One of the high points in the development of Guyana’s manufacturing sector in recent years has been the emergence of a growing number of small and medium scale agro-processors whose products have secured increasing levels of consumer acceptance on the local market. In this regard, some local brands have made landmark inroads, taking pride of place on supermarket shelves which, up until recently, were almost entirely dominated by foreign brands. Food seasonings, jams and jellies, beverages and packaged spices have led the way.
However, entrepreneurial growth ambitions that extend to regional and international markets have had the effect of baring limitations in the local agro-processing sector which must be overcome if those external market ambitions are to be fully realised.
Recent agro-processing fairs and exhibitions staged by both government and the private sector have exposed the limitations in packaging and labelling which, as is widely accepted, can compromise the marketability of agro- produce otherwise considered to match imports in their substantive product quality. Contextually, what the emergence of the so-called ‘up market’ local food outlets and the attendant importation of packaged foods from developed countries (as well as some CARICOM territories) has done is to offer a yardstick with which to measure the standards that are expected of local agro-produce if they are to make an impact on the global market.
While there is currently no lack of awareness among local agro-processors of the importance of ‘stepping up’ packaging and labelling standards, what continued exposure to superior standards has done is to underscore the distance which the local agro processing sector still has to travel if it is to reach the desired standard.
The reality is that packaging and labelling go beyond protecting and identifying products by playing an indispensable role in image enhancement and consolidating a brand within a target market. Packaging and labelling determines the ‘visibility’ of a product which is indispensable for sales.
Packaging, apart from its containment and protection functions, plays a role in product promotion like nothing else can. Effective packaging also enables long term use, a critical consideration in an era of growing food safety concerns.
Simply put, labelling delivers a product’s ‘sales message.’ A label allows for explanations with regard to important considerations like ingredients (an important health-related consideration in product choice), volumes and preparation methods. Labels are also used for communicating brand goodwill messages to customers by showing them that you share their values. In addition labels help to fulfill legal obligations relating to the supply of nutritional information and expiry dates and the display of product codes.
Standout logos differentiate your product from those of your competitors, as can packaging shape and colour.
While creative packaging can play a role in attracting consumer attention, comfortable, practical packaging can play the same role. Packaging that is convenient for carrying may win over some consumers and difficult to open packaging can also impact negatively on sales. It helps, as well, if the packaging and labelling of each item in a product line matches the others in order to facilitate coordinated product promotion. In these circumstances, the other items in the product line are also likely to benefit from the exposure deriving from similar design characteristics and a recognisable logo.
Small and medium-sized Guyanese agro-processors have, for years, grappled with the issue of packaging and labelling, the most important challenge being the considerable costs which these add to the total investment in the product. Our experience of engaging local agro-processors, however, is that, over time, packaging and labelling considerations have not been significantly factored in to overall production costs. What has changed is the realisation on the part of local agro-processors of what is, these days, an inseparable link between product presentation and marketability.
The cost of packaging and labelling as a percentage of the overall selling price varies considerably. Figures seen by the Stabroek Business suggest that those costs can range from 1.4 per cent to 40 per cent, depending on the product. Some estimates suggest that around 9 per cent of the amount spent on any product is probably the cost of its packaging and labelling. However, given the contemporary enhanced importance placed on packaging and labelling as an element of customer appeal, it is felt that the figure could be appreciably higher.
Unfortunately for local agro-processors, the importance of packaging and labelling is not matched by the availability of affordable packaging at home. Investment in those sectors is limited to a handful of modest businesses and when, in most instances, the final product is matched against imported packaging, the comparisons invariably do not leave room for overwhelming optimism.
What also does not work to the advantage of small Guyanese agro-processors is the fact that with changes in the marketing environment including considerations of transportation and distribution, the role of packaging has undergone further change. In the absence of evolution in packaging, supermarkets and other outlets would be unable to handle, store and display the wide range of products that they offer. More than that, in the absence of effective packaging the volume of product waste is likely to rise considerably.
With the number of small and medium scale agro-processors increasing almost daily, the challenges associated with meeting packaging and labelling demands are becoming increasingly evident. While some manufacturers have worked hard and invested much in bringing their packaging and labelling up to a reasonably acceptably standard, a perusal of the outlets where local agro-produce is distributed still provides evidence of products that are some distance from reaching the required standard. Meanwhile, some local supermarkets, notably those considered to be the ‘high end’ ones are quibbling over what they say are the lower than expected packaging and labelling standards of local products which they are expected to have on their shelves.
While some local agencies like the state-run Guyana Marketing Corporation (GMC) provide advice and make recommendations with regard to packaging and labelling, for many small agro-processors, there is simply no way around the issue of affordability. Increasingly, local product displays like the 2018 UNCAPPED event serve to illustrate the gap between those agro-processors who are making a first of the packaging and labelling challenges and those who are still lagging behind. Our own investigations point to difficulties associated with cost and availability of technology. The cost of importing containers (mostly bottles) from distant sources of production (mostly China) has become prohibitive so that local manufacturers who have already ‘branded’ their products by identifying them with relatively costly bottling are constrained in their ability to produce volumes of product due to the high cost of the bottles (primarily though not exclusively) in which these products are presented for sale. The problem is that given ever rising international packaging standards there are few if any cheaper options.
There being no indication up to this time of a local readiness to make major investments in the technology and the skills necessary to significantly raise packaging and labelling standards, small and medium-sized agro- processors remain confronted with the dilemma of what, at this juncture, are mostly unreachable international marketing ambitions. Product quality and safety, as well as packaging and labelling considerations must be placed at the highest point on the local agro-processing agenda if the sector is to realise its ambitions.
