The market

Clients buying packaging design vary from junior product managers, who are afraid to admit they are baffled about the whole discipline, to finance and managing directors, who view the role of designer as crucial to the success of their product. Many of the larger design groups are finding themselves being promoted to lead agencies, respected for their strategic skills and playing a role which is a far cry from one-off packaging projects.

But Richard Watson, director at client advisory group Global Design Register, is witnessing a polarisation of the crowded sector, and says key consultancies are prime targets for acquisitions by advertising and marketing groups. “We are beginning to polarise between strategic agencies working on big brands, and the rest, fuelled by an increase in mergers and acquisitions,” he says.

“There’s a realisation about what packaging design is not – it’s not about pretty pictures or communicating the advertising brief on a pack. Clients are thinking about it differently – there’s a lot more serious debate about what is going on with their brand,” says Jones Knowles Ritchie managing director Nir Wegrzyn.

“We’ve moved from being seen as packaging designers to more of a brand experience and we increasingly find ourselves in the role of lead agency as brand communicators,” claims Wickens Tutt Southgate client services director Mark Gandy.

There is also increasing call for consultancies to think globally and develop facilities for international projects. Some have already formed networks with designers overseas, but it’s unlikely there will be a return to the problems of the Eighties when design groups made mistakes with international offices.

Generally, clients have a high regard for UK consultancies and a Design Council report, published last year with the Design Business Association, shows UK groups are achieving more success in exporting packaging skills, particularly structural packaging, than traditionally strong areas like corporate identity and literature. But there is more work to be done to boost Britain’s reputation for packaging – a separate Design Council survey last year showed the UK ranked fourth for packaging capability, trailing after the US, Japan and Germany.

Own-brand seems to have moved on, leaving behind the controversy and legal wrangling over copycat packs. “Supermarkets are trying to do something on their own and to be true to their own brands,” Watson comments.

What clients want

Many clients still prefer operating formal or informal rosters, and nurturing long-term relationships with design groups while keeping a keen eye on fresh talent. But before allowing in any new blood, they usually need convincing of the strengths and skills a consultancy may claim to have. Brand managers are becoming pretty loyal to their consultancies – unless they want drastic changes they like to stick to the same names, and keep them if they move to a different company.

“People tend to use designers they know and trust and like to keep the same ones on board. You would certainly want them to have a level of knowledge about your consumer and marketplace,” says Robin Curtis, marketing manager, soft drinks at Coca-Cola-Schweppes. Carrie Swanson, portfolio development director, international customer group at Seagram, makes her choice based not only on recommendation, past work and creative strengths, but also “the ability to take my brief and an in-depth understanding of consumers and translate that in the right way”. Also crucial, she adds, is “the ability to understand the differences among consumers outside the UK”.

Stuart McFarlane, marketing manager for Boddingtons, which has worked with Jones Knowles Ritchie for eight years, says a good packaging consultancy should meet three criteria: “They should be open minded about options and give us three approaches, from a safe to a very stretching idea; always bring their designers and not their account handlers; and they need the history and knowledge of the brand.”

He adds: “They are leading edge, and we treat them as an extension of our department.

“We try to maintain partnerships with design agencies and use people who do consistently good work. We look for a real understanding of the brief, interpreting it to create packaging which is innovative and delivered on time. I rarely use pitches – it’s easier to give someone a brief and see how they work on it. I also look for good strategic skills and structural design skills,” says Sharon Gardener, international category manager of deserts at Unilever.

Lisa Davies-Evans, marketing director at Rizla, which uses Wickens Tutt Southgate, emphasises the need for a high level of drive and commitment from consultancies. “We are not interested in agencies which only offer short-term solutions, but in agencies which can offer a holistic approach and the commitment and energy to share and drive long-term vision.”

She adds: “Pack design strategy should enhance and support the brand’s positioning and structural design should not be divorced from this process.”

Julie Davidson, manager moulded blocks at Cadbury, pays attention to a consultancy’s approach. “To what extent are they prepared to be part of a bigger team? Often it’s not just about designing, so we look for agencies which are willing to work jointly with other types of agencies. We also need agencies which are able to manage the politics involved in selling different design routes for different markets. They have to be willing to listen and adapt designs to take on international issues.”

Ian Welsh, head of design at Safeway, describes how the in-house design team chooses consultancies: “The design team are all creatively trained and watch for aspiring talent. Selection is based not so much on creative work – there are many good design companies – but on how they think and articulate on design. I always visit the premises and meet a number of staff to get a feel for the atmosphere, assess back-up strengths in key departments and assess technical competence. We prefer companies with strong in-house artwork areas.”

At Halfords, which is within the Boots group, design direction is overseen by Pentagram partner John McConnell. “He acts as our stepping stone into the design world,” says Chris Forman, controller, business development at Halfords. “We operate a roster and know what we want to achieve. We look for agencies with certain areas of expertise and experience, and might combine packaging designers with product designers for some projects.”

Room for improvement

Forman believes there is still a need to educate clients about the value of design, in order to get the most out of client/designer relationships. “Not all clients are aware of the benefits of design. Junior product managers are often less experienced and so there can be an element of mystique. Clients would do well to understand how consultancies work and consultancies would do well to understand the strategic goals and objectives of the client. The process of managing design is very important and is aided by a mutual respect between consultancy and client and recognising each other’s strengths.”

Gardener says: “I like to work with people who keep relationships going over time. And there’s a need to keep continuity but provide freshness. They have to challenge and push us.”

According to Rizla’s Davies-Evans, “There is often a shortfall in terms of an agency’s ability to marry strategy with action. Getting the thinking right is paramount to implementing a successful strategy.”

The rise in demand for design groups that can offer a truly international perspective, though not necessarily an international network, is providing a challenge for consultancies. “The UK has some fabulous designers but they’re very particular to the UK. What I need is about being able to have the mindsets internally or externally that exist all around the world. It’s about getting under their skin and coming up with a grasp of how cultures can translate into a common mindset,” says Swanson. “There are many, many design agencies who work on pan-European and global projects but what’s needed is to do that without reducing it to the lowest common denominator.”

Curtis says keeping in control of a project is essential. “It’s a brand owner’s responsibility to drive designers hard to achieve what they want. If designers get too much of a free reign they can go off the brief.” Davidson, though, believes there is scope for consultancies to “push the boat out” with ideas: “I look for agencies that challenge how we can work with consumers to get the optimum design. Structural design and the way it is integrated is also a key issue some agencies could improve on.”

Despite the emphasis on strategic skills, Watson claims clients are “struggling to find serious creativity that doesn’t come with the baggage of an arrogant and precious agency”.

Fees

One client reports receiving quotes for a packaging project where figures varied by 300 per cent between the lowest and the highest. Clients do not expect or want to be faced with that amount of variation, nor to be faced with consultancies lopping off 50 per cent from their fees when told a quote is too high. It does little to instill confidence and damages the reputation of the industry.

According to Watson, however, the packaging design sector is still highly competitive and decisions are often price-driven. “There’s still a phenomenal over-supply of design agencies and some brand managers are behaving badly, being incredibly promiscuous and buying on price. I don’t think fees have moved much over the last five years, though there are some big fees for the premier league agencies.”

“I don’t think any client is happy with fee levels,” says Davidson. “Sometimes you do feel you get value for money – in some cases design ends up playing a crucial part in a brand’s success. In others, it’s a longer process and it can be more difficult to analyse the value of it.”

Brand and product managers are usually under pressure to justify investment in design at board level, and that inevitably puts pressure on fees. “Every element of the marketing mix is under scrutiny and the more cost effective we can be, the better. We would be prepared to listen to those smaller agencies who come up with ideas for free to get their foot in the door,” says Davidson.

“Fees are always agreed up front but any hidden extras or amendments are the most difficult to manage. There should be no surprises, but all too often on busy and complex projects, late requests for extra costs appear. It is in the interest of the consultancy to raise any extras at the earliest moment to avoid any bad feeling with the client later,” Welsh suggests.

“It’s extremely incumbent on the client to understand what they’re paying for. I see too many junior product managers paying for what they really don’t need to be paying for, or driving down fees to a level which is completely ridiculous. There is a lack of understanding,” says Swanson.

According to Boddington’s Stuart McFarlane, design is “immeasurable”. He believes JKR is great value for money and says: “You have to pay for quality.”

Trends

The market is likely to consolidate further with more mergers and acquisitions, along with the development of international networks or alliances with designers abroad. Mark Gandy at Wickens Tutt Southgate, points out that working on global projects means “pretty much around-the-clock availability, so we have seen growth in the use of the Internet. It has become a critical means of communication and can cut down on leads times. And for the end of a project, ISDN is invaluable.”

UK-based companies have been slower to switch on to the technological benefits, he says, and although WTS has been geared up with ISDN and the Net for some time, it is only now that clients are appreciating the benefits.

Where consultancies are finding themselves elevated to lead agencies, they are having to adopt new roles. “We’re working in a broader sense which doesn’t demote or jeopardise the role of design. From a creative point of view, it poses new challenges and responsibilities,” says Gandy.

Structural design will continue to be increasingly important skill for brand differentiation. “It’s becoming more important and you can’t separate it from packaging design,” says Wegrzyn. Likewise, rosters are still popular, and used more for international brands. But there are grumbles about the way rosters can be run, and they don’t work well if badly managed.

“There’s been a huge move towards design rosters. Generally they can be a bit secretive, which I don’t think is a good way of doing it,” says Nucleus director Lindsey Cunningham. Nucleus has worked with Superdrug to create a roster which could provide a model for good practice. Meetings between the client and all the design groups are held quarterly, everyone’s work is reviewed and no one is in the dark about who earns what.

As competition intensifies between supermarkets, there is more pressure for them to concentrate on their brands and consultancies in own-brand work are increasingly asked to take a strategic approach. “The copycat situation did create a reassessment of packaging by brand owners,” says Ray Gundersen, managing director at Butcher & Gundersen. “As a result, the supermarkets are treating own-label packs as a strong part of how they communicate to customers and trying to inject branded values.”