www.affinnova.com

Boosting Packaging Effectiveness

October 2013

B. Blake Howard

Senior Vice President, Design Solutions

bhoward@affinnova.com

+1 607.351.3794

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Introduction

Blake Howard – SVP Design Solutions

• 12 years in creative arts before MBA

• Marketing and brand specialist with packaging expertise

• 5 Years at Affinnova

• Passion for blending art and science

Giles Watts – VP Client Services

• 12 years working with insight & innovation teams

• Joined Affinnova in January to manage mid-cap business in UK & Ireland

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About Affinnova

• Marketing technology company that dramatically improves innovation and marketing success rates

‒ Software and services

‒ Applications for product development, advertising and design

• Best-in-Class technology platform– Unique collaboration software

– Patented optimization algorithms

– Advanced predictive analytics & insights

• Global scale– Headquarters and R&D in Boston

– 200+ employees located in France, Germany, Singapore, Switzerland, UK and US

– Reach across 42 countries

39% Revenue Growth Rate(5-Yr CAGR)

2008 2009 2010 2011 20122007

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State of Packaging

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Packaging is important

According to DataMonitor over 50% of purchase decisions about FMCG products are made at shelf

McKinsey says 40% of consumers change their mind at shelf

$33M loss in 1.5 months

Business teams say they recognize the importance of design, but investments imply otherwise

20% sales increase over first 6 months

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This is reflected in current packaging

54% of in-market packaging diminishes key brand perceptions instead of enhancing

– Affinnova packaging audits

Only 50% of new package design provides a notable improvement over existing packaging, a coin toss

– Affinnova & PRS International

CONSUMER NET RATING

DESIGN EFFECT ON CATEGORY RANK

6

12345

10

11

789

111112

Familiar

Genuine

Flavorful

Fun

Spirited

Social

Refreshing

Long-lasting

Innovative

Modern

Sophisticated

Healthy

-20

-10

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10

20

30

40

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Current process is not reliable or scalable

There is an abundance of good design ideas – but process restricts exploration

Relies too much on individuals using judgment combining special insight in:

Design Aesthetic + Consumer Behavior +Branding + Sales

Includes consumers and competition too late in the design process

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Design Optimisationwith evolutionary algorithms

Expanded agency-client design exploration

Earlier consumer input

Earlier competitive analysis

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Explore

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Exploration Agreement

Creative BriefEnhanceMints

Consumer Benefit: Fresh breath with added health benefits

Reason to Believe: Explore several different RTBs along with potential executions

Brand Character: Smart, healthy, modern, sophisticated

Mandatories: Explore a range of design territories to best express brand proposition

Considerations:Explore variation within territories for Affinnova’s Design Optimiser

Creative BriefEnhanceMints

Consumer Benefit: Fresh breath with added health benefits

Reason to Believe: Explore several different RTBs along with potential executions

Brand Character: Smart, healthy, modern, sophisticated

Mandatories: Explore a range of design territories to best express brand proposition

Considerations:Explore variation within territories for Affinnova’s Design Optimiser

Apothecary

Mint Heritage Vita-mania

Design Territories

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Designer-Driven Exploration (examples)

Explore the same territory among different package structures (include a few variations or thousands)

Graphics within one territory or structure cannot overlap with another, so designs will be seen properly

Explore different graphic territories within the same structure(include a few variations or thousands)

Vita-Mania Apothecary

Mint Heritage

RollsShaker Pack

Bulk Bottles

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Exploring Design Execution

Total Unique Design Concepts

0 0 1

Background 4

0 0 2 0 0 3 0 0 4

4 Logo Lock Up

4

0 1 6

4

Mint Image

3

0 4 8

3

Claim5

2 4 0

5

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Design Review

Designers develop creative on their preferred platform

Adobe files seamlessly upload to Affinnova Studio

Benefits include:‣ Design space visualization‣ Simple client review for robust design spaces‣ Easy feedback process and tracking

Affinnova Studio™Adobe Illustrator®

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Optimise

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Consumers Drive the Optimisation

• Consumers are recruited online based on target criteria

• CLT is possible if needed

• Designs are only shown holistically, never in parts

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To view the concepts, roll over the thumbnails.

To choose a concept, click its thumbnail.

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ThankYou!

Loading Choice Set

2 of 16

To view the concepts, roll over the thumbnails.

To choose a concept, click its thumbnail.

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Optimisation in Real-Time

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Holistic Top Design Concepts

Top Concept 1

Top Concept 2

Top Concept 3

Algorithms used to converge on preferences, not create designsSo no mathematical “Frankenstein” designs

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Benchmark

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Competitive Benchmarking

Measures key packaging functions to first capture attention at shelf, then persuade consumers to purchase, and finally build equity

Attention On-shelf visibility

Purchase Share of preference

Equity Key message communicationPersonality profileWord association

Refinement Click-based heat mapsZone-based verbatims

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Concepts Included

Top Design Concepts In-Market Benchmark ConceptsAfter optimisation, Top Design Concepts are benchmarked in a competitive environment with new respondents

Current

Other Test Concepts

Team Favorite

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Design Optimisation

Impact

Case Study

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In-Market Results

Consumer Packaged Goods companies that used Affinnova’s technology platform for development doubled new product success rates and generated more than two times revenue*

Launch Rate 1 Success Rate 2 2 Year Revenue 3

Optimized Launches

55% 44% $23.7 million

Benchmark 27% 25% $9.0 million

Impact 2.0x 1.8x 2.6x

* U.S. consumer packaged goods new product launches1. Launch rate is a percent of product initiatives which are subsequently introduced to market; benchmark is based on industry averages2. Percent of launched initiatives that meet a success threshold of 2 years in distribution with at least $500k in revenue over the last 2 quad weeks3. Cumulative 2 year revenue (aggregated for multi-sku lines) of launched initiatives and same category benchmarks in the 2003-2008 time frame

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Grimbergen Case Study

Challenge Make a beer steeped in tradition relevant to a younger audience while maintaining its identify

Exploration Agency worked with the Carlsberg team to fully explore design options, including:

Bottle shapes, Sizes, Embossments, Label Graphics, Label Placements and Cap Decorations

Optimise and Benchmark Used Design Optimiser to assess many design directions and establish core design

Results New bottle launched in 9 markets throughout Europe and Asia, with double digit volume growth

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Stranger Danger

Packaging is an important part of the marketing equation

Competitive landscape is constantly shifting

Is your packaging still supporting your brand?

Vodka audit featured in Fast Company and The Dieline

Summary downloadable at affinnova.com

Design Impact

SEXY

1st

6th

2nd

4th

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Affinnova

AFTER PARTY

5 pm

Buffet and Drinks

Expanded Q&A

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Thank You

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Appendix

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Eye Tracking (shelf standout) Find and Click (findability) Discrete Choice (competitive-based purchase)

Clickable Line-up (personality profile)Unaided Word Association (word cloud)

Agreements (key message communication, fit with brand)

Click & Comment (design breakdown)

Benchmarking Method

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Output Summary

Optimise

Attention

Purchase

Equity

Refinement

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Output Summary

Optimise

Attention

Purchase

Equity

Refinement

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Output Summary

Optimise

Attention

Purchase

Equity

Refinement