This briefing explores the key trends defining the future of the packaging industry. Costs are keenly in focus given the inflationary environment; right-pricing and right-sizing the retail pack are essential to balance consumer affordability with brand profitability. Digital’s influence goes wide, from e-commerce to operating efficiencies to engaging with consumers. Sustainability remains the strongest and most enduring trend, underpinned by new regulatory interventions to mitigate climate risk.
This report comes in PPT.
Financial pressures continue in 2023 as high inflation increases packager and brand operating costs and equate to higher prices for consumers’ groceries. Pricing right remains important within the current realm of inflated input costs, hence brands’ strategic use of economy lines, private label and adapted pack sizing across categories and channels, to balance consumer affordability with brand profitability. Some stabilisation to current levels of volatility is expected as prices of key commodities fall, as seen in energy, after the 2022 price shocks.
Digitalisation will get more embedded across the packaging supply chain. The acceleration in e-commerce is here to stay, thanks to the consumer convenience and value for money it brings. E-commerce however poses a sustainability question about more packaging, an opportunity for innovation while avoiding in-transit damage/leakage. The efficiency afforded by digital tools from prototype work to production planning and remote-servicing will amplify their use. There is onward potential for QR codes, blockchain, NFTs and the like, from tracking recycling to bringing brands closer to consumers, in the metaverse.
Sustainability is the strongest driver of packaging change, evidenced by continuing redesigns with recyclability, recycled content and refill at their core. Refill is a hot topic, from retailer trials to regulations specifying use. Scaling is best to happen only where it makes sense, to avoid the unintended consequence of increasing footprint. Plastic, most used-material, is most targeted by regulators, to improve its circularity, requiring investment in recycling and re-use, to lose the material’s association with waste. Europe leads packaging’s regulatory charge. Far-reaching climate laws, global plastic treaties as well as corporate and consumer recognition of the imperative to tackle climate-related risks, will ensure unabating pressure on packaging.
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