Cutting Down on Colors Could Save Unilever $26 Million

Millions Up for Grabs for Marketers Willing to Reduce Number of Tints in Packaging

 

By Jack Neff,  AdAge.com, Published: December 01, 2008

BATAVIA, Ohio (AdAge.com) -- Somewhere over the rainbow lies $5 billion in savings for the package-goods industry.

 

Using a color-harmonization program called Project Rainbow, Unilever is reducing the more than 100 hues it uses on its spreads and dressings packaging in Europe to six. Unilever's hope is to save tens or eventually even hundreds of millions of dollars a year. By some estimates, the entire industry could save $5 billion annually if it follows suit.

 

LFH, the branding and design group behind the switch, said the initial savings for Unilever in Europe amount to $13 million to $26 million. Graham Hawkins, production director of LFH, said other package-goods companies are expressing interest, and said savings from color reduction could be applied to other areas of marketing.

 

But will consumers notice the fewer colors?

 

"The jury's still out with some brand managers, some design managers, as to whether there's any sort of aesthetic cost," said Thomas Gilmore, director-brand strategy for the Cincinnati-based branding and design firm RGI, who has worked with marketers such as Procter & Gamble Co. and Kimberly-Clark Corp. "But it's certainly a trend you see, and it's on, I think, most every design manager's list of things to think about."

 

In the current economic climate, he said, it's becoming a far more attractive option, enough so that he believes even brands that do see a significant difference will consider it. "Brand managers see what else they can do with that money in their budgets," he said. "It's money that could be used for a website or an in-store promotion or any number of things."

 

Advancements in printing, which have added as many as four additional colors to the old four-color process, have helped make such moves possible, reducing the need for specialized or "spot" colors to get the right look -- or close to it.

 

There's even a potential environmental benefit. Mr. Gilmore, who founded the Sustainable CPG forum on LinkedIn, notes considerable reductions in waste from such consolidations. Cost savings and waste reduction come from buying inks on a greater scale, creating far less ink and packaging waste in the process of doing changeovers, and from producing final packaging because reduced complexity can improve quality and consistency, Mr. Hawkins said.

 

A few companies have adopted more-generic lineups of standardized colors, Mr. Hawkins said, but he believes quality suffers in comparison to the customized system Unilever adopted. LFH used a patented system by which it audits colors used by a marketer and then recommends a reduced palette that can achieve nearly the same look.

 

"Basically, eight out of 10 marketers couldn't tell the difference between their old packaging and the new packaging once we converted it," Mr. Hawkins said. The other two didn't see enough difference to justify the added cost for more inks, he said.

 

"The team was, quite frankly, blown away with the results," said Matthew Daniels, best-practices manager for the Unilever spreads and cooking business, in a statement. "No one could quite believe that such quality could be realized when using six colors."

 

But the approach isn't for everyone. Savings are much bigger for the largest, most diverse package-goods companies with the most complexity in their packaging lineups.