NEW PACKAGE SYSTEM PKG485-‐002, Team 9 Michigan State University November 25, 2013 Matthew Weal | Lai Saeteurn | Alexander Emerick | Brittany Eilers | Eric Larsen SUMMARY NEED FOR DEVELOPMENT City Girls Soap is currently using a pillow box carton that has recently raised concerns for its efficiency and size, therefore, resulting in redevelopment. The product is currently wrapped in parchment paper and packaged in an unbleached paperboard carton with three printed pressure-‐sensitive labels that are adhered to the front and back panels. Whole Foods Market of Ann Arbor has recently rejected shelving the oversized carton for reasons of being wasteful and the package’s inability to stand on store shelves. City Girls Soap is seeking out possible packaging solutions in order to improve the mentioned problems and to expand their range of retail outlets. The package design needs to be reevaluated to uphold the necessities brought on by an all-‐natural soap product and to meet the retailer’s shelving needs. The company’s top priority is to expand in size by introducing the product to new audiences, and this includes regaining the ability for the product to be shelved at Whole Foods of Ann Arbor. In order to penetrate this market, the packaging must meet a range of criteria that suffice both their shelf requirements and the product vision. These include containing the bar of soap using an eco-‐friendly look and eliminating unnecessary costs, using one back panel label instead of two, protecting the all-‐natural product from spoilage and environmental factors, optimizing shelf space while standing up-‐right for communication, and incorporating recyclability. 1 TABLE OF CONTENTS SUMMARY .................................................................................................................................................. 1 NEED FOR DEVELOPMENT ........................................................................................................................................... 1 TABLE OF CONTENTS ................................................................................................................................ 2 INTRODUCTION ......................................................................................................................................... 3 PROBLEM STATEMENT ................................................................................................................................................. 3 ALTERNATIVE IDEAS ................................................................................................................................. 4 BAMBOO WRAP ........................................................................................................................................................... 4 GIFT BOX ...................................................................................................................................................................... 4 PAPER WRAP ............................................................................................................................................................... 4 PLASTIC WRAP ............................................................................................................................................................. 4 EXFOLIATING POUCH ................................................................................................................................................... 5 EGG CARTON ................................................................................................................................................................ 5 MAGNET TOP ............................................................................................................................................................... 5 THE WINDOW BOX ...................................................................................................................................................... 5 TREE SLEEVE ................................................................................................................................................................. 6 THE ENVELOPE/SLEEVE ............................................................................................................................................... 6 HOW THE PACKAGE IDEA WORKS .......................................................................................................... 7 MATERIALS COMPOSITION ..................................................................................................................... 8 EVALUATION CRITERIA ................................................................................................................................................. 8 PRODUCT PROTECTION REQUIREMENTS .............................................................................................. 9 APPLICABLE REGULATIONS ................................................................................................................... 10 ENVIRONMENTAL CONSIDERATIONS .................................................................................................. 11 ISO 14040/44 ........................................................................................................................................................ 11 LOGISTICS CONSIDERATIONS ................................................................................................................ 16 SIZE, TYPE, AND TARGET SHARE OF MARKET ..................................................................................... 17 PROMOTION, ADVERTISING, PRINTING, AND SURFACE DESIGN SPECIFICATIONS ...................... 19 PRODUCTION LINE .................................................................................................................................. 20 QUALITY CONTROL PROGRAM ............................................................................................................. 22 CONCLUSION ........................................................................................................................................... 24 RECOMMENDATIONS ................................................................................................................................................ 24 REFERENCES ............................................................................................................................................. 25 APPENDIX ................................................................................................................................................. 27 ALTERNATIVE IDEAS .................................................................................................................................................. 27 NEW LABEL DESIGNS ................................................................................................................................................ 30 SPECIFICATION SHEETS .............................................................................................................................................. 37 FINANCIAL ................................................................................................................................................................. 42 2 INTRODUCTION PROBLEM STATEMENT City Girls Soap is currently manufacturing and packaging their homemade all-‐natural soap bars in-‐house. Presently, the paperboard package is oversized and appears ecologically irresponsible, as it does not appear as environmentally friendly as its counterparts. At this time, Whole Foods Market of Ann Arbor, Michigan has rejected to shelve City Girls Soap products until packaging improvements are made. As a small Michigan-‐based business, City Girls Soap has many limiting factors that may inhibit packaging redevelopment solutions. A major cause for concern is economics; the current budget is not flexible for more materials or unique packaging designs. Therefore, any creative packaging material ideas must be practical yet simplistic enough to be within the means of the company. In addition, the manufacturing process is an area to keep in mind. The company is manual labor-‐based, thus, the assembly line must be safe and simple for all workers. City Girls Soap’s top priority is to expand in size by introducing their product line to new audiences and retail outlets. This objective also includes meeting the needs as indicated by Whole Foods Market of Ann Arbor. Therefore, in order to meet these goals the new package design must meet a range of criteria which includes: 1. Cost; 2. Containment; 3. Marketability; 4. Recyclability; 5. Communication; 6. Ease of Use; 7. Protection. A design that is able to satisfy the above-‐mentioned conditions will be the most feasible and practical packaging design for City Girls Soap (Table 1). 3 ALTERNATIVE IDEAS The packaging team engineered, researched, and outlined various packaging options for City Girls Soap. The following ten options have been evaluated for their advantages and disadvantages: BAMBOO WRAP A bamboo-‐based wraparound will fully encase the product that may or may not be pre-‐
wrapped in a tissue or wax paper (Photo 5). The wraparound is heat-‐sealed and folded to provide a tamper evident seal around the soap because of a wax or polymer coating applied to the inside. It has a natural look and is made of paper-‐based materials that may be recycled. The package costs approximately $1.23 per unit. Disadvantages to using such a package include the inability to stand up on a shelf and the extra costs and risks associated with heat sealing (Mintel 2009). GIFT BOX A paperboard gift box design with a tabbed flap closure contains the product utilizing a premium look and feel (Photo 1). The design allows the customer to easily see and interact with the product. The square design will package to stand up with ease. In addition, the gift box has the option for high quality printing which is also a disadvantage, as it requires clay-‐coated virgin paperboard. The gift box design uses more material than other forms of packaging and unfortunately comes with a high price of $4.45 per unit (Mintel 2009). PAPER WRAP Similar to thick kraft butcher paper (with a waxed coating on one side), the wrap will protect the product using a single packaging material (Photo 6). The face visible to the customer may be printed on with black ink or pressure-‐sensitive labels may be used for enhanced printing and color. The paper may be taped or glued on the backside to hold the package together. This method of packaging may be the least expensive design at $0.00125 per unit. This low cost comes with the disadvantage of looking too low cost and uninteresting to new impressionable customers. There is no protection from shock damage with this design. The product will not be visible unless the packaging is tampered with. PLASTIC WRAP A plastic sheet is used to wrap the product after which glue or tape may be used to hold its form around the soap (Photo 2). This wrap allows printability on the face seen by the 4 consumer. Its major benefit is its lightness, limited single layer of packaging to function as containment, a communication medium, and its ease of use. Plastic wrap has a low cost of $0.52 per unit. There also may be difficulties in recycling this form of packaging, the consumer cannot view the product without opening the seal, and it does not provide shock protection of the product (Mintel 2009). EXFOLIATING POUCH This potential packaging solution is an exfoliating pouch that the plastic shrink-‐wrapped product is placed into (Photo 3). A paperboard sleeve is then placed around the pouch for communication purposes. The unique primary package not only provides containment but also serve an additional function of use. The sleeve is composed of biodegradable materials that can be easily and economically printed using lithography. This package promotes the environmentally friendly theme, however, it is not very rigid as it would be difficult to display on shelves and the materials are far too expensive (Mintel 2009). EGG CARTON One solution is a molded pulp container that is made from recycled paperboard (Photo 7). The package is relatively inexpensive with a price range between $0.3-‐$0.75 dollars. Some more advantages to this package are that it is eco-‐friendly, fully incases the product, and is stackable. Disadvantages to this packaging solution is the 1,000 minimum purchase order, delivery time can be up to thirty days, and lack of moisture and barrier properties. Other disadvantages include the design’s inability to close and the overall “egg carton” appearance (Mintel 2009). MAGNET TOP This package is a folding box that was one of the highest scored options on the decision chart (Photo 8). The fully recyclable paperboard makes the package stiff and a good structure for stacking and containment. Its matte-‐laminated paper surface provides a great surface for printing and marketability. The unique magnet-‐folding top sets the package apart from its competitors and has a reasonable price of $0.3-‐$0.4 per unit. Some possible concerns for this package are the minimum purchase order of 1,000 units, the delivery time of thirty days, and the inventory space for storage. THE WINDOW BOX This package utilizes a standard paperboard carton design for soap bars; however, to make this concept efficient a display window is centered on the front panel (Photo 9). The advantage of having a cutout feature allows consumers to see what the product is 5 prior to purchasing. The product’s aroma will be able to permeate through the window and increase its marketability. Also, the package is able to stand out amongst its competitors but the requirement for transparent plastic film to seal the window may be unattractive to environmentally conscious consumers (Mintel 2009). TREE SLEEVE This primary packaging solution is composed of tissue paper and a plain kraft paper sleeve (Photo 4). The product is first wrapped in tissue paper and then sleeved with the kraft paper in the opposite direction for containment. The sleeve has the appearance of tree bark, which promotes a natural and environmentally friendly feel. Both of the materials used are recyclable and cost effective. Unfortunately, this is not completely rigid and may not stand-‐up right. The package also has low compression strength and may be susceptible to damage such as crushing or tearing. The barrier properties of both materials are also poor (Mintel 2009). THE ENVELOPE/SLEEVE This design concept resembles an envelope where the product would be enclosed in an easy-‐to-‐open package made of recyclable paper (Photo 10). The main advantage of this packaging solution is simplicity; it’s easy to assemble and an easy packaging concept for consumers. The easy-‐to-‐open package features a top flap with a thin seal area lined with modified corn or potato starch, the concept is no different than opening a letter in the mail. Another advantage of this package is the contemporary look it can portray and its high printing capabilities, which reduces the need for two pressure-‐sensitive labels. The disadvantages of this packaging solution are potential fees for high quality printing and its lack of a display window. Therefore, these weaknesses could raise unnecessary material costs and cause consumers to consider competitive brands (Mintel 2009). Based upon the ten packaging criteria, the best solution for City Girls Soap is the Envelope design. The overall concept will be altered to improve its appearance, functionality, and strength. Therefore, a tear-‐off feature will be removed, a paperboard sleeve will be the main packaging material, and the product will be wrapped in the existing tissue paper. This packaging design is most feasible and practical as it is inexpensive and can be integrated into a manual-‐labor based packaging line. 6 HOW THE PACKAGE IDEA WORKS The product is first wrapped in parchment paper as it provides moisture barrier from oxygen and any environmental factors (CGS 2013). In addition, it allows the aroma of the soap to permeate through the packaging material so consumers can smell the product. This feature adds marketability and utility to the product package system. After the product is wrapped it will be placed in a paperboard carton sleeve. The sleeve is assembled around the product and held together with hot glue. The sleeve is designed to have an open top that adds a competitive advantage by allowing consumers to see and smell the handmade product. After the product is inserted into a sleeve, pressure sensitive labels are placed on the front display panel as well as the back panel. The labels are redesigned with a more contemporary font and graphics. The new labels provide communication by containing relevant information, brighter, and bolder illustrations. A shipper will also be used to help distribute larger purchase orders to wholesalers. The dimensions of the shippers are kept small to compensate for the small orders; therefore, each shipper will hold six units of finished goods. The specific design of the shipper features friction flaps which eliminates the use of glue or tape for closure. The shipper is essential for organization and containment through the supply chain process. 7 MATERIALS COMPOSITION EVALUATION CRITERIA Several criteria were used to determine potential packaging material for the sleeve. Sustainable packaging materials are important considerations to meet the needs of the environmentally conscious consumers of Whole Foods. Some other evaluation criteria included shelf presence, marketability, and price. Protection requirements for the product were kept minimal since goat milk soap is not sensitive to oxygen or carbon dioxide. In addition, distribution of City Girls Soap products to wholesalers is short distance so physical damage(s) or exposure to moisture can easily be controlled (CGS 2013). Overall, the main concerns for material selection were sustainability, cost, containment, and a slight moisture barrier. Based on the above criteria it was decided that paper based materials would be the best decision for City Girls Soap’s packaging solution. By using 100% recycled paper based material City Girls Soap can appeal to its target market an maximize its chances of gaining a larger share of the personal care product market. The parchment paper wrapping the soap is made of 100% recycled material. With a thickness of 0.001 inches, the material is easy to fold, inexpensive, and a practical solution to meeting the needs of the product and primary package (Appendix, Specification 2). Although plastic film provides greater protection and extension of shelf life, the product will not necessitate such conditions. The sleeve will be unbleached kraft paperboard as it is lightweight, inexpensive, and provides satisfactory protection requirements for the product. A hot glue gun will be used to secure and hold together the primary package. Hot glue is appropriate for this application because it provides a strong hold and the seal forms quickly. Also, considering City Girls Soap’s small manufacturing and packaging facility, hot glue provides flexibility and ease of use. By using hot glue the package maintains its simplicity with invisible yet secure bonds. The materials decided to make the shipper will be E-‐flute corrugated board, 42/26/42. This dimension was selected, as it is a light and thinner type of corrugated board that costs less then other sizes. Also, E-‐flute can be relied on to provide adequate strength to the primary packages without incurring any additional expenses. City Girls Soap owners have specifically requested to maintain supplier relations with their existing printing company, therefore, the labels will remain the same but feature updated graphics. The material used for the labels is paper-‐based and has a water-‐
resistant gloss coating to prevent smearing and image damage(s). 8 PRODUCT PROTECTION REQUIREMENTS Manufacturing homemade bar soaps may be perceived as an art where the artist combines carefully selected ingredients to produce a fragrant colorful soap that not only cleans, but also provides unique benefits. City Girls Soap products include natural ingredients such as oatmeal, oranges, or cucumbers and a variety of natural oils to provide texture, cosmetic benefits, and fragrance. These ingredients can go rancid when exposed to oxygen and water within the environment. Three factors to consider when protecting homemade soaps are shelf life, fragrance life, and moisture infiltration. A typical homemade bar of soap will have a shelf life of one year if packaged and stored properly. City Girls Soaps utilizes goats’ milk in the saponification process, which utilizes oils that do not uphold the shelf life as compared to other oils such as palm, lard, or coconut oils (Jasche Homemade Soaps 2010). Any of these oils are essential for soap creation as well as purity and texture integrity over the course of time. In addition, the soap’s fragrance will begin to lose its potency. Loss of both purity and fragrance is accelerated as compared to commercial soaps because the natural glycerin products formed in producing soap are not removed when homemade soaps are prepared. Glycerin undergoes oxidation degradation, along with the oils associated. The glycerin will also influence the soap to be more hygroscopic, or attract water. Soap becomes more solvent when water is added; this is how it is utilized as a cleaning agent. Since glycerin makes homemade soaps more hygroscopic than commercial soaps, they tend to sweat simply from being exposed to moisture in the surrounding atmosphere. The natural glycerin component is the proponent of City Girls Soap degradation. The correct packaging materials and storage environments must be considered when protecting these homemade solid soaps. The most effective method to preserve the product’s life and scent is to wrap them individually at the end of the first four weeks of curing to protect their surface from excessive scent evaporation (Soap-‐body-‐and-‐spa.com 2007). Soaps should also be stored as inventory by scent. Paper packaging will preserve scents cost effectively and more sustainably than plastic packaging. However, paper does not support equivalent moisture barriers, as do some plastic solutions. City Girls Soap must first package their product in a dry-‐wax tissue paper that is characteristic of having wet strength and moisture properties to increase the shelf life of the product. The wax will also aid in resisting oils from escaping the soap ensuring fragrance life be extended. The soap is then cradled into a kraft paper package that will ensure further protection of the product via minimal compression and shock protection. The kraft paper package will contain the product and aid in its stand-‐up nature while serving as a perfect location for pressure sensitive labels as communication mechanisms. Therefore, since the soap and its outer kraft paper package are sensitive to moisture, it is imperative the final products be inventoried, shipped, and displayed in cool, dry environments to ensure maximum lifespan and package integrity. 9 APPLICABLE REGULATIONS As with any product created and sold on today’s market there are many rules and regulations one must follow in order to acceptably introduce a product to the market – soap is no exception. In order to legally sell City Girls Soap products there are a few regulations that must be paid extra attention to. There are laws regarding labeling information, package design, and the overall definition of what soap is. All these laws must be complied with in order to legally put City Girls Soap on store shelves. In order for soap to be classified and packaged as “soap” it has to meet a few requirements set by the Food and Drug Administration. The FDA defines soap as the “bulk of the nonvolatile matter in the product consists of an alkali salt of fatty acids and the product's detergent properties are due to the alkali-‐fatty acid compounds.” Secondly, soap must be labeled, sold, and represented solely as soap (Cosmetics 2013). If the product meets all of these requirements then it is classified as soap and not a cosmetic product. Having this classification relieves the product of having to put much of the label information required for all other cosmetic products. The Fair Packaging & Labeling Act (FPLA) deals with basic rules and regulations regarding labels and the package. In compliance with the FPLA the soap must feature a principal display panel, or seen as the front panel of the package. On the front label the product’s name and category must clearly be defined. The net weight of the soap must also be indicated on the lower third of the label. In regards to the design created by the team, the front and back labels are in compliance with FPLA regulations. The ingredients, manufacturer, and distributors’ names and information are clearly displayed along with their business address. The package created for City Girls Soap is also considerate of other trademark and trade dress rules. The package being introduced is an original design and does not infringe on any Trade Dress regulations. The labels are in compliance with trademark rules and any designs, names, and/or symbols used on any part of the labels are of originality. 10 ENVIRONMENTAL CONSIDERATIONS ISO 14040/44 The Life Cycle Assessment (LCA) is a method of study that measures and compares the environmental impact of a product system over the period of its life cycle. This study involves data from energy consumption, raw materials used, and waste released into the environment (e.g. air, water, and soil). The data collected is calculated with a relevant functional unit and organized into a Life Cycle Inventory (LCI). The final calculations are illustrated on graphs to simulate potential environmental burdens the product system has on climate change, human health impact, resource depletion, and water consumption (ISO 1997). This specific analysis identifies the environmental effects of the pillow box packaging used by City Girls Soap. In addition, the data compares and contrasts key differences between the pillow box and the sleeve. Although the charts are not of absolute quantitative certainty, the values used for the study are close approximations. The LCA study holds the purpose of recognizing manufacturing and packaging areas City Girls Soap may consider improving in order to reduce their environmental footprint. I.
Methodology A. Goal of the Study (1) Analyze the life cycle of the pillow box in comparison to the sleeve; (2) Determine whether the pillow box or the sleeve is a more or less practical option for City Girls Soap; (3) Suggest potential packaging improvements to reduce any environmental impacts it has on earth. The life cycle assessment variant performed is cradle-‐to-‐grave, which involves material acquisition, distribution and packaging, and disposal by the end user. B. Functional Unit • The unit for this analysis is the packaging and distribution of 1,750 cubic inches of barred soap. This value is approximately equivalent to their monthly sales volume of two hundred units. C. System Boundaries (1) Geographic Boundary • The data representing the production and recycling of virgin unbleached paperboard carton is a production and recycling average for the United States only (Fuqua & McFaul 2013). (2) Time Boundary • Data collection from the company reflects their 2012-‐2013 fiscal year (CGS 2013); 11 Data collection in regards to the recycling rate of paper and paperboard material in the United States is based on the year 2012 (Fuqua & McFaul 2013). D. Assumptions and Limitations (1) Annual sales volume will be approximately 2,200 for fiscal year 2013 (average value provided by CGS 2013); (2) Residents of the United States may be purchasing this local Michigan product; (3) Residents of the United States may be recycling the packaging materials outside of the state of Michigan; (4) Secondary packaging was not studied with expectations that the retailers would always recycle the corrugated board. E. Data Quality (1) The data included in the material analysis was measured by the packaging team using (sensitivities included); • Analytical Scale, ±0.01g • Digital Micrometer, ±0.01mm (2) Company owners supplied other relevant data (e.g. sales volume, suppliers, prices) via e-‐mail. •
II.
III.
Pillow Box A. Specifications Studied of the Pillow Box (Table 2) B. Life Cycle of the Pillow Box (Figure 4) C. Outline of the Life Cycle of the Pillow Box (1) Raw Material Harvest Lumber is harvested and transported to the paper mill; (2) Paper Mill Operations Pulp is converted into paperboard, cut, and sent to the distributor; (3) Distributor ULINE sells the specific paperboard carton design to company; (4) Packaging Company uses the paperboard carton to package their handmade soaps; (5) Consumer Retailers carry the product for consumers to purchase; (6) Disposal/Recycling The carton is recycled to be re-‐processed at recycling facility/paper mill; (7) Landfill Percentage of the landfill is incinerated or left to decompose naturally. Sleeve A. Specifications Studied of the Sleeve (Table 2) 12 IV.
B. Life Cycle of the Sleeve (Figure 5) C. Outline of the Life Cycle of the Sleeve (1) Raw Material Harvest Lumber is harvested and transported to the paper mill; (2) Paper Mill Operations Pulp is converted into paperboard, cut, and sent to City Girls Soap; (3) Packaging City Girls Soap uses the paperboard carton to package their handmade soaps; (4) Consumer Whole Foods or other retailers carry the product for consumers to purchase; (5) Disposal/Recycling The carton is recycled to be re-‐processed at recycling facility/paper mill; (6) Landfill Percentage of the landfill is incinerated or left to decompose naturally. Scenarios Three different scenarios have been analyzed for both packaging concepts: FIGURE 1: REALISTIC LCA SCENARIO A. Percentages were determined based on the United States’ most recent recycling, incineration, and landfill rates of paper and paperboard material (EPA 2008) 13 FIGURE 2: OPTIMISTIC LCA SCENARIO B. Percentages were hypothesized to simulate if the United States heavily reuses or recycles paper and paperboard material. FIGURE 3: WORST CASE LCA SCENARIO C. Percentages were hypothesized to simulate a worst-‐case scenario possible for reuse or recycling rate of paper and paperboard material in the United States. V.
Results A. Pillow Box vs. Sleeve The simulated charts compare and contrast the environmental impacts the manufacturing, distribution, packaging, and disposal the pillow box and sleeve cartons have. Main impact categories analyzed are effects on ecosystem, eutrophication, greenhouse gas emissions, resources, and water depletion. The functional unit used for this study is 1,750 cubic inches of barred soap, which is equivalent to a monthly sales volume of two hundred units. Therefore, the individual charts discussed illustrate monthly environmental burdens and life cycles of the pillow Box and Sleeve. In addition, the previous scenarios were calculated, however, only Scenario #2 will be further discussed and evaluated as it best represents current incineration, landfill, and recycling rates in the United States. 14 According to Table 4 (see Appendix), it requires 1,965.69 MJ (mega joule) of energy to recycle and recover two hundred pillow boxes. In specifics, the mega joules required are equivalent to 546.025 kilowatt-‐hours and the average U.S. price for electricity is $0.012. Therefore, to recycle two hundred pillow boxes it would cost approximately $6.552; a value that does not include labor, material, water consumption, or any other overhead expenses potentially incurred by the recycling facility. In comparison, Table 5 (see Appendix) indicates that it requires 0.47251 MJ of energy to recycle and recover two hundred Sleeves. By following the same calculations as above, the amount of money required to re-‐process two hundred sleeves is $0.003, a significantly lower number and the cheaper alternative for environmental packaging. In Figure 6 (see Appendix) the chart illustrates that the manufacturing and conversion of two hundred pillow boxes produces a significantly higher amount of greenhouse gases than the Sleeve. A majority of the emissions derive from the manufacturing process in the paper mill, a facility that would require an aggressive amount of energy and water. Lastly, in Figure 7 (see Appendix) the chart indicates the impact the manufacturing and conversion process of paper and paperboard material has in regards to eutrophication, a process in which bodies of water receive excessive chemical nutrients causing extreme growth of algae. In order to produce two hundred pillow boxes, over 2.0 kilograms of phosphate is polluted into a nearby body of water. While on the other hand, to produce the same quantity of Sleeves it would add approximately 0.75 kilograms of phosphate. A majority of these phosphate deposits derive from the manufacturing site, the assumption can be made that the harvesting and processing of lumber leads to these figures. In summary, to recycle and re-‐process two hundred sleeves it would require less electricity and money. The greenhouse gas emissions from the manufacturing process are significantly lower than the pillow box and do less harm to nearby bodies of water. The overall processes to produce the current pillow box package are not as environmentally friendly as it would be for the Sleeve. Therefore, with this data it serves the purpose of illustrating the benefits and lack of benefits the pillow box has or may not have in comparison to the sleeve. 15 LOGISTICS CONSIDERATIONS City Girls Soap distributes their products by mail, from Internet and/or via phone orders, with the addition of supplying current retailers by vehicle. If Whole Foods Market of Ann Arbor makes purchase orders, City Girls Soap travels approximately 150 miles per month to supply the retailer by vehicle. The cost of self-‐distribution per mile is approximately $0.565. These estimates provide enough information to conclude that City Girls Soap self-‐distribution costs for supplying Whole Foods Markets estimates to $84.75 per month. The remaining logistics of the business are outsourced through FedEx. City Girls Soap utilizes FedEx Ground to ship anywhere in the contiguous United States. The United States is approximately 3,000 miles across its ultimate length and Michigan is within the Midwest region of the United States, therefore, it will be assumed shipping distances will remain in Zone 5 of the FedEx Ground US Rates that indicates a shipping cost of $7.49 (Fedex.com 2013). This rate is based on a 601-‐1,000 mile range for a two-‐
pound package. Each case that City Girls Soap produces containing six bars of soap at a net weight of 4 oz. each. These bars with the weight of the packaging materials will have a gross weight of up to two pounds. If City Girls Soap ships approximately 10 cases of soap per month it may cost them a total of $74.90 in outsourced, FedEx Ground shipments. Total logistics costs, both outsourced and shelf-‐distributed, may be up to ($84.75+ $74.90) $160.00 per month. 16 SIZE, TYPE, AND TARGET SHARE OF MARKET City Girls Soap products are available for purchase at many local organic market and other retail locations. Soap products are used by virtually every American consumer and have a moderately high rate of consumption per user in a given year. Of these consumers, City Girls soap will attract a prominent sub-‐category, the “well-‐beings”. A market sector that provides 23% of the Whole Foods customer base, the well-‐beings are not only health conscious, but also environmentally friendly (The Natural Marketing Institute 2006). According to the NMI, well-‐beings are defined as “driven to health by all means, including foods, supplements, other products and services. Strong preference for concepts that are natural and organic, with strong environmental linkages to value based opinion leaders.” City Girls Soap has an advantage in value due to the fact that their soap is made of natural ingredients such as goat’s milk. Targeting this specific market segment of consumers dedicated to well being will be proven beneficial to City Girls Soap and their potential capitalization of sales. Also, as a Michigan-‐based company, individuals of the well-‐beings market are big supporters of local businesses. Passionate Michiganders love their state and will go out of their way to buy local organic products. The emphasis of being environmentally friendly as well as cost effective are the two main strategies implemented on attracting the well-‐beings market segment. Consumer trends have been discovered and strategic analysis of a wealth of statistics about the attitudes and behaviors of consumers across the United States has been conducted. The psychographic segmentation of this market is based on ideology, values, beliefs, attitudes, and needs (Twede 2013). The class of buyers that will be the main focus of City Girls Soap’s target market segment is that of consumer’s lifestyle. Consumers that fit the typical profile of someone within our target segment are lifestyle-‐oriented in a sense that they are the thinkers. The thinker-‐type of American consumer is motivated by ideals. They are mature, satisfied, comfortable, and reflective people who value order, knowledge, and responsibility. They are typically made up of well-‐educated individuals that actively seek out information in the decision making process (Twede 2013). Also, thinkers are typically well informed about global and national events and are alert to opportunities to broaden their knowledge. Whole Foods customers are accustomed to paying a higher price for quality. Their purchases are shopping for a purpose – to help the environment and to eat the freshest foods possible. These consumers are people that make conscious decision about the products that they use and the perceived benefits that they are getting from their products. Another strategy implemented is smarter packaging and reducing costs. The goal is to find the balance between recycled material and cost. To get an estimate of how much packaging costs are yearly and multiply the number of users by number of packages purchased per year. According to Euromonitor International’s demographics, the bath 17 and shower product user population is around 348,831,000 (Figure 5) and each consumer purchases an average of 8.4 bars of soap per year (Figure 6). 348,831,000 for every 8.4 bars of soap per year equates to an estimate of 2,930,180,400 packages sold yearly. Each bar of soap retails at $7.00, which generates total potential revenue of $20,511,262,800. Within the well-‐beings target market, there may be a few consumers who believe spending $7.00 on a bar of soap is expensive. It is justified that the higher-‐
priced bar of soap is affordable since customers of the Whole Foods Markets are accustomed to the higher prices. City Girls Soap is committed to improving the quality of life and the well-‐beings market sector by following the same lifestyle. 18 PROMOTION, ADVERTISING, PRINTING, AND SURFACE DESIGN SPECIFICATIONS City Girls Soap will have a few promotional campaigns prior to launching the sleeve design. Proper promotion and advertising can help City Girls Soap come to the attention of brand new consumers who have never heard of the product or brand before. It will also help consumers who are already purchasing the product to understand the significant differences in its packaging. A properly advertised package can completely reposition a products place in the market and attract many new costumers. The first step in the promotion of the sleeve will be to bring attention to the changes. The best approach to reach to consumers is to allow people to notice the changes prior to putting up small store signs indicating such changes. The text on the signs will have the advantage of explaining the changes, more specifically, the exciting new positives because of it. This will not only keep the current consumers up-‐to-‐date with City Girls Soap but will also attract the attention of new consumers walking down the store aisle. There will also be new graphics on the labels (Photo 11 & 12). The original front and back labels of City Girls Soap are not very marketable. Changes were made on the graphics to feature large block letters and a smaller goat graphic. The back label has many changes as well; the original back label had very small printing and now features a larger font size as well as appearing more legible. The overall theme of the labels features green grass, which demonstrates to consumers that the package is eco-‐friendly, green, and represents the usage ingredients of goats’ milk. In addition, a UPC code was added to allow City Girls Soap to become a more contemporary company. The code will allow tech savvy consumers to instantly read more about the company and how the soaps were made. By integrating such changes, the labels and overall package will be more appealing, youthful, fun, and eco-‐friendly. 19 PRODUCTION LINE (see Figure 10) Production of homemade bar soaps is much more labor intensive than that of the packaging and shipping process. City Girls Soap’s production process is that of an in-‐
home, two personnel system where batch making is conducted within the kitchen of the establishment. The lye mixture and all oils are measured and heated via stovetop. When all ingredients have reached the proper temperature, the ingredients are combined and mixed until the compound comes to a trace. The remaining production line and inventory storage area will require a cool, dry room of approximately 200 ft2. City Girls Soap utilizes their establishment’s basement in this aspect. The molds are located in the basement, as well as three table stations, the cutting utensil, drying racks, material components and inventory storage. Once the mixture upon the stove is ready to be molded, it is transferred into the basement where it is molded on the molding table. Each of the three table stations within the operation are folding banquet tables with 72”x30”x29.5” dimensions at $69.99 per table as found at Staples (Staples.com 2013). The particular molds used by City Girls Soap are custom made to produce soap bars of 36”x 5”x 5” dimensions. Thirteen molds have been donated to City Girls Soap where each mold produces thirty-‐
two bars each. To begin the soap curing process, the molds are covered for 24 hours and placed on speed drying racks. Four drying racks, much like those used in the restaurant industry, are used to house the soaps and molds during the drying process. One rack unit can house all thirteen molds. Each unit can hold up to 640 bars of soap, is made of stainless steel for sanitary purposes, and costs approximately $199 as found on common restaurant equipment websites (The RD Store 2013). The molds are then uncovered for a full week. After the appropriate time has passed, the soap is released from the mold and returned to the drying racks. These racks allow the soap to dry, harden and ultimately cure for an additional week while exposed to an open environment. The next stage of production is to cut the bricks of soap into the expected bars. The large molded bars of soap are cut on the cutting table with a dough cutter. These tools may be found at the low price of $10.81 with 6”x3” dimensions. City Girls Soap utilizes one dough cutter for the entire cutting process indicating one personnel operates this station. The smaller bars are returned to the drying racks allowing them to cure for an additional four weeks. Total soap production takes approximately 43 days. This concludes the soap production process and leads into its storage process. To protect the soap, parchment paper is used to wrap the individual bars at the packaging and shipment table. The final products are stored in plastic bins by scent and housed on shelving units that occupy roughly 36 ft3. The shelving units may be hand crafted from lumber purchased at a home center. The cost of the lumber for one unit would cost approximately $100 dollars with the current cost of lumber 20 (Instructables.com 2013). The polypropylene bins containing the soap have a volume of fifteen quarts and are stackable. City Girls Soap uses approximately thirty bins to store their final products which may be found for $6.49 each from Target’s website (Target.com 2013). The same shelving unit containing final product will house the material components for the packaging and shipping processes that remain in their primary or shipping containers. Packing is relatively simple and takes place on the packaging table. The kraft-‐based paperboard packages are labeled with pressure sensitive labeling on the front face to display the City Girls Soap logo and back face to communicate ingredients, mission statement and other important information. The cured, pre-‐wrapped soap bars are slid into the labeled kraft packaging. Cases are designed to hold six individual bars of soap each with a different scent. The bars are organized into their cases and are ready for shipment via FedEx or to local retailers. 21 QUALITY CONTROL PROGRAM The manufacturing and packaging process for barred soap requires thorough quality control and quality assurance. The production of personal care products must be properly analyzed and documented to promote an efficient quality management system. Systems that emphasize quality standards are set to manufacture and package quality products, therefore, increasing City Girls Soaps potential to improve their annual sales volume, market share, and profit margins. A sampling will not be used for City Girls Soap, as the production rate is slow enough for worker(s) to frequently ensure the upmost quality of the soap manufacturing process. However, in order to guarantee that batches meet federal regulations and company standards, a set of procedures and guidelines are detailed for worker(s). Throughout the manufacturing and production processes, worker(s) are required to wear comfortable clothes, closed toe shoes to promote safety, and medium to long length hair must always be tied up. When handling hot equipment proper insulation gloves must be worn to avoid any burns and/or injuries. In addition, hands must be washed prior to each production and packaging process to ensure cleanliness. For the manufacturing process, the soap mixture must be cooked with clean hands and clean equipment (e.g. stove, pot, stirrer). Since the mixture is cooked in the kitchen it is crucial for worker(s) to avoid any cross contamination with food (e.g. crumbs) or any other debris from their daily meals. In order to maintain a sterilized environment the kitchen and cooking equipment must be cleaned with warm water and soap for every batch that is to be made. If the batches are of the same or different scent(s), workers must follow a standardized sterilization process to ensure cleanliness for proper and consistent execution. Prior to the molding process the basement floor must be clean and swept, tables must be clean and clutter-‐free, and the mold(s) must be clean and contain no excess soap from previous production. In addition, worker(s) must wash their hands and wear protective equipment (e.g. insulation gloves, apron, and closed toe shoes) prior to pouring the mixture into the mold. An inspection of the mold(s) and the mold cover(s) must be performed to ensure its cleanliness and to avoid any cross contamination of debris, scents, oils, and other possible odors. Once the molds are filled and set to dry, the drying racks must also be cleaned and properly labeled with dates and scents for appropriate storage. While the product is setting, the mold must be inspected every ten days to confirm that the soap is clean and properly setting. A pivotal aspect of the bar soap production is quality assurance and the verification that the batches are produced correctly. After the 22 forty-‐three day process, the molds can be removed to cut the soap bars. Any cutting and storage equipment must be sterilized and wiped down prior to cutting a new batch. Once each soap bar is cut the worker(s) must measure and weigh each product to determine if its specifications are within tolerances of four ounces. If the soap is oversized or overweight a failed batch must be created using a clean and labeled Tupperware container. The large soaps will either be cut again (at that very moment or at a later time). If the soap is undersize or underweight then the failed batch must be properly organized into a clean and labeled Tupperware container to be heated and re-‐
molded at a later date. For soap bars that do meet specifications, they must be wrapped in parchment paper and organized or stacked with proper labels. Prior to assembling the sleeve the worker(s) must carefully and accurately place the three labels on the sleeves. In regards to quality, the worker(s) need to ensure their work surface is clean so that the adhesive does not collect any particulate matter. Once the final primary package is assembled the last quality assurance checkpoint is inspecting the finished good to confirm that the overall package is glued and labeled properly, effectively contains the soap, and that no tears or damages are visible. In regards to storage, for on-‐hand inventory, each soap bar must be wrapped and stored in a clean Tupperware container with a label indicating the date made, scent, and worker(s) responsible in the manufacturing and packaging process. 23 CONCLUSION RECOMMENDATIONS City Girls Soap has used the pillow box design for multiple years. The ergonomic shape and unbleached kraft paperboard attracts new and existing customers to this company’s handmade and organic retail line of soap bars. This company has the potential to increase their annual sales volume and to obtain a larger portion of the personal care products market. Therefore, in order to grow this business, the manufacturing process and packaging must be reevaluated and/or redeveloped to recognize areas in need of improvement. If adequate adjustments are made then Whole Foods Market of Ann Arbor, a franchise of “the world’s largest retailer of natural and organic foods,” would be keener to carrying these organic soap bars (Whole Foods Market). Based on the marketing analysis, it indicates that local residents are more enthusiastic to support a homemade organic product. With consumers more aware of the chemicals and ingredients used in their daily products, local and naturally sourced personal care products will continually be a market of interest. Also, with the addition of eco-‐friendlier packaging, the organic shopper market will appeal to the overall product. In regards to finances, the current pillow box package is too wasteful and expensive, as it does not efficiently contain the true specifications of the soap bar. By having excess packaging material this drives up unnecessary material costs, and looks unappealing to retailers and consumers by appearing environmentally irresponsible. This negative image could easily be detrimental to customers of the Whole Foods Market or any organic shopper. Therefore, the packaging team has developed a new packaging concept to reduce material costs, improve production efficiency, and a standardized quality control. The team has recognized key areas for improvement and feels that the aforementioned recommendations will be a successful and profitable strategy. According to the LCA analysis, the sleeve design requires less paperboard material in comparison to the current pillow box package. The significant difference in material specifications will substantially improve material expenses and current margins. In addition, the cradle-‐to-‐grave study indicates that a monthly sales volume of two hundred pillow boxes has a higher negative impact on the environment in comparison to the sleeve. With this analysis it recognizes that the pillow box package for City Girls Soap products are costly, environmentally irresponsible, and inefficient. In summary, the solution outlined by the packaging team is to adopt the sleeve-‐
packaging concept. By choosing the more environmentally friendly package, it would result in material cost savings with an estimated profitability of approximately $8,000 by year five. The report recognizes areas for improvements and any suggestions made are solely to grow the business with high hopes that Whole Foods Market of Ann Arbor will proudly shelve personal care products made by City Girls Soap. 24 REFERENCES Aroma di L’Erbario. Aromatherapy Bar Soap. 2013. Web. <http://www.gnpd.com/sinatra/gnpd/hotlink/id=1092446> 2013. Beauty and Personal Care Market Size North America. Rep. N.p.: Euromonitor International, 2013. Passport GMID. Web. 04 Nov. 2013. The Body Shop. Radiance Boosting Sisal Cleanser. 2013. Web. <http://www.gnpd.com/sinatra/gnpd/hotlink/id=983305> 2013. FedEx. Standard List Rates by Service. 7 Jan. 2013. Web. <ftp://ftp.fedex.com/pub/us/rates/downloads/documents2/Ground.pdf> 2013. GREENBLUE. “What Goes Into the Landfill?” 2011. Web. <http://thepaperlifecycle.org/end-‐of-‐life/in-‐depth/what-‐goes-‐into-‐the-‐landfill/> 10 Nov. 2013. Health and Wellness Trends Database. Rep. no. 3123-‐15. N.p.: Natural Marketing Institute, 2006. Business, Marketing and Economics. Web. 04 Nov. 2013. HUOER. Recycled Soap Packaging. 2013. Web. <http://www.alibaba.com/product-‐
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Basemen/> 12 Nov. 2013. Jasche Homemade Soaps. "Tips to Make Your Soap Last Longer." N.p., Dec. 2010. Web. <http://www.jaschesoap.com/homemade-‐soap/cold-‐process/tips-‐to-‐make-‐your-‐
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customfield2=&filter_cf2=&psrelevance=name,desc>. 2013. 25 Tim Toggweiler, [email protected]." Message to Tim Toggweiler. 22 Nov. 2013. E-‐mail. Recycling Today. AF&PA Reports 2012 Paper Recovery Rates. 2012. Web. 13 Nov. 2013. <http://www.recyclingtoday.com/afandpa-‐2012-‐paper-‐recycling-‐statistics.aspx> Rubbermaid 15-‐qt. Latching Rev Purple. Target. N.p., 2013. Web. <http://www.target.com/p/rubbermaid-‐15-‐qt-‐latching-‐rev-‐purple/-‐/A-‐
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Tables/product_885757>. 24 Nov. 2013. Tweede, Diane. "Market Segmentation Through Packaging." Packaging 485 Lecture 6. Packaging Building, East Lansing. 16 Sept. 2013. Lecture. U.S. Food and Drug Administration. “Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?).” N.p., 3 July 2002. Web. <http://www.fda.gov/cosmetics/guidancecomplianceregulatoryinformation/ucm
074201.htm>. 4 Nov. 2013. 26 APPENDIX ALTERNATIVE IDEAS PHOTO 1: GIFT BOX PHOTO 2: PLASTIC WRAP PHOTO 3: EXFOLIATING POUCH 27 PHOTO 4: TREE SLEEVE PHOTO 5: BAMBOO WRAP PHOTO 6: PAPER WRAP 28 PHOTO 7: EGG CARTON PHOTO 8: MAGNET TOP PHOTO 9: WINDOW BOX 29 PHOTO 10: THE ENVELOPE NEW LABEL DESIGNS PHOTO 11: NEW CITY GIRLS SOAP FRONT LABEL PHOTO 12: NEW CITY GIRLS SOAP BACK LABEL
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