Branding

Talenti Gelato's Clear Packaging Advantage


Talenti Gelato's Clear Packaging Advantage

Photograph by Aaron Dyer for Bloomberg Businessweek

Devin Liddell gets uncomfortable in the freezer aisle. A brand strategist at Teague, the Seattle-based design firm that came up with the Pringle’s can, Liddell says he gets overwhelmed by all the busy, brightly colored cardboard containers advertising bizarre flavors. “Most people associate ice cream with a calm, indulgent moment,” he says, but “its packaging is very often rowdy.” So when Liddell recently stumbled across a pint of Talenti Gelato’s Belgian milk chocolate gelato packaged in a clear plastic container, he had to buy it. “It is almost a kind of quiet branding,” he says. “It has a totally different, more confident posture that grabs your attention by saying less.”

Ten-year-old Talenti, based in Minneapolis, is a case study in how packaging can propel a small brand to the top. According to Nielsen (NLSN) data, Talenti is the best-selling gelato brand in the U.S. and third in the $290 million premium ice cream category, behind Ben & Jerry’s (UL) and Häagen-Dazs (GIS). The gelato, which comes in 21 flavors, including Tahitian vanilla bean and southern butter pecan, sells for an average of $4.60 a pint —about 15 percent more than competitors. Since 2008, when Talenti was confined mostly to small outlets in the midwestern U.S., sales have jumped from $1 million to a projected $100 million for 2013. Talenti is now available at more than 30,000 stores nationwide, including Whole Foods Market (WFM) and Wal-Mart Stores (WMT).

Like Liddell, many consumers give Talenti a try because of how it looks, customer surveys and focus groups have shown. The company’s rapid growth reinforces an open secret in retail marketing: Clear is good. A 2012 study by Clemson University that tracked purchases of household items such as men’s razors and air fresheners found that people bought products in transparent packages about four times more often than those in traditional cardboard packaging. “Not only do we have nothing to hide, the brand stands for authenticity,” says Dean Phillips, Talenti’s chairman.

Talenti founder Josh Hochschuler became smitten with gelato in the late 1990s while working as a bank analyst in Argentina. Most gelaterias mix and display their goods in a clear tray for customers who buy it by the scoop. By packaging his product in plastic jars, Hochschuler aimed to reproduce what he calls the “rainbow effect” inside the freezer case.

Hochschuler, Phillips, and Talenti Chief Executive Officer Steve Gill now manage the brand through a holding company, David & Goliath. Gill and Phillips’s father, Eddie, bought 80 percent of the original business in 2008 after recognizing the growth potential of the clear package concept. “Packaging is analogous to a person’s clothing. It sends an immediate message of style and substance,” says Phillips, who joined the company last year after his dad died.

The Phillips family and Gill hail from the spirits industry and helped establish premium vodka in the U.S. in the 1990s with the introduction of Belvedere, a Polish brand they negotiated the international distribution rights for and eventually purchased outright. They revamped Belvedere’s look to make it stand apart from Absolut (RI:FP), the market leader at the time. While Absolut’s squat, screw-top bottle is minimally designed in keeping with its Swedish heritage, Belvedere’s tall, sleek bottle features an intricate drawing of the presidential palace in Warsaw, plus a cork. According to Phillips, Belvedere grossed more than $1 billion from 1995 to 2005, when it was sold to Louis Vuitton Moët Hennessy (MC:FP) for an undisclosed sum.

Talenti’s sales rose 86 percent in the six months through mid-May compared with the same period last year. To keep the hot streak going, Phillips says the company is launching a gelato pop this month. In a riff on the transparency theme, the chocolate-dipped, oval-shaped confections will be sold in a three-pack with a clear plastic sleeve rather than the more traditional white rectangular package.

The bottom line: Talenti gelato has ascended to No. 3 in the premium ice cream category, partly on the strength of its packaging.

Paynter is a Bloomberg Businessweek contributor.

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Companies Mentioned

  • NLSN
    (Nielsen NV)
    • $46.99 USD
    • 0.27
    • 0.57%
  • UL
    (Unilever PLC)
    • $44.06 USD
    • 0.18
    • 0.41%
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