The continued weakness of the Spanish economy will drive innovation in reduced-cost packaging among discount retailers and private labels, according to market analyst Canadean.
Low-cost packaging innovation will allow discounters and private labels to continue to take share from brands by offering more competitive prices, the company says, with lightweighting and the use of alternative materials among the solutions that will minimise production cost for manufacturers in the highly price sensitive Spanish market.
With Spanish consumers continuing to reduce their spending, packaging manufacturers are under pressure to reduce costs and work with smaller budgets.
According to Canadean, changing the types of packaging materials used – such as moving from glass or rigid metal packaging to cheaper alternatives such as rigid plastic – will help to lower costs.
As a result, the company predicts, demand for glass packaging, as a more expensive material, will decline from 9.2 billion packs in 2012 to 8.9 billion packs by 2017.
As an example, Canadean cites Spanish supermarket chain Mercadona, which has introduced a new plastic triple pack for ambient fish and seafood products.
The retailer changed from the industry standard anchovy packaging metal can to a permeable plastic tri-pack, and as a result, Mercadona expects to see cost reductions of at least €0.22 per pack, meaning €3 million in savings annually.
“While consumers have always sought the best deals, the importance of value for money has been compounded in recent years by [Spain’s] persistent weak economy,” says Canadean senior analyst Ronan Stafford.
“This means manufacturers need to both evaluate current packaging to look for cost savings that can be passed on to the consumer, but also evaluate how effective their current packaging is at showing consumers that the product offers them good value for money.
“We expect to see more low-cost packaging innovation, particularly from Spanish discounters and private labels, as they look to communicate quality at competitive prices.”
