Don’t panic about shifts in fmcg sector

The decision by Elmwood to lay off eight people should not set too many alarm bells ringing. While redundancy is a harrowing process for all concerned, it is sometimes the only way to respond to changing markets or reshape a business, and doesn’t necessarily point up a significant downward trend. But the decision by the Leeds branding group does send signals that packaging and branding groups might do well to heed.

In Elmwood’s case there’s an element of both of these behind the staff trimming. The shift towards digital media within its mix is reflected in its plans for an imminent London opening – like many of its peers, it believes a brand has to be made to live across all platforms these days, and that the best solutions come when one design group oversees the strategy. A change of positioning often means dispensing with some staff and bringing in others with different skills.

But really it is changes on the client side that have prompted Elmwood’s reluctant move, and it is this that sounds a note of caution for others in the sector.

If, as Elmwood managing director Jonathan Sands maintains, price wars are forcing supermarkets to halt packaging redesigns or to institute a unified look across all their own-brand lines, the squeeze will come for designers in the fmcg market, in terms of both workload and fee-levels. But, what impact will this have on rosters?

If, as Sands observes, brands are also feeling the pinch, as retailers limit the number of products in any category on their shelves or as they disappear from the portfolios of brand-owning giants like Unilever, which are off-loading just about everything that isn’t a market leader, then that too is going to affect design.

Already some packaging and branding groups are aiming to broaden out, building on their expertise with branding, but trying to manifest it in other ways. Williams Murray Hamm’s in-store work for M&S to highlight “special” days like Mother’s Day is a move in that direction, as is Turner Duckworth’s on-line branding for Amazon.co.uk. Others, notably Nucleus, have pulled out altogether – in Nucleus’ case to focus on identity work and digital media.

Elmwood is addressing the situation in its own way, and though the process it is going through will be painful in the short term, it is right to act now while the business is so profitable – it ranked 71st in the Design Week 2000 Top 100 Consultancy Survey – with expansion in the offing. Its decision doesn’t necessarily herald a spate of redundancies in packaging businesses, but it should prompt those in the sector to think long and hard about their long-term goals.

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