DIDN’T YOU KNOW?IT’S ABOUT THE

PACKAGINGJason Arnheim, July 2015

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Contents

• PACKAGING TODAY AND IN THE FUTURE

• AN OVERVIEW OF SOCIAL TRENDS AND CONSUMER TRENDS

• REGULATION OF PACKAGING

• IDENTIFYING SOCIAL TRENDS

• IDENTIFYING CONSUMER TRENDS AND OPPORTUNITIES

• WORKING WITH YOUR PACKAGING COMPANY

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PACKAGING TODAY AND IN THE FUTURE

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The global packaging industry

Market growth 2.5% -3% in 2015

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2012 US$431bn

2014 US$453bn

Global demographic changes in rising demand for processed foods

Where is this all heading and what do we do about it?

What do we look for when developing packaging solutions that fit?

Where do we begin?

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The role of packaging

WHY IS PACKAGING SO IMPORTANT?

CORE FUNCTIONS OF PACKAGING

• Preserves the integrity

• Protects its contents

• Promote, inform, educate and advise

ADDITIONAL FUNCTIONS OF PACKAGING

• Convenience

• Environmental

• Provision of regulatory information

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The role of packaging

PACKAGING TYPES

The are three key categories of packaging:

• Primary Packaging

• Secondary Packaging

• Tertiary Packaging

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Consumer trends and their influence on packaging

Understanding consumer trends and insights is vital for packaging suppliers, brand owners and manufacturers. This will be vital as it will:

• Help to identify relevant packaging opportunities to meet consumer needs and challenges

• Help guide packaging machine investment strategy and capital expenditure

• Help guide food and beverage manufacturers in their machine and packing investment strategy

• Influence and develop strategic business partnerships and collaboration between packaging

suppliers, brand owners and food and beverage manufacturers

• Influence Research & Development (R&D) project investment into new forms of packaging

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The future of the packaging market – an overview

• The consumer packaging market is a relatively strong market as it is able to benefit from the rise in demand for consumer goods worldwide.

• As long as the global economy continues to grow the packaging market will also continue to grow.

• It is important that the packaging market grows in order for packaging innovation to develop to meet consumer needs. Understanding consumer trends and insights will become ever more popular to identify specific consumer packaging opportunities.

• A growing packaging market will also mean manufacturers will be able to invest in developing new packaging materials and designs to meet the needs of the changing consumer.

• More advanced packaging materials will be used in packaging such as nanotechnology and smart-packaging.

• Packaging solutions will need to continually adapt to meet changing consumer needs and challenges. A greater focus will be on sustainability, recycling and added-value packaging that bring tangible benefits to the consumer.

• Technically smart packaging will be an important growth sector in packaging, together with innovative design that will be central to moving the industry forward.

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AN OVERVIEW OF SOCIAL TRENDS AND CONSUMER TRENDS

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An overview of social trends and consumer trends

• Success within the consumer goods market is heavily reliant on delivering what the consumer wants, when the consumer wants it, where and how the consumer wants it.

• Social Trends are important to capture the bigger picture trends that ultimately describe human behaviour.

• Identifying Consumer Trends and analysing these unique insights will provide us with structure, clarity and perspective in understanding consumer behaviour.

• Understanding Consumer Trends and the packaging opportunities that these create will not only help shape the future of packaging, but will help packaging and FMCG manufacturers develop investment strategies for packaging solutions.

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Process of identifying future consumer trends and opportunities

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SOCIAL TRENDSGuiding Trends that describe human behaviour.

MEGA TRENDSTrends that influence consumer behaviour and drive change across the consumer packaged goods industry.

RETAIL ENABLERSEnablers that bring trends to life and utilise opportunities that are created in the marketplace via Advertising, Channels, Packaging, Social Media and products.

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Social trends - YOUNIVERSE

Oreo – Oreo Cookie brands campaign features personalised emojis

Click Here

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Social trends – Better Business

Kit Kat Chocolate Bars - Rail fares paid with candy bar wrappers

Click Here

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INDIVIDUALISM & EXPRESSION

OPPORTUNITIES

• Develop innovative products that are aimed at those consumers who have allergies or intolerances towards specific ingredients i.e. gluten-free alternatives that meet the health and lifestyle needs of consumers.

• Personalise products so that they that are aimed at a specific target audience i.e. Occasion specific, demographic specific, need specific or attitude specific.

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Smart & Connected

OPPORTUNITITIES

• Social networking is being used more and more by consumers to share thoughts, opinions, and publishing textual, audio / visual content (influencing anything from product name to package design).

• Consumers adopt the mentality that technology will make their lives easier and more comfortable. Therefore emphasising these benefits in association with new products and services will increase the chances of success.

• The increase in smart shoppers, will mean opportunities will increase for manufacturers to better interact and stimulate consumer demand.

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REGULATION OF PACKAGING

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Packaging – in the news

• SMH/The Age – 29/3/15

• Green group intensifies calls for ban on nano-materials in food and packaging

• Read more: http://www.smh.com.au/national/health/green-group-intensifies-calls-for-ban-on-nanomaterials-in-food-and-packaging-20150329-1m96c7.html#ixzz3gQiUGYzt

• SMH/The Age – 26/8/14

• New food packaging could be toxic and should be regulated, says Friends of the EarthRead more: http://www.smh.com.au/national/new-food-packaging-could-be-toxic-and-should-be-regulated-says-friends-of-the-earth-20140826-108go1.html#ixzz3gQinbBam

• Herald Sun – Jan 2015

• Sizing up food packaging: Cutting through the marketing mess at the supermarket

• http://www.news.com.au/finance/money/sizing-up-food-packaging-cutting-through-the-marketing-mess-at-the-supermarket/story-fnagkbpv-1227190767479

• Herald Sun – 27/8/14

• Photos appear to be packaging of new iPhone 6

• http://www.news.com.au/technology/photos-appear-to-be-packaging-of-new-iphone-6/story-e6frfrnr-1227038071371

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Packaging – in the news

• Two separate packaging size class action lawsuit were filed in New York federal court on Thursday against Procter & Gamble Co. and Unilever alleging the companies’ brand-name deodorants are sold in oversized packaging, purposefully misleading consumers into believing they’re getting a fair deal.

• Unilever and P&G manufacture and distribute popular brand-name deodorants such as Axe, Degree, Old Spice and Gillette, which are allegedly sold in oversized packages that do not contain the advertised amount of deodorant product.

• According to the Unilever class action lawsuit, “The Products come in 2.7 ounce sticks and have non-functional slack-fill in violation of the federal Food and Drug & Cosmetic Act. … The size of the container in comparison to the actual product makes it appear to the reasonable consumer that the consumer is buying more than what is actually being sold.”

• The plaintiff suing P&G has made similar allegations regarding Gillette and Old Spice products packaged and sold in 2.6, 3.0, and 3.2 ounce containers with non-functional slack-fill.

• Some slack is, of course, is expected in deodorant products, but according to the P&G and Unilever class action lawsuits, the packaging of these products is deceitful and misleads customers to believe they are receiving more product than is actually included in the packaged materials.

• For example, the P&G packaging size class action lawsuit claims, “The 2.6 ounce Product is sold in a container which is approximately 5 ¼” in height and approximately 2 ½” wide. The actual size of the deodorant stick of the 2.6 ounce Product is approximately 2 ½” wide and 2 ¾” long.” This means that according to the specific allegations over Old Spice and Gillette and the nearly identical allegations filed against the Axe and Degree manufacturer, P&G and Unilever are selling products in packages that only contain half of the containers dimensions.

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P1034

• FSANZ is undertaking Proposal P1034 to assess whether there are any unmanaged public health and safety risks relating to chemical migration from packaging into food (CMPF). If any issues are identified, FSANZ will determine how they can be managed through either regulatory and/or non-regulatory means.

• (Query – how does this link to the 2010 survey?)

• Await outcome as to whether recommendations include increased regulation and focus on CMPF

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FSANZ 2010 Survey

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Migration tests, 65 food and beverage packaged in

glass, paper, plastic and cans

Results – no significant migration from packaging into the 65 tested food and beverages other than ESBO detected at low levels and well below limits set by the EU and no health and safety risk

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Food Standards Code

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Standard 1.4.1 – contaminantsStandard 1.4.3 – food contact materialsStandard 3.2.2 – food safety practices

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Australian Consumer Law

• Products must be of acceptable quality, that is:

• safe, lasting, with no faults

• look acceptable

• do all the things someone would normally expect them to do.

• Acceptable quality takes into account what would normally be expected for the type of product and cost.

As a consumer, you may have the right to a refund if a product is unsafe.

Recalls

If a product or service presents a safety risk or is non-compliant with a mandatory standard or ban, it may need to be taken off the market or ‘recalled’.

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Working with your packaging company (not against)

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Pillars of technical design and innovation

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The six key pillars of packaging innovation include;ConvenienceShelf PresenceCostSafetyFunctionalitySustainability

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Working with your packaging company

• Combine the innovation and insights together

• Use the resources of your packaging company

• This may include global insights/access

• See your packaging company as a partner

• Put in place the required confidentiality regime

• Consider joint development, with appropriate market advantages

• Keep your packaging company up to date on any consumer issues with packaging – so issues can be identified and hopefully resolved

Working with your packaging company….

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