Brand equity is invaluable. While of course working to provide high-quality products that deliver on a promise, brand owners also must focus on the constant quest to build a brand in the marketplace. They do so by making positive impressions and satisfying consumers again and again. But in a contract manufacturing or packaging relationship, how does a brand owner truly protect a brand when so much of its development is outsourced? There are some imperative actions that can ensure brand protection, branding experts say. And when brand owners and contract manufacturers are on the same proverbial page, the strength is not only in protecting but also building brands.

Communication is Key

It should be the mantra for this industry which is so centered on partnerships — communication is key. In protecting brand equity, first a contract partner must know and understand the brand and its mission, and this is only accomplished through direct communication.

“If formalized brand standards or guidelines exist, they need to be woven into the contractual agreements,” says Phil Federspiel, principal and chief executive officer of Group 4 Inc., an Avon, Conn.-based agency. “If standards are in development, care needs to be taken that the metrics, measures and definitions are clear and can be extrapolated correctly within the context of the manufacturer’s locale and culture.”

“People who are the owners of brands look at a variety of intermediaries to create a brand,” adds Phil Best, vice president of product design and innovation at Cincinnati-based LPK. “An agency would help create the brand and a template for how it should be communicated. Then additional players would have to interpret how that brand has to play out in the market. And the best thing that the brand owner can do is to make sure there are clear principles about how the identity of the brand itself gets played out in production… The brand owner has to be clear with the principles that drive the brand, and if you’re a contract manufacturer, you have to know and understand the priority of communication for the brand. You have to know the visual assets, how they are supposed to be used and how to create the overall look and feel of the brand.”

Yet the communication can’t all be upfront, it must continue throughout a brand’s life, and brand owners must be forthcoming with expectations and changes to a brand’s message.

“It’s always a good practice to debrief,” Best says. “Setting and checking expectations on how you’re going to gauge the health of the relationship becomes critical — the most important step — that either party can take to maintain and grow the health of the business. It’s a win-win-win for the brand owner, the manufacturer and the people buying the products.”

“Co-packers need to schedule at least one or two meetings per year with CPG contacts and reconfirm brand expectations,” adds Bill Gislason, director of growth and development at Haney Packaging Resource Center, Cincinnati. “Co-packers may be surprised at how the brand can quickly shift priorities and expectations based on market changes.”

Recovering from a Recall

Market changes are important, but market challenges are even more critical. In an era marked by recalls in categories ranging from ingredients in food, beverage and personal care segments to toys, electronics and pet supplies, brand owners and contract manufacturers must have a unified approach to protecting brands in the case of a recall.

“Nothing beats clear, decisive action,” Best says. “Like in any relationship, when things go haywire the most important foundation is communication.”

From toys to pet food and the recent scare with melamine-tainted milk products, industry players can — and should — learn from each occasion. And the verdict is clear, according to industry experts and observers: Immediate action and acknowledgement is the road to take to best preserve a company and its brands.

“I think that business owners and boards have learned the lessons of others who have dealt head-on and those who have tried to spin their way out making decisions with potentially significant financial impact,” Federspiel says. “There are ways to mitigate the financial fall-out but there are no easy ways to rebuild the trust with the American consumer.”

The Big Picture

A company’s intellectual property needs fierce protection and in the case of a contract relationship experts say it’s clearly best to set finite expectations, spelling out requirements and deliverables throughout the process of getting a product on the shelf.

Sometimes, Federspiel adds, “tool ownership” is a good approach for a brand owner. “Keeping tight control on the tools used to create unique shapes, parts — whatever defines the intellectual property in physical form — at the very least puts financial and legal barriers in place. This isn’t going to stop those who operate with little regard for ethics or international law, but it puts them on notice that someone is paying attention.”

Because no one could debate that there is precise attention being paid to the consumer-packaged-goods industry and its processes, brand owners and contract manufacturers and packagers need to stay focused on the big picture. “Given the state of the economy, there is absolutely no room for error or rework throughout the entire package development and implementation process,” Gislason says. “Co-packers with dedicated front-end capabilities need to fully leverage this, now more than ever. It could mean the difference between success and perceived failure by the customer. As CPGs begin to outsource more than ever over the next 18 months, co-packers with these capabilities will win more business.

“Brands need contract manufacturers now more than ever,” he adds. “Developing meaningful, balanced relationships is the foundation of good business. I would say that many of the strongest brands are strong because they understand the importance of strong, healthy relationships with their contract manufacturers.”