Setting the right budget for your Product Packaging

Why the right level of investment in your branding and packaging is critical.

Every week we speak to a number of people who have an idea for a new product, have a product ready for market, or have a product in market that’s failing to resonate with their customers. Rightly they are getting in touch to talk about the design of their packaging. And if there’s one thing our experience tells us, it’s that the right branding & packaging is absolutely critical to the success of your product at retail.

One of the tough questions for business owners with a product to sell is; ‘how much do I invest in my packaging?’ When budgets are stretched (which is almost always) packaging is often seen as the least critical element. For a business with a product to sell there are so many different things vying for budget – not the least being the manufacture of the product itself – that the branding, packaging and marketing are often left until last, and have to make do with the budget left over at the end of the process. This is far from the ideal way to set a budget for such an important business investment.

Whilst you have no choice but to invest in developing a good product, there’s little business benefit if you can’t sell enough of them to make profit. And the best strategy for selling product is to position it to the right audience with with the right branding, and convince the right retail channels to distribute it.

A few years back we worked with TOM Organic, a small business with limited distribution and a brand and packaging design that failed to differentiate the product. We developed a clear brand strategy, market positioning and packaging design for TOM that communicated the right messages to the right market. We were able to relaunch the product to Chemmist Warehouse, Woolworths and Coles, who all understood the new brand proposition and saw the benefits of picking-up the range. The impact in the first six months of relaunch was in the magnitude of a 1000% increase in sales and market share. The rest as they say is history as Aimee has continued to grow the brand into a significant player in her category. You can read our case study in more detail here.

packaging design

For many of the brand owners we talk to, their business plan does not extend beyond manufacture, pack and sell through a web site. And whilst there’s nothing wrong with this approach as a way of prototyping and market testing, the model rarely equates to a business with significant cashflow. Any product-based business model requires scale of distribution – a bunch of retailers and/or online market channels selling your product for you. That scale brings economies of production and business costs that allow enough cash-flow to fund growth (and even profit).

And the key to attracting and convincing the right retailers that your product is a must have for their stores (online and offline) is a strategic value proposition and well designed branding and packaging.

So how much should you budget for your branding and packaging?

The three elements of every successful product brand are:
01. Brand Strategy
02. Brand Identity
03. Packaging Design

01. Brand Strategy
The depth of brand strategy can range from top line positioning, value proposition and pack messaging through to consumer research and insights, multi layered brand definition, brand story and product messaging and brand naming. The cost accordingly can range from as little as $5,000 through to $20,000 and upwards once research is required.

02. Brand Identity
For consumer products we see the packaging as the primary visual expression of the brand. Yes, we need the brand mark (logo) to say the right things to the right audiences (brand positioning), but if budget is tight we will always prioritize packaging design over the brandmark that appears on the pack. On this basis the cost can also range from as little as $5,000 through to $20,000.

03. Packaging Design
As with the first two phases of a packaging project, there are many ways to cut the cloth with packaging design. Usually we will audit the visual language of the competitors in the market to understand their positioning and map the visual language already associated in the minds of the market. We also prefer to look for approaching or early stage consumer trends with the potential to become significant movement that we might leverage to the brand’s benefit (think; ‘healthy’, ‘organic’, ‘artisanal’). We then develop between 2 and four concept directions (usually dictated by budget) applied to a couple of your SKUs to give an indication of range. Once a direction is selected we refine the design and then create the artwork for your range. The packaging concept design cost can range from $8,000-$18,000 with artwork varying from $500-$2000 per SKU depending on complexity of packaging.

Additional Costs
Additional costs likely to pop-up that should be prepared-for include original illustration or photography which is often required and can add $5,000-$10,000 to a budget. Likewise if extensive copy o=r instructions are required an additional allowance of $2,500-$5,000 should be allowed for.

For many businesses, even the lower end of these costs at $18,000 is tough to get your head around. In some cases, such as design of packaging labels only or when brand strategy already exists, the costs can be considerably lower. But rather than looking at these costs in isolation, they must be considered as a business investment. In the case of our work with TOM Organic this investment has returned an increase in sales in the millions of dollars each and every year – there are few business investments with the potential to return 160 times your initial outlay year in and year out. The question should not be; ‘Can you afford to invest properly in creating your product branding and packaging’, but ‘Can you afford not to?’

Whether at start-up or with a product in market we encourage you to consider your branding and packaging budget as early in the business planning process as possible. We are always happy to talk through your vision and provide a realistic estimate of costs to help you set your budget. Give us a call or drop us an email and we’ll get right back to you.

The above cost indications are provided with the intent to assist businesses and brand owners in the budgeting for their packaging requirements. These costs do not represent a quote, but provide a realistic starting point for a conversation that will generate a quote specific to your needs.


  1. Thank you so much for this! My daughter is a visually impaired visual artist who was diagnosed with a massive brain tumor at age 10, and the 3 surgeries she underwent in the course of 7 yrs. left her permanently visually impaired. Nevertheless, she is an excellent artist and is about ready to embark on her MFA in Visual Art. She recently “won” an art contest launched by a national charity in conjunction with a beef jerky manufacturer, who promised that $2 for every bag of product sold bearing a label with the winning artwork would be donated to the charity. For 2,000 labels printed at $10 per bag, that would mean that the charity would receive $4,000 and the company would receive $16,000 ; moreover, with such compelling artwork as my daughter has produced, the company would not need to spend anything for package design. So, what would my daughter receive in return? A “gift bag” of beef jerky!! In essence, *she* is “donating” the $4,000 to the charity! What a deal, huh? Thanks to your article, I instructed her to ask for 10% of the retail price for the product, or $2,000. She is already an award-winning artist, so she is comfortable walking away from the “deal” if the parties balk at her terms; moreover, she never signed any release or authorization, so she owns her copyright and will not yield that right. Even if the company and the charity agree to payment, her authorization would be only for the 2,000 labels already planned. Should there be a great demand, the company and the charity would have to negotiate a new agreement.

    • Hi Karen, We’ve come across this so often in our professional and personal lives. Sometimes it starts with an altruistic idea but mostly seems to be a cheap way of getting new creative or ideas. We’ve turned down work once we feel that us or our work isn’t been valued appropriately. This is the same. It’s hard to do when you’re trying to establish yourself early in your career. But if the people you’re working with don’t value what your doing, something needs to change. It’s essentially just another form of free pitching: Asking someone to do the work on the hopes of winning and getting paid.

Post a comment

Tags: , , , , , , , , , , , , ,