package designers have more than one approach:Use of the phrase "Net Carbs," which is a term emphasized in the wildly popular Atkins Diet program. According to the Atkins philosophy, there are two kinds of carbohydrates: One group has a minimal effect on blood sugar and is found in such ingredients as fiber and sweeteners such as sucralose, sugar alcohols and malitol; the other includes ingredients such as fructose, lactose and glucose that should be avoided. So "Net Carbs" is total carbohydrates minus those from the first group -- the lower the net carb number, the better the product, according to the Atkins approach. Several labels carry a Net Carbs "seal," which displays the number of net carbohydrates in the center of a medallion. To the savvy carb dieter, this information flags the "bad carb" content of a product. Highlighting the Splenda brand name for products sweetened with this ingredient. Splenda is a sucralose product that, under the Atkins theory, has minimal effect on blood sugar. So using the Splenda logo on a label reinforces a "carb-healthy" positioning.Listing of total carbs on the label, if the number is low enough. This is also being done in the form of a label medallion.The brand name itself. Names such as Carb Options and Carb Smart position products in the "reduced carbohydrate" class without making a health claim that would trigger FDA action. The FDA has on its docket (No. 02P-0462) a "Petition for the Use of an Implied Nutrient Content Name in the Brand Name Carbolite." The petition involves Carbolite Foods of Evansville, IN. Among the considerations in the decision is the degree to which the brand name implies a nutritional benefit.The rapid rise of reduced-carb products is putting pressure on the FDA to define products in the category much like it has done with "light" foods and reduced-calories entries in the marketplace. Industry observers say the agency is currently involved in internal analysis of labeling requirements. Once it devises a way of quantifying low- and reduced-carbohydrate claims, expect the FDA to begin enforcing those rules on package labels. Therefore, marketers should allow flexibility in their label designs so they can adapt to such regulations when they arrive. Rapid Rise of the CategoryThe rise of low-carb products has been rapid, and quickly shoved "low-fat" from center stage in the diet category. In 1996-1997, low-fat SKUs accounted for nearly 40% of all new food product entries, according to Information Resources, Inc., Chicago. Now, low-fat products account for approximately 10% of new product introduction according to the sales tracking company.The breakout year came in 2003, when more than 600 reduced-carbohydrate products were introduced, according to Naples, NY-based Market Intelligence Service. That was up from 339 products in 2002 and 352 in 2001. Food marketers see the benefits of "low-carb" products, which often will allow for higher prices than comparable traditional products. For example, in one Chicago grocery store recently, a one-pound, 10-ounce jar of Carb Options Garden Style sauce sold for $2.80; the comparable Ragu jar sold for $1.68. Such price spreads are not uncommon.Jim Peters is a writer and consultant with 25 years in the packaging field. He is president of J. Peters Associates Inc. Click here for his contact information.

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