interpreting current packaging trends & future consumer behaviour · ·...
TRANSCRIPT
1Arena PACE Forum Europe | March 2018
Interpreting Current Packaging Trends & Future Consumer Behaviour
Dominic Cakebread, Head of Packaging Consulting
Arena PACE Forum Europe 6 March 2018
Agenda
Arena PACE Forum Europe | March 2018
2
About GlobalData
Current Consumer Behavior & Packaging Trends
Conclusions - how to keep ahead
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2
3
Focus throughout on:
Unique packaging to differentiate & strengthen brand
identity
E-commerce to create stronger links between
brand & consumer
Smart technology to engage a more
informed consumer
Agenda
Arena PACE Forum Europe | March 2018
3
About GlobalData
Current Consumer Behavior & Packaging Trends
Conclusions - how to keep ahead
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2
3
Arena PACE Forum Europe | March 2018
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About GlobalData 4
Arena PACE Forum Europe | March 2018
Our Consumer & Retail practice 5
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The Coca-Cola Company
Our Consumer & Retail practice provides unparalleled data and insights to over 1,000 of the world's largest companies across the CPG and Retail industries
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
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Agenda
Arena PACE Forum Europe | March 2018
7
About GlobalData
Current Consumer Behavior & Packaging Trends
Conclusions - how to keep ahead
1
2
3
Arena PACE Forum Europe | March 2018
8Key Consumer Behavior & Packaging Trends
1. Demographic & Economic Growth
2. Sustainability & Environment
3. Multichannel Distribution & E-Commerce
4. Smart Packaging and the Connected Consumer
5. Personalization and Individualization
6. Digital print
7. Differentiation in Shape & Design
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
• Long term, robust & sustained world population growth underpins positive product consumption and packaging growth
• Key factors are young demographic profile in many emerging economies coupled with rising longevity in more developed regions
• Other drivers such as urbanisation, more single person households and busier lifestyles promote demand for smaller, lightweight “on-the-go” convenience packs
• Aided by slow shift from loose to formally packed product, this mean that unit pack growth tends to outpace category growth
1. Demographic & Economic Growth 9
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
Economic Growth Drivers :
• GDP Growth and rising consumer disposable income• Movement from Export to Consumption Economies• More working women • Rapid Growth in eCommerce & Online Shopping• Growth in global trade
All Leading to increased demand for:
• Smaller, lighter single serve, on-the go packaging • Lighter weight packaging – plastics & flexible pouches• More multi-packaging• More convenience features• Easier to open and recloseable packs• More products brands & competition leading to..• Need for individualisation of pack design to differentiate
Ageing populations and longevity is also driving need fro better easy to open and convenience packs
1. Demographic & Economic Growth 10
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
2. Sustainability and the Environment
• As total and per capita product and packaging consumption has increased, so too has concern to reduce packaging waste
• Consumer concern is rising rapidly and spreading geographically such that “Sustainability” is now a fundamental aspect of packaging’s DNA and built into many major corporate and brand development plans
• In consequence we see more use of:
- Stronger, but lighter weight, less resource-hungry materials- More use of recyclable and renewable materials- More responsibly sourced materials (e.g. FSC)- More use of barrier coatings for shelf life and better print- Rising interest in bio-derived and biodegradable polymers
• The sustainability debate is also increasingly moving from land-fill to ocean waste with a recent strong focus on plastics
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© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
Light-weighting – has been an ongoing packaging industry mega-trend for a decade –is still spreading globally and across CPG categories and countries
Driven as much by pressures to save costs & the desire for efficiency improvements in supply chain as environmental concerns
Are we possibly reaching limits of
technical feasibility in some key applications (beverage cans, PET bottled water, glass
bottles)?
But in the general packaging market, light-weighting is still
driving a strong trend from rigid to lower weight rigid plastics bottle and flexible
packaging (especially stand up pouches)
2. Sustainability and the Environment 12
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Solid waste and pollution issues are catching up with plastic
What?
Why?
Take-out
Declaring war on plastic
• Major packaging users are trying to move awayfrom traditional fossil fuel based plastic packaging,and towards more sustainable materials likesugarcane derived polymers
Growing solid waste and pollution issues
• Global consumption of plastic bottles is expectedto exceed a half trillion units annually by the year2021, generating huge amounts of waste.
Weaning the FMCG industry off of plastic
• The FMCG industry is increasingly vulnerable toplastic pollution concerns. The plastic issue willencourage companies to find creative new ways toreduce the use of plastic.
Healthy Choice Power Bowls – US. This frozen
entrée line is packaged in
bowls made of plant-based
fiber.
Pacific Shaving Co. single use minis
shaving cream – US. This shaving cream is
packaged in 100% water-soluble food-grade film pods that dissolve when they
come in contact with water, leaving no
waste.
Source: [1] GlobalData, October 2017
2. Sustainability and the Environment
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CanO Water, a UK-based packaged water brand sold in resealable, "highly recyclable" aluminum cans, spells out "the plastic problem"
Source: [1] Business Insider, February 2017. Images from CanO Water.
"75% of all aluminum we use today was first mined back in the 1800s. It's infinitely recyclable." – Josh White, co-founder of CanO Water, London1
4. Sustainability & the Environment
2. Sustainability and the Environment
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Coca-Cola is trialing a refillable, micro-chipped bottle that one can refill at strategically placed Freestyle beverage dispensers in the UK
Source: [1] Coca-Cola European Partners, October 2017; [2] The Guardian, November 2017. Image from Coca-Cola European Partners.
Coca-Cola European Partners (CCEP) is testing a refillable plastic bottle with radio frequency identification (RFID) to allow soft drink refills at the UK's University of Reading1
RFID-equipped bottles track when and how many times bottles are refilled at a Coca-Cola Freestyle machine.
Staff and students can pre-pay for a set number of refills linked to their own bottle.
The UK is considering a tax on single-use plastics to curb ocean pollution, citing the success of a 2015 plastic bag tax that cut usage 85%.2
In the first two weeks of the effort, CCEP provided 1,500 bottles to be used during the Ten-week fall semester.
2. Sustainability and the Environment
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
Bio-derived PET – 35 billion Coca Cola Plantbottles sold between 2009 and 2015
New Materials Technologies
• Strong current R&D focus on growth in bioplastics
• To date main volumes in market are on bio-derived not biodegradable polymers
• Potential PET substitutes such as PLA and PEF most important in beverage packaging
• Biodegradables however now becoming more important in coatings to improve recyclability of PE coated boards
• SiOx, EVOH and other barrier coating increasing used to extend shelf life without end-of-life recycling issues
• Paper industry looking seriously at tree-based resins, MFC and molecular chemistry to substitute for oil-based plastics and barrier coatings
162. Sustainability and the Environment
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
3. Channels of DistributionTraditional Retail
• Growth and change in self service modern retail infrastructure still remains a primary driver of packaging demand around the world
• Retail, e-Commerce and Online Shopping all changing fast & packaging needs to adapt to this
• In a more crowded environment and online the pack need to perform better to stand out, attract consumer to sell the product in all channels:
• Interest can be being boosted by:• Innovative Pack Shape, Print & Design• Use of Multi-packaging & Shelf ready outers• Better in store display and merchandising
Food Service
• Often overlooked , but growing at twice retail in many countries• Greater margin opportunity with smaller lighter, ‘on the go’ packs• Attention currently on waste from disposable drinks cups -
3. Multichannel Distribution and E-Commerce 17
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
E-Commerce
• Growth in online shopping has been accelerated rapidly in recent years as consumers have switched from ordering by computers to Smart phone apps
• Most online packaging is still far from optimised however; often standard, unprinted boxes, oversized, do not fit products, distribution system, delivery vehicle or letter boxes
• Longer term packs will be more purpose-designed to match products or even turned in to moving adverts (Minion Movie)
• Advertising potential of packaging in this area is under exploited- even online it is the packaging that the consumer sees not the product!
• Tactical use of digital print to address this is a likely to be expanded in future years
3. Multichannel Distribution and E-Commerce 18
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Friction-free shopping is making interaction with brands is easier than ever
What?
Why?
Take-out
Friction-free shopping
• With advances like cashierless stores and Amazon'sAlexa voice assistant, friction is being removedfrom the FMCG shopping and buying.
Making the buying process seamless
• Friction-free shopping is all about making thebuying process as convenient (and in some casesas automatic) as possible.
Redefining "ultimate convenience"
• Recent friction-free shopping advances like voiceactivated ordering are redefining what ultimateconvenience means.
Amazon Go – US. Using "just walk out technology," Amazon Go's app adds
purchases to a "virtual shopping cart" that is billed once one leaves the store.
Source: YouTube; Amazon; Morrisons.
Amazon Dot – US; UK; Australia. Amazon's Alexa-equipped Dot
enables voice-activated shopping. The
Morrisons supermarket chain (UK) now accepts
voice orders from Alexa.
3. Multichannel Distribution and E-Commerce
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Rapid acceleration in developments – the future is nearly here!
What?
Why?
Take-out
Multiple and varied new technologies are leading fast, radical, and lasting change
• Big data, CRM, artificial intelligence, automation,virtual/augmented reality, smart homes, socialmedia… the list seems endless - and growing!
We are already in the new digital age
• Concept-to-market times are getting shorter whileconsumer acceptance and adoption of newtechnology is faster and more widespread.
Act now to futureproof your business
• Seek to understand and master the ever-changingdigital landscape.
• Take risks: experiment or fall behind.
One-tap ordering
Automated delivery
Smart homes and appliances
Wearable devices
3. Multichannel Distribution and E-Commerce
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We already live in a ‘Smart’ and ‘Connected’ society: Global consumers…
…have high access to
smartphone technology
…look to digital to make their
day-to-day environment
more efficient
…have a favorable
perception of social media
…are keen to use smart solutions to
manage their personal needs
2.3bn global
consumers were estimated to
own a smartphone in
20171
63% global
consumers believe the Internet has
had a positive influence on
their social life2
58% global
consumers find an internet connected
home/ kitchen appealing2
72% would consider
using / are already using digital tools to
monitor/ manage exercise/ fitness3
4. Smart Packaging and the Connected Consumer
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Traditional purchasing paradigms have also already shifted
79% of global consumers check prices online
before making purchase
Only 25% of global consumers are highly attentive
to marketing claims in-store
43%of global consumers
trust brand and manufacturer websites when making product
choices
21%of global consumers
regularly post reviews about goods/services on social networking sites e.g. Facebook
4. Smart Packaging and the Connected Consumer
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
• Explosion in Smart phone ownership means that more and more consumers are now “digitally connected” and “always on”
• Smart packaging systems have been widely used in modern distribution, warehousing and logistics for a some time
• But RFID, NFC and similar system can engage the consumer more directly but are in their infancy in consumer packaging applications
• Main current focus on high end products where brand authentication or theft protection are higher needs (wines & spirits, pharmaceuticals, cosmetic)
• However 47% of consumers find interactive packaging an “exciting” or “nice to have” packaging feature (GlobalData Survey, 2015)
• Smart Packaging systems can also be used communicate meaningful data to consumer such as Spoilage, Tamper Evidence, Temperature Change & Product Authentication
4. Smart Packaging and the Connected Consumer 23
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
Outlook
• The use of QR Codes, RFID, NFC. AR and printed electronics will increase as lower cost printed electronics remove current price limitations
• But it is not just these technologies – there is a huge array of related and unrelated technologies are currently at R&D stage including active and intelligent packaging systems, mass serialization, thermochromic inks, track ’n’ trace systems.
• Some fusion of technologies likely in future years as the most simple, pragmatic and cost-effective solutions emerge as winners
• Many systems are still too expensive for primary packaging applications and difficult to incorporate in high speed filling lines
• Smart Packaging can also provide a real world link to Big Data Stores and data mining facilities
• Anti –counterfeiting remains a key driver of current Smart Packaging adoption
4. Smart Packaging and the Connected Consumer 24
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A complex area – need to identify where and when to play in the digital landscape
Location-Based Technology
CRM Systems Big Data Handling
Contactless Retail
Social Media Gamification Smart Appliances Virtual Reality
Influencers Wearable Technology
Voice-Activated Augmented Reality
Traditional E-Commerce Apps Smart Delivery Systems
Artificial Intelligence
Smart Labels / Packaging
In-Store Smart Tech Smart Homes
Automation 2.0
Easy
Difficult
Now Future
4. Smart Packaging and the Connected Consumer
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
“Selfie” Culture
• As developed markets have become more saturated, consumers increasingly looking for differentiation and individualisation
• Manifest for example in growing trend for craft beers and spirits and tailored high end premium & luxury packaging
• Difficulty is to be able to achieve this individualisation without compromising filling lines speeds
• Future of more diverse products - individually tailored but at faster filling speeds
5. Personalisation and Individualisation 26
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"I made it" greater consumer engagement can add a new personalization/customization element to the spirits consumption experience
Pernod Ricard's Our/Vodka brand recently launched new vodka infusion kit in the UK
Source: [1] The Spirits Business, September 2017. Images from Our/Vodka; Archie Rose Distilling Co.
Our/Vodka's Our Infusion Kit line uses a botanical infusion bag containing oak,
juniper, citrus, or tea blends to flavor vodka over an eight-to-15 hour period.
"We believe that the range of Our/Infusion kits are changing the spirits industry by helping the end consumer create something entirely new from a
bottle of Our/Vodka."- Kalle Söderquist, co-founder of Our/Vodka1
Independent Sydney distillery Archie Rose offers tailor-made spirits and DIY gin classes
By uniquely distilling every botanical individually, we’re able to tailor your spirits a single bottle at a
time. So go ahead and pick your favourite botanicals, set their strength and we’ll ship your creation
straight to you. It’ll even have your name on the back label.
5. Personalisation and Individualisation
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
• Viability of DP was proven by Coca Cola’s Share-a Coke campaign but since expanded to a wide range of major food, beverage and other CPG products
• Relatively expensive ‘networked’ process (except in short runs) – but costs are falling
• Moving from ‘versioning’ to true ‘personalisation’
• Krones & KHS promoting new ‘bottling on demand’ systems; aimed at combining flexible run length with high output and digital print – a market of ‘one’
• DP currently largely compliments traditional print
• But rapid improvements in print quality and speeds (especially inkjet) means it is likely to become more mainstream over the next 10 years
6. Digital Print 28
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
• With store shelves busier, DP can be harder to attract customer attention
• Novelty in digital print variation can therefore help stimulate demand and boost brand identity
• More seasonal / events at present (Halloween, Football, World Cup, Olympics )
• Integrated Web-to-print design for faster turnaround, lower stock holding
• Newer better range of finishing system for pack decoration in luxury/ gift area
6. Digital Print 29
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
Heineken Mini –Small size bottle is targeted at the aperitivo (pre-dinner drinks) occasion which is popular in Italy. Each 15cl bottle contains 0.6 units of alcohol.
Smaller servings allow companies to target new consumer groups and occasions
• Beer -Smaller sizes good consumers whodo not want to drink larger quantities ofliquid (e.g. female consumers, olderconsumers)
• Also offer greater portability & betteropportunity to increase margins
• Soft Drinks – sugar taxes in some Europeancountries now also starting to drivedemand for smaller pack sizes
7. Differentiation in Shape and Design 30
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
• Unique convenience features are increasingly a key differentiator for brand identity
• The main focus in still largely on easy opening , closing, dispensing and tamper evidence system (e.g. low torque and wide-mouth closures)
• Full aperture drinks cans are rare but offer better option to drink from can
• Also a strong focus at the moment on improving closures/dispensing systems for stand-up pouches
• For food products resealable closures, lidding and zippers are also becoming more prevalent to differentiate the brand and add value
• Cash rich, time poor consumers driving demand for quick preparation ready meals and ‘on the go ‘ packaging
Convenience and On-the-Go
317. Differentiation in Shape and Design
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
• Often in less developed markets thereis a more limited range of pack shapesand sizes available
• As markets mature, they become morecompetitive and saturated, the needto differentiation increases leading toa far wider range of packaging typesand sizes
• Slim and Sleek cans for example are ameans of creating uniqueness byformats and the can shape linkdirectly to brand ID (Red Bull)
Sleek &
Slim cans
maximize
retail shelf
space and
provide a,
format.
BrewDog Ghost Deer,–
Available in
60ml
miniature
glass bottles
partly to undo
BrewDog's
reputation as
a reckless
brewer.
Changes in Packaging Design & Shape to create differentiation
• However certain pack shapes & sizes are moreviable routes to differentiation (e.g. for shortruns)
• Stand-Up pouches (retortable and non-retortable) have made big inroads into foodmarkets by offering an entirely different shape
7. Differentiation in Shape & Design
Heineken Beer
32
Agenda
Arena PACE Forum Europe | March 2018
33
About GlobalData
Current Consumer Behavior & Packaging Trends
Conclusions - how to keep ahead
1
2
3
Arena PACE Forum Europe | March 2018
Conclusions
Traditional Retail is no longer the core driver of category or packaging growth
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Consumer behaviours are being influenced
increasingly by rapidly changing personal and
societal changes and are less driven by traditional advertising and media
Digital lifestyles are changing consumer
behaviours –understanding the
personal and individual drivers of consumers will
be critical to future business success
In an age where digital media and online
purchasing is becoming the norm, packaging
needs to be more versatile, interactive and central to
the brand identity – a primary sales vehicle and means of communication not just a cost and means
of delivery
© 2018 | Arena PACE Forum EuropeArena PACE Forum Europe | March 2018
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