Some international brand packaging agencies are considering making Romania the head office for their other regional subsidiaries. The local brand packaging market is, however, only at the start, and with an estimated value of just EUR 2.5 million, experts say there is still room for growth. Current packaging trends see the market divided between international brands that maintain globally unique packaging and specifically Romanian products.
There are an estimated 10-12 packaging design players on the local market, of which only six are “specialized and dedicated” agencies, says Simona Straut, managing director of Cocoon Group Bucharest. To Straut, although the market has significant potential for growth, it will be years before it actually reaches its true value. “The packaging design market in Romanian is still at the beginning, not yet well developed, and there is still room for growth and for more professionalism. The issue remains the fact that professional local agencies are very few compared to the market needs. Plus, clients are still learning, they are working a lot with advertising agencies in this area or with freelancers.” As Straut added, in spite of the crisis and the current negativism, there is room for expansion for the agency – “we’d like to run other countries in the region from the Bucharest office”.
Pursuing a career in this area puts a lot of emphasis on professional background. “You need at least five-seven years of work experience to be considered a good packaging designer. This is a huge time investment from one person and few are willing to make it. You need passion, patience and knowledge to achieve this experience and that is why this job is not so glamorous for many people compared to other options from the creative industry, such as basic advertising,” adds Straut.
The costs of a package design project can start from EUR 8,000 and reach sums in the region of EUR 25,000, depending on the complexity, estimates Andreea Florea of Brandtailors. In terms of market value, Straut puts the current figure at around EUR 2.5 million. Florea says it is difficult to give an accurate estimate, but sees brand packaging as currently representing “35-40 percent of the local branding industry, which we estimated at about EUR 3.5 million for both 2009 and 2010.”
Local or global?
It is rare for international brands to adapt their packaging to the local market, experts say. “International brands that are imported tend to only apply the labeling law according to Romanian market specifics and local regulatory affairs. There are very few cases when the international brands that are sold in Romania make specific claims for the local market (e.g. ‘no preservatives’, ‘no added sugar’, etc.). The most common is to add ‘new’/ ‘nou’ on the pack in the local country’s language when it is a new product. As you can see by glancing at supermarket shelves, the international products usually have three-four languages on their packaging no matter where the production factory is located (Romania or elsewhere), but certainly, those are the languages from the region they are active in,” says Straut. She adds, “What should be locally specific is the strategy and brand positioning.”
Offering a regional perspective, Mick Cassel, brand development director at Cocoon Group, continues Straut’s idea. “In the case of international lifestyle brands, it is not in their long-term interest to accommodate localization because their very rationale is that they bring to each market international offers and lifestyles. So, only if there were something terribly wrong – for example if their brand name meant something rude in a certain language – would a change be necessary. Otherwise, it would be contrary to what they want to achieve.” As he adds, the use of an international language in a brand’s communication takes the targeted customer to a different place, another “brand world”.
However, not everyone agrees. “Brands must adapt to local customers’ tastes and likes, yet always need to be ahead of the market and reflect the international trend. Therefore there should be a mix of local and international elements, colors, look and feel, opening mechanism and materials,” argues Roland Kunst, owner of Die Kunstfabrik.
Irina Ilie, associate director at Brandient, has noticed an international trend of simplifying packaging, that is also visible in Romania. “From time to time, we can see local promotions featured on the packaging, but still respecting the (global) master design, thus keeping the unity and consistency of the brand. During the past two-three years we have noticed that international brands have been trying to simplify and unify their brand portfolio and packaging design around the globe, resulting in master designs that are similar in many countries.”
Paul Markovits, marketing director at Heineken Romania, offers the perspective of an international brand seeking to consolidate its position on the local market. “As compared to a local brand, for global brands the most important aspect is to be aligned and consistent everywhere. Any adaptation will be in line with what the consumers expect from the brand. For example, this year, the Heineken UEFA Champions League was adapted to reflect the fact that this year’s final was at Wembley Stadium in London, also known as The Temple of Football.”
The situation is, however, different for the domestic brands in the Heineken portfolio. “The packaging of these brands reflects the personality of the brand and, at the same time, responds to consumers’ requests. Some examples are: the ring -pull for the Ciuc Premium bottle, the shape of the PET packaging, the shape and colors of the bottles and the type and size of the pack are related to the key strategic channels that must fit with the key driver of beer consumption etc.” It is, in fact, these local brands that generate a significant part of the company’s profit. “During 2010, the volume of Heineken Romania was up 6 percent compared to 2009. The growth was especially driven by the Ciuc Premium and Bucegi brands and shows that the company’s strategy to permanently support and invest in its brands has brought results,” continues Markovits.
Nicoleta Eftimiu, senior marketing manager for Romania and Moldova in sparkling soft drinks at Coca-Cola Romania, an acknowledged leader in global branding, believes, however, that for her company the most important aspect is for “the package to reflect the brand identity. Evidently, the choice of type and dimensions for the package will be in accordance with the brand, the local needs of consumers, as well as the local regulations.” As a FMCG brand, Coca-Cola both locally and internationally prints its label information very visibly for consumers to be able to make informed decision about their daily diet.
All in all, “in the case of international brands, adapting the package design according to local specifics is not a matter of right or wrong – it depends very much on the brand characteristics and extension strategy. For example, Coca-Cola takes a more consistent global approach to package design, whereas the 7Up brand has different package design concepts in different markets. Generally, heritage brands or long established brands are more resistant to changing their package design, both over time and from one country to another, while younger or more modern brands are open to these types of changes,” concludes Florea.
Local trends in brand packaging
So what types of packaging catch the eye of the local consumer? Dan Pavel, creative director at Brandart, says, “Romanians are emotional and have a pronounced Latin character.
They respond positively to the new, but are not faithful to a certain brand. Quality is considered an ideal; it’s price that determines whether they choose to buy a product or not. Romanians enjoys trying many brands, and consider all of them of mediocre quality. (…) They readily combine a French perfume with second-hand clothes, or eat Romanian ‘mici’ with a side of Belgian beer. They are not that fond of labels, but do not hesitate to show off when given the opportunity.” Counterintuitively, Pavel adds, “Romanians put more value on a Romanian product of questionable quality, than on a sophisticated product.”
Liviu Stan, managing partner at paint producer Dufa, says that the best packaging in his field has some requirements. “In retail, packaging with light-colored labels that offer clear information on the use and quality of the product is the best. More importantly, the brand needs to be very visible. Well-done brand packaging can boost sales,” he adds.
Products on the local market also need to constantly reinvent themselves in order to keep up with the ever-changing trends.
Florea from Brandtailors argues, “There is no recipe regarding the right period of time after which a package design needs to be replaced – one solution can prove to be appropriate for more than ten years in a stable category, but another may need to be changed every two or three years in a constantly evolving market context. An interesting phenomenon that we sometimes witness is the change of a visual paradigm across entire categories – when a powerful global player or a daring challenger brand enters a market, it creates a domino effect and spreads change across the whole category. In these cases, it is very important that the established brands react to the change in terms of package design and keep up with the pace, because it is very difficult for a brand that is left behind to recover if it is not appropriately rejuvenated in due time.”
Pavel says he has observed that locally, international brands are losing ground to national ones. “Driving this trend is the public’s loss of faith in products whose marketing has nothing to do with Romanian consumer culture. Most of the time, the country’s major agencies translate the communication type from the Western world, without a true interest in Romanian psychology. The result is a decrease in the level of consumer confidence and sub-par sales.”