FDBusiness.com

Are you maximizing your packaging to BE RELEVANT AND VALUABLE for today’s consumers?

Jim Lucas, evp, Global Insights & Strategy, Schawk Inc. — Packaging Digest, 5/1/2013 2:28:00 PM

With the first quarter of 2013 behind us, where lies the greatest potential for packaging? These top shopper/consumer trends are not predictions, but rather opportunities for packaging in the remainder of 2013 and beyond. Each of these opportunities is based on providing consumers with something that is useful or valuable. With that in mind, we look at five areas with positive potential.

1. Sustainability
Sustainability continues to be an important theme for consumers globally—but with some twists.

Increasingly, consumers are holding companies (manufacturers and retailers alike) to a higher standard than themselves. While consumers have come to expect green characteristics as an important element of products, they are less willing to pay a premium for these elements. While shoppers tend to purchase green products, enthusiasm has waned somewhat, according to Mintel’s Attitudes toward Corporate Social Responsibility-U.S., published in Sept. 2012. Whether ingredients, packaging or process, “green” is not the stand-out differentiator it once was. It is important, but not as top-of-mind. It is becoming a greens fee in the marketplace.

As transparency rises, the expectation is that companies will be green. Consumers have become more skeptical and need help determining whether a product delivers on its claims (that is: proof).

An example of this is Method’s Ocean Plastic packaging. Method’s Ocean Plastic has both a good back story (the plastic is harvested by Method employees from ocean beaches) and provides proof (post-consumer recycled plastic creates a uniquely gray resin color).

Sustainable packaging plays an important role in beauty and personal care (BPC) products, too. While not a primary element of BPC products, half (49 percent) feel it is important to have products made from recycled materials, and 43 percent think it is important to recycle BPC packaging. Fresh handmade natural personal care and cosmetics manufacturer Lush, for example, claims that 70 percent of its products don’t have packaging, according to Mintel’s Personal Care Consumer-U.S. report, published in Sept. 2012. Lush promotes on its website, “Where we can, we make products into solid form so we can ditch the packaging and preservatives.” What packaging Lush does use is made from 100 percent post-consumer recycled materials.

[CLARIFICATION 6-3-13: Erin Brady, U.S. public relations for Lush, clarifies: “It’s actually 38 percent of our products that are what we call ‘naked’ or free of packaging. We are also 100 percent vegetarian, 82 percent vegan and 60 percent preservative-free at this time. This of course changes with new product launches but those are the updated stats as of now.”]

In sustainability’s new role, consumers look to companies to provide a platform that allows them to make a difference, to do something they might not be able to achieve on their own and feel good about their purchases.

2. Authentic, credible, traceable
Today’s value chain often obscures the connection between food products and their origins. Packaging is an opportunity to provide information about locale and traceability, and re-establish the connection between the consumer and food brand.

Reassurance of authenticity/credibility of products has become important in emerging markets. In China, products like infant formula and milk powder come with verification (such as seals or certification, holograms and QR codes).

Provenance can serve to communicate premium quality, authenticity and unique, distinctive taste. Companies like Japanese snack manufacturer Calbee, which is present in numerous markets, often incorporate local ingredients into many of its snack products in other markets. Heinz’s First Harvest Ketchup (sold in France) represents a unique combination of provenance and season.

3. Branding
In addition to standing out at the shelf, packaging continues to be an important part of branding. Packaging allows marketers and retailers to amplify a brand’s essence, connect with a brand’s heritage, pique interest in trial/purchase, demonstrate brand premium value and allow consumers to express themselves through choice.

Use of limited-edition and exclusive packs saw growth in 2012. Five markets (Japan, Germany, U.S., U.K. and France) account for 68 percent of exclusive/limited edition launches. Beauty and personal care, food and beverage account for 95 percent of launches. Exclusives and limited editions represent a huge opportunity for packaging to drive branding.

• Oreo’s 100th Anniversary packaging demonstrates that heritage, via longevity, does not have to be stuck in the past, but may be reimagined, updated.

• Retro packaging (used by many brands in 2012: Fanta, Ruffles, Doritos, Pepsi and Coke) helps amplify heritage via nostalgia. In addition to evoking fond memories, it can create appeal among younger users.

• 2012 saw the use of well-known designers to create limited-edition packaging with quality/luxury associations: Oria Kiely for Method, Emily Hogarth with Nivea and, of course, Andy Warhol’s iconic re-imagination of Campbell Soup cans.

• From predictability to possibility, new, limited-edition flavors help expand a brand’s equity, while tempting consumers to try/purchase. In essence, limited-time/exclusive flavors feed the consumers’ desire for the new or novel while maintaining the security of a known brand. Consumers are more likely to try new flavors from a brand they already know. Consumers welcome the novelty of limited-time flavors, but also find it intriguing to think differently about a brand.

• Seasonal/holiday and event-related packaging saw huge growth in 2012 (such as at the Olympics). The calendar is an opportunity for brands to create relevance with consumers. For example, snack maker Morinaga released a new package for Dars chocolate bar (intentionally printed backwards), as part of a clever Valentine’s Day promotional campaign. The custom for Valentine’s Day in Japan is for women to present small, inexpensive gifts of chocolate to male coworkers at the office (that is, “giri choco” obligatory chocolate).

4. Shoppers manage their budgets

Packaging has the potential to fit with new shopping behaviors. The shopping eco-system, comprised of both shoppers and shops, has witnessed some dramatic changes.

Research reported by SymphonyIRI’s Time and Trends suggests that shopping behavior has changed in response to the economic situation. There is more “just-in-time” purchasing (such as fill-in or top-off trips) taking place, and less pantry loading. Retail formats have come to reflect these changes, with different trip types tending to be associated with specific retail formats (such as Tesco Extra for big trips, Metro and Express for Top-off trips). Many retailers have also been experimenting with smaller formats (Tesco Metro and Express formats, Walmart Express and City Target).

Smaller, easier-to-carry packs with smaller price points hold potential not only in Europe and the U.S., but in traditional trade retailers in many emerging markets (such as kirana-India, changarro-Mexico and sari-sari-Philippines). As shoppers continue to cope with economic situations that stretch their budgets, they are trying to manage their basket. Flexible packaging is poised to play a huge role in Asia in the smaller/traditional retailers—for snacks, bakery items and more—to help shoppers maintain their budgets.

5. Wellness: What shoppers seek

Making it easier for shoppers to find what they are looking for in the health and wellness category is the Holy Grail. The kinds of mental shortcuts shoppers are using—the information or clues shoppers are looking for when facing the shelf—are critical for finding their way through the crowded, ever-changing shelves of health and wellness products. Key to success is focusing on the information that is most crucial in the minds of shoppers.

• Calling out key benefits or ingredients makes it easier for the shopper to find the right product for their needs. Mintel’s GNPD database indicates that claims such as “suitable for” (allergen-related claims) and “natural/organic/bio” confer currency on products. Each of these represents nearly 25 percent of the claims on new food/beverage product packaging introductions in 2012 from around the globe. Moreover, ingredients like Vitamins A, C, E and antioxidants hold positive associations for consumers/shoppers.

• Recent examples include GlaxoSmithKline’s Ribena Plus drink concentrate (U.K.), with real fruit juice, fortified with vitamins A, C and antioxidant vitamin E; Rewe Frei Von Backmischung für Schoko Muffins (Germany), a gluten-free cake mix for chocolate muffins with chocolate glaze; and Danone’s Activia Peach Nectar (Brazil), with fruit and prebiotic fibers. The goodness, simplicity and naturalness of ingredients are important.

• Beauty and personal care shoppers are more focused on benefits (such as beauty enhancing, brightening, reduced redness and toning). There are other “clues” packaging can provide that serve as reasons to believe, and make it easier to “choose at the shelf”—free from, natural/organic ingredients, vitamin/mineral fortified, dermatologically tested, clinically tested or hypoallergenic. Some recent examples include Tony Moly’s Clean Dew Broccoli Sprout Cleansing Cream (South Korea), made with blueberry, tomato and broccoli extracts, or Drogerie Markt’s Alverde Naturkosmetik Natural Light Make-Up (Germany), light formula with organic papaya and agave extracts for moisturizing. Complicated products require a simple story!

Create consumer relevance

In conclusion, the opportunities identified are based on shopper/consumer trends, and represent not so much predictions, as opportunities exhibited in the marketplace. While packaging has long been one of the most efficient marketing/media vehicles (10 to 25 percent of the cost advertising, promotion or display programs), technology, innovation, changing views and behaviors of consumers afford large potential for packaging.

With so many claims vying for attention at the shelf, providing simple, easy to understand benefits on the package is a great aid to shoppers. It communicates that the brand “gets them.”

Finally, more than any other time, packaging is poised to play a heroic role in the building of brand and business. As our review has shown, packaging can play a larger strategic role in helping brands create relevance for consumers.