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The Power of Packaging: 2018 State of Industry Report

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The Vital Role Packaging Plays in Brand Building

Now more than ever packaging plays a vital role in determining the success of a brand. According to a recent survey of BRAND Packaging readers, companies plan to invest more resources in packaging-related design, marketing and materials this calendar year. Welcome to the 2018 State of the Packaging Industry Report.

The poll garnered responses from accomplished professionals with key roles in a variety of consumer packaged goods sectors. Seventy-six percent of survey participants have more than 10 years of industry experience and work in a cross-section of packaging sectors including development (29 percent); design (22 percent); corporate management (20 percent); sales and marketing (14 percent); engineering (4 percent); logistics (4 percent); and production (2 percent). The vast majority of respondents—84 percent—believe that the role of packaging in brand building has increased in the past two years. That’s an increase of 15 percent compared to last year. This uptick is an indication of the growing power packaging has when introducing, establishing or expanding a brand. Over half of survey respondents plan to allocate more resources to marketing and design-related services in 2018.graf1

Soaring Sales Anticipated

With U.S. consumer spending continuing to rise while inflation retreats, a whopping 98 percent of those participating in the survey expect an increase in their company’s overall sales this year. Two percent anticipate no change and not one respondent expects a decrease in sales this year.

The Competitive Advantage of New Technology

Readers cite product innovation and time to market as the top two factors that will give them a competitive advantage, and new technology is crucial for both. Specifically, the use of 3D printing is mentioned as the innovation that allows for more design options and faster results.

“Being a small company, new technologies benefit us by being able to do more things with packaging at a smaller run quantity,” says one survey respondent. “3D printing improved digital print technologies allow for faster prototyping,” confirmed another. Yet another says, “[3D printing is responsible for] making designs more complex in terms of effects like foiling, embossing and heat shrink.”

Challenge & Opportunity

Despite the benefit of new technology, there are still challenges to address. Along with the rising cost of packaging raw materials, respondents say developing innovative package designs that connect emotionally with customers is a challenge perceived by close to half of respondents. Paula Grant, founder and CEO of the design agency Flood Creative, explains how consumers shifted from being product driven to story driven, “We used to say we have three seconds to grab someone at shelf, but now with social media it’s not just about what you’re buying now, it’s about what you’re buying into.”

Social media may be the platform to tell the story but e-commerce is how to sell it. With online transactions increasing, readers confirm it will impact packaging operations as well. “It brings new challenges to packaging as it now has to survive in environments and protect the product in ways in which it was not originally designed.” Others view it as an opportunity to increase sales by saying e-commerce “broadens our market” and allows companies to “reach across the globe for a larger client pool.” E-commerce has also impacted the role of design with one reader confirming, “Due to the rise in e-commerce sales, we plan to clean our designs to make them more e-commerce friendly.”

Sustainability: from Trend to Necessity

Not surprisingly, 57 percent of readers cited sustainability and recyclability as the top packaging trend; other green-themed mentions were: BPA-free, less Styrofoam and a reduction in plastics. Nearly 60 percent of respondents’ companies put initiatives toward sustainability efforts. Manufacturers of plastic packaging for the CPG industry are taking notice and are working to address environmental concerns. For example, Ohio-based TechII, Inc. told BRANDPackaging, “Tech II’s packaging doesn’t have to be separated prior to going through the recycling stream. Our T-IML labels are made of the same material, polypropylene, as our containers, so the consumer can simply throw their used package into their recycling bin without the need to separate the label from the container.”

Additional branding and packaging trends mentioned by readers include:

Branding Trends

  • 3D printing
  • Emphasis on lifestyle and health-focused packaging
  • Growth in private labels
  • Disruption on-shelf
  • Homemade and/or hand-designed brands
  • Social media influence

Packaging Trends

  • Convenience
  • Lightweight packaging
  • Transparent packaging
  • More flexible packaging
  • Pouches and resealable packaging
  • Compartment packaging, i.e. snack pack trays
  • Tamper-proof

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Primary Material: Paperboard still top among materials

Paperboard is still the top material for packaging needs, comprising a 49 percent share of usage among all types of packaging. That’s a 10 percent increase from the previous year. The growth is likely attributed to the rising demand and use of biodegradable packaging materials. Thermoformed plastic products and flexible packaging received an equal number of mentions as the next most-used materials. The remaining respondents cited glass and metal as the material used least.

Category on the Rise: Pet Care

The number of respondents representing the pet foods category rose to 20 percent, an increase from 9 percent a year earlier. According to analysts, the U.S. pet food market was valued at over USD 24.60 billion in 2016, is expected to reach above USD 30.01 billion in 2022.

Pamela Long, director of client services at the design agency Little Big Brands agrees, “We’ve definitely seen a surge in pet-related brand activity; from elevating existing brands, to healthy activity around new brand creation and innovation. Even companies out of category are looking at how they can break into the market. It’s no surprise as the shift in thinking of Fido or Fluffy as a pet, to instead an almost-human family member, has spawned a proliferation of new products and the ability to up sell the consumer. And just as we’ve seen companies scrambling to find relevance in the perimeter of the grocery store, the opportunity exists to capitalize on healthy eating for pets, which pet owners translate to a better quality of life and longevity. Another similarity we are seeing is the greater need for pet companies to practice transparency. Pet owners are smarter than ever in terms of the products they are buying and they are looking beyond cute graphics and fun flavors to proven functional benefits. They want real ingredients, a clean production process and company values that align with their own. For brands that understand this, there is unlimited potential.”  

Images and Article source: https://www.brandpackaging.com/

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