UK design tops the premier league

According to the Design Council, there are more than 14,800 product and industrial design consultancies spread throughout the UK, of which a healthy proportion is based in London and directly engaged with the packaging industry.

Award-winning graphics and structural work is increasingly being sourced from Bristol, Birmingham, Manchester, Leeds and the rest. But our league table (see page 38) shows that London boasts the highest concentration of home-grown creativity, and, says Pearlfisher partner Mike Branson, is universally perceived to be a “real centre of excellence in relation to design”.

“At least two-thirds of our business takes us outside of the UK, and I’m sure we’re not alone in having that sort of profile,” he says. “Our mind-set is that we operate across a very international territory and can work as easily with a client in the UK as, say, South Africa.”

Unlike substrate-based packaging solutions, creativity is a highly portable and far less cost-constrained commodity. While agencies such as Pearlfisher have been adroit in exploiting that reality through their own devices, there is now evidence of government lending some proactive clout as well.

Design Bridge is among a number of UK consultancies invited to take part in an upcoming government-initiated China Taskforce exercise, promoting British product, corporate and brand design in China, targeting not just firms selling into the UK, but also within their own rapidly expanding local market.

Government support
Hitherto, support has been mainly channelled through a unique London-based institution. “We are extremely lucky to have a government-funded Design Council in the UK. Many other countries don’t have anything like it,” says Elmwood chairman Jonathan Sands. “Even so, in real terms the aid that the Council has received has gone down year on year for almost a decade, so we’ve been getting less money to do probably more work.”

That could soon change, however, and not least on the jobs front as design is being incorporated within the government’s skill-set initiative. With Sands chairing the Design Council’s advisory panel, it is likely that funding will be deployed to plug the knowledge gaps at junior and primary school level, by putting genuinely design-trained teachers into schools.

A sector skills agreement will also seek to address the current lack of ongoing professional development training, says Sands.

In common with the rest of the industry, environmental issues are increasingly important for design agencies. “There’s a massive opportunity to make a real difference to business, but most agencies aren’t up to speed with exactly what that really means in terms of design,” says Sands. “They’re still living in
the paradigm that environmentally friendly design is about recycling. The sort of thing they should be thinking about, for example, is how to design packaging so that you can place more packs on a pallet.

“An average supermarket has in excess of 40,000 different lines on-shelf. If they could clip 10 seconds per line in terms of stacking, then the labour savings are substantial – so shelf-ready packaging and designing things that will decant quickly is a big opportunity.”

To the uninitiated or just plain hard-nosed, design may appear to occupy the flightier strata within the supply chain. But as advertising declines as the primary tool in taking goods to market, packaging holds most of the cards in shifting products from shelf to shopping trolley.

What might understandably grate, however, is the level of return. “Whereas advertising people would see new business in terms of maybe picking up an account worth £5m over three years, the reality for a creative design company could be that they’re looking at a £75,000-£100,000 job that’s finished when it’s done,” says Design Bridge creative director Tim Perkins.

Central to this disparity between risk and reward is the industry’s entrenched aversion to developing solutions without any guarantee of actually getting the work. “I know there are people out there still doing free pitching, but we’d only work on a creative pitch if there’s a fee involved,” says Pearlfisher’s Branson.

Financial pressure
“It exerts a huge financial pressure; even if a fee is offered it will only cover a small proportion of the time and cost involved. Clients will say pitch and invest, but will also want the rights to what you present whether they appoint you or not. That’s the norm in most situations.

“The carrot is clearly the win, and that’s assumed to provide a fair basis. But you’ve only got to be working on four or five pitches at the same time to make the difference between making a profit in that quarter or not. It’s mostly with new business, but there are certain firms that are almost serial pitch requestors.”

The inescapable supposition shared by many agencies is that inviting tenders to pitch is a cheap way to snap up new ideas. “There are probably a few clients like that, but most of the time it’s because they’re not confident about the project and are in need of reassurance,” reckons Perkins.

Aside from zealously protecting their intellectual property, most agencies would undoubtedly prefer to be approached on the basis of creative work already commissioned; hence, the popularity of awards such as those organised annually by the Design Business Association (DBA), D&AD, New York Festivals, Mobius and a raft of others. That’s fine for the established shops, but not much help for agencies looking to break into the market or else finding themselves short on clients.

Sands say the big challenge for the sector at the moment is that the retail economy is “tightening up considerably”.

“In that climate, design agencies that are ‘quiet’ end up cutting costs and buying business on price. While we would always present ourselves on the basis that design is an investment, not a cost, many agencies don’t know how to sell that argument; they’re talking about branding in terms of look and feel, and not about making life more efficient.”

Relationship management
Time was when client/design consultancy relationships were conducted with all the no-strings abandon of a one-night stand, but both sets of partners have since learnt that something more enduring can be more fruitful.

“If you’re very successful for somebody you do get a continual stream of work,” says PI Group partner Steve Kelsey. “We’ve worked for P&G for 24 years unbroken. We don’t have a roster with them, we don’t have a contractual agreement – we’re only as good as the last job we did.”

Consultancies are looking for closer and longer-lasting connections. The fact that an increasing number of clients now appoint them on a rolling fee basis underlines an appreciation of how effectively brand development can be furthered through a symbiotic relationship.

Staying on board for the long ride, however, has caused agencies to hone additional skills: design consultancy in today’s market is more than slick imagery and differentiated structures.

“Brand owners have now got much higher expectations of what their packaging can do for them in terms of telling the whole story,” says Pearlfisher’s Mike Branson, “and concomitant to that there’s been a blurring of the lines as to where they can get strategic consultancy and advice. Actually, in terms of core brand development, unless an agency can provide a genuine level of strategic input then the client is unlikely to approach them.”

Changing role
Sands concurs that the consultancy’s role has significantly changed in line with packaging’s elevation up the marketing agenda. “Clients need proactive support from their agencies. Our role is much more as a strategic marketing and positioning agency than a basic graphic design shop.”

In one sense, providing a strategic input can be seen as ‘adding value’. Failure to stay on top of the game, however, can be quickly and clinically punished.

“Retailers are de-listing a lot more quickly,” notes Wren & Rowe managing director Paul Foulkes-Arellano. “If something doesn’t perform within six months, the retailer will say ‘get it sorted, show me the rescue plan or you’re dropped’. We call this the distress purchase, and there’s a lot of this sort of business coming through the door. If you’re clever, you tell your client there’s a problem before it happens; that’s where the bigger agencies tend to do really well.”

Better still than spotting dangers ahead, is managing expectations correctly in the first place, says Steve Kelsey. “Innovations projects are complex and cut right through the business so that you’ll be dealing with marketing, production, finance and logistics. The agency needs to be able to manage that.

“It can be something of a double-edged sword, because over time the client will expect you to manage more and more. With some companies it’s quite a compliment and a great benefit to some extent, but you do end up running the whole thing: not just managing your own resources, but theirs as well. Of course, it’s a joint opportunity too; if you show competence, people will trust you with bigger and bigger things.”

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THE ONES TO WATCH
In driving the resurrection of Loewy – one of the design industry’s most venerable institutions – Charlie Hoult is either determining the shape of things to come in terms of where brands go shopping for new ideas, or else is on one of the biggest crash and burn trajectories of all time.

Although Loewy’s packaging-related turnover only gives it a position halfway up our league table, its acquisitions in the past year of Williams Murray Hamm, Epoch and Seymourpowell are likely to send it hurtling up next year’s list.

Everyone talks about it, but Loewy has taken big steps towards positioning packaging design within the bigger picture.

“What is it that marketing directors need these days if they can’t shift product by banging in an ad on the Coronation Street slot?” says Hoult. “There’s a significant element around ‘the last four feet’, which is pack, cut-through and shelf standout. But it’s also brand thinking; aligning the organisation, and fully joined-up brand communications.

“The historic reticence that people have with a one-stop shop is that it sounds like a jack of all trades, master of none. What we’ve been able to do with the Loewy brand is to position it as a string of pearls. These businesses have so far retained their original identity and we’ve no strategy to change that. Our mantra for the moment is ‘specialists together’.”

That will crystallise in Loewy’s upcoming Brands Council programme, described by Hoult as a “Dragons’ Den combining the best brains from these businesses to provide quick-fire diagnosis for retail-ready, new product development, on-pack promotions and the rest”.

Never short of venture capital, Loewy is now a £47m-turnover business and growing fast. Further acquisitions within the packaging design sector look certain, maybe some based overseas although, according to Hoult, “it’s a bit of a challenge going outside of the M25 right now”.

But although London continues to dominate, a number of agencies to watch are springing up outside the capital, notably Tin Horse, in Marlborough, True North (Manchester), and Bristol-based Taxi Studio, whose client list includes Diageo, Coca-Cola, and Tesco.

Following experience gained under the likes of John Blackburn (the Harvey’s Bristol Cream ‘blue bottle’ originator), Taxi directors Alex Bane, Ryan Wills and Spencer Buck realised an original ambition as students to form their own agency five years ago. “We could see no reason why working from the South West might stop us from worrying the guys up in town a little bit,” says Bane.

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BEST OF BRITISH
Pick of the packs submitted for this year’s Design Effectiveness awards organised by the Design Business Association are:

Marqués de Valdueza premium extra virgin olive oil
This strikingly shaped bottle was developed by Design Bridge for a premium olive oil sold under the Marqués de Valdueza brand (produced in Spain by the Alvarez family). The distinctive heritage-inspired label reflects the original brand marque closely associated with the family’s other major commercial interest in cattle breeding. Alvarez oils are sold internationally through high-end delicatessens and supermarkets such as Waitrose and Dean & Deluca (US). While no sales figures are available, Marqués de Valdueza olive oils sales have increased 500% year on year against a category norm of 15%. According to the producer, sales rely solely on brand packaging to the exclusion of any other marketing strategy.

Benylin Cold & Flu
Although Johnson & Johnson’s Benylin holds a 30% value share of cough medicines sold in the UK, it only had 3.8% of the colds and flu treatment market. In looking to extend into the GSL category, design agency Creative Leap initiated an extensive consumer research campaign before developing an iconic ‘wellburst’ graphic for a new pack to compete with Lemsip and Beechams. In attracting new consumers to the brand, Benilyn exceeded its first-year target value in less than four months, and achieved incremental sales during 2006 at more than 18% over target.

Waitrose Family Toiletries
Waitrose’s own-label Family Toiletries bath and shower products range was designed by Pearlfisher. Working to a budget of £35,000, the redesign focused on the fresh fruit content within the product. Post-launch (March 2005), sales rose by 58% sustained over the next two years, and value growth of 34%. According to Waitrose, the brand is now worth £1.5m a year (market leader Radox is valued at £1.9m) with Waitrose achieving a 9% annual uplift within a category only growing at 1.5% a year.
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