Packaging is changing, not just in how producers think about it, but also in terms of what consumers are asking for.
At the recent Packaging Innovations 2016 conference held at the National Exhibition Centre (NEC) in Birmingham, Martin Leeming, CEO of TrakRap, which produces secondary packaging solutions, discussed how consumer shopping habits are challenging the packaging supply chain.
In particular, Leeming examined the challenges facing the retail-ready packaging market as a result of shifting consumer buying behaviours within the UK food retail sector which has driven increased demand for convenience stores.
According to Smithers Pira, the retail ready packaging market is forecast to reach $63.4bn by 2017. The major driver of growth in demand for retail ready packaging is the development of supermarkets especially in emerging economic markets such as Asia. In 2012 the food sector accounted for 75% of retail-ready packaging demand and by 2017 the food sector is expected to contribute an additional 3.3 million tonnes of incremental demand for RRP products (source: Smithers Pira).
With increasingly busy lifestyles the traditional weekly shop at large supermarkets is diminishing, with consumers increasing choosing to visit smaller convenience stores more regularly. Therefore the UK retail industry is boosting its investment into convenience stores. According to retailpackagingmag.co.uk, the value of convenience stores will grow by 22% reaching £20.2bn by 2020. Packaging for fast-moving consumer goods has to keep up.
Retail-ready packaging for smaller convenience stores creates a certain set of challenges for the secondary packaging industry. Applying the same packaging formats which are used in larger supermarkets to the requirements of convenience stores is not efficiently viable as convenience stores have a much smaller stock keeping units (SKUs), typically stocking around 1500 SKUs, much smaller volume of shelf space and smaller storage areas, therefore the shift in consumer shopping habits and the need for smaller secondary pack sizes is forcing cost into the packaging supply chain.
Adapting secondary packaging for smaller shelf spaces can often lead to increased production costs, smaller packaging sizes requiring more accuracy during the production process. For suppliers this will usually mean converting the manufacturing equipment, improving print tolerances in areas on the packaging such as creases and folds as well as ensuring perforation and tear properties are satisfactory.
Packaging suppliers will often mitigate against increased production expense by passing rising costs on to their buyers.
Innovations in packaging design are often focused on primary packaging, with secondary packaging considered as an afterthought. However, retail-ready packaging and other secondary packaging types which are suitable for large supermarkets do not meet the specific needs of convenience stores and therefore future developments in this area will need to be able to offer solutions to the challenges which the food and beverage industry face - plus meeting sustainability initiatives, and minimising food wastage, which loom large.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.