Packaging and consumer trends in 201829 December 2017
Mintel and Smithers Pira take Packaging Today through European and global consumer trends, respectively, outlining what they have seen and expect to come across in 2018. There is also direct insight into 2017’s packaging activity from GlobalData.
Governments and consumers have honed in on marine conservation, with recycled-packaging launches, ingredient bans and activism being key trends. The fashion industry also embraced change. June 2017 saw Stella McCartney announce her collaboration with Parley for the Oceans, which will see the designer use ocean plastic instead of woven or recycled polyester as part of the Ocean Legend project. Adidas has partnered with the group as well to use plastic waste collected from beaches and coastal communities in its Originals line.
An increasing number of brands will educate the market by using clean, safe and sustainable products that distinguish them from the competition, as more food and beauty companies seek to safeguard the purity and future supply of their ocean ingredients. As well as committing to using 25% recycled plastic in 500 million bottles across its hair care brands, Proctor & Gamble has partnered with TerraCycle to create 320,000 Fairy Ocean Plastic bottles in the UK. Perceived polluters may follow, especially with Coca-Cola responding to pressure by raising its 2020 recycling target to 50%.
However, conventional plastics will still be used to prolong shelf life. As a result, the market should expect to see more incentives and initiatives, including sponsored ‘reverse’ vending machines – which exchange used beverage containers for money – and government-backed plastic bag taxes. Plastic cup and cling film use may be stigmatised as pioneering brands innovate with soluble-pod packaging or dispense with it altogether.
High-profile hacks and data protection legislation have increasingly been making headlines. The current influx of QR codes, NFC chips and mixed-reality platforms enable companies to interact with consumers through packaging. Protecting the data that these tools collect is vital, as a new breed of consumers will hold on to their data to ensure that it is being used safely. They also demand something in return before sharing information.
With more consumers comes greater vulnerability, as shown by the hacking of Yahoo. In response, consumers are protecting themselves with software and behaviours they have learned from the private approach of younger generations.
Governments are providing protection, with the UK seeking to emulate the EU’s General Data Protection Regulation legislation, which will introduce major changes from May 2018, including compelling businesses to offer consumers the right to be forgotten before disclosing data. Mintel’s research reveals that consumer concern centres on data tracking and a company’s ability to safeguard information. In fact, two thirds of the British public worry about brands tracking their online activities.
However, consumers would exchange data in return for savings, discounts and offers. For example, more than half of UK consumers would share information from a smartwatch or fitness trackers with an insurance company to calculate the cost of a plan.
Wearable devices and smart TVs present major opportunities here, but companies will need to incentivise consumers to buy more products. According to Mintel, less than one in ten French, German, Italian and Spanish consumers own a smartwatch. The use of streaming TV devices remains low too, with ownership peaking at 13% in Italy and Germany, followed by 11% in France and 9% in Spain.
There has been an increase in systems that employ the internet of things. Stora Enso has partnered with Microsoft to gather data through NFC chips, which will enable it to gain consumer consent and guarantee security by storing information in the IT giants cloud platform. Bvlgari has developed the app Bvlgari Vault to protect personal data and passwords with a customised version of WISeID from Swiss eSecurity firm WISeKey. This presents packaging companies with an opportunity to engage brands with consumers through smartphones or mixed media on product packs. The most successful businesses will be the ones that can assure their customers that their data is secure and will not be misused. Two-step authentication has been used in several products, including the Malibu connected bottle, which required consumers to download an app before they could interact with the brand. This security feature ensures that individuals who are interested in the pursuing the campaign will apply, and only because they know that their information is safe.
Teenagers are increasingly being defined by anxieties surrounding their image, health and work. As a result, they search for brands that alleviate these pressures, build their confidence and help their future endeavours.
Pan-European studies revealed the economic, digital and emotional pressures that today’s youth face, and have demanded a response from consumer-facing brands. However, there is a growing understanding of the digital issues young people handle and how parents add to these. The University of Sheffield, UK, found that the time spent online by those aged 8–15 has doubled in the past decade, and spending one hour daily on social media reduces happiness by 14%.
According to WHO, online bullying, body image filters – such as the Samsung Galaxy’s Selfie Mode – and academic stress have added to the 18.0% increase in the global rate for depression over the past decade. In response, more mental health charities – including the UK’s Young Minds – are focusing on youth.
Teenagers expect brands to help improve their health and well-being, and to get involved in their education and development. They will call out packaging that promotes unrealistic beauty standards and opt for brands that embrace diversity.
Companies have the opportunity to provide solutions that empower this cohort through targeted marketing and packaging.
Consumers want more honesty
People want companies to substantiate their claims. The distrust consumers have in the government and media has spread to brands, which are being urged to share processes.
There will be greater accountability as a result of ClaimBuster’s AI-backed fact-checking services, the UK compelling companies with more than 250 employees to publish gender pay gap data and Germany’s Network Enforcement Act. These changes will trickle down to consumers, making more brands take an ‘open kitchen’ approach with their packaging and premises to emphasise truth and transparency.
Expect more brands to follow how FMCG companies – such as SC Johnson, Lush and method – talk about ingredients and sourcing. Other pioneers include fashion retailers like Everlane and Reformation, which provide price breakdowns and environmental scores. Online retail-behemoth Amazon even offers warehouse tours to its customers.
Consumers will expect transparency as standard, in relation to manufacturing and product efficacy. For marketing, the public are expected to see ‘behind-the-scenes’ through campaigns that put employees front and centre. In 2018, radical transparency is going to be a major trend that will allow consumers the power to question the actions of brands, thus increasing the importance of showing that they are trustworthy.
Smithers Pira expands on these trends with a report that values the global packaging market at $975 billion by 2018. ‘The Future of Global Packaging to 2018’ provides a five-year forecast of the worldwide market.
Growth is being driven by a number of trends that vary across numerous geographical regions. Increasing urbanisation, investment in housing and construction, retail chain development, and the burgeoning healthcare and cosmetics sectors are fuelling packaging demand in China, India, Brazil, Russia and other emerging economies. Better living standards and more disposable income in developing regions have increased the consumption of varied products, with the demand for packaging growing alongside this.
For economically developed markets, multiple social and market trends have been impacting upon developments in packaging over the past few years, including the rise in smaller households that have created more need for compact packaging; the growing requirement for convenience; and the rising number of men who are interested in health and beauty products.
According to the report, medium-term forecasts for food packaging indicate a potential growth rate of 3.4% on average by 2018, which will see it valued at about $284 billion. The figure for drinks packaging is expected to increase by 3.3% on average per year by 2018, reaching a value of $102 billion.
GlobalData’s consumer division reported that the figure (above) shows a side-by-side comparison of the global numbers for packaging units in 2017 against the 2018 forecast that has been broken down by material and market. Highlights include the 6% growth in glass packaging in the paints and stains sector; however, this is skewed by the small size of the market. With a rate of 3.4%, plastics that are used in flexible packaging are experiencing healthy growth, given the high volumes that are present in the market. The same can be said for rigid plastics that have increased by 2.9%.