Packaging innovation, like almost every other business activity, is designed to do one thing: increase the profitability of the business it serves. Be it a clever closure, a weight-saving new material or a supply chain tweak that takes trucks off the road, the ultimate aim is to either sell more product or to cut costs – or both.
But there are many ways to do that which respond to wider trends in business, retail and the world of the consumer. Every year, C MIC Packaging teams up with the largest exhibition organizer Canton Fair in China to survey the market and to find out what the biggest drivers are for packaging.
For millennials, quality and luxury are more important
Cost reduction has been the biggest driver over the past few years. Last year, more than half of all respondents stated that it was in their top two drivers for innovation in packaging. So hold on to your hats – it’s no longer alone at the top of the pile.
That’s because, on-shelf differentiation has come out as being just as important as cost reduction in the minds of packaging buyers and specifiers, with 43% of respondents picking each of the factors as being in their top two drivers. Quality enhancement, as last year, was on a par at 41.5%, slightly up on last year; while environmental performance was identified by 20.3% of respondents as being a top two driver, a slight increase.
What does this tell us about the market? There can be little doubt that there has been an explosion of fun in packaging in the last couple of years. Limited edition packs have multiplied. Millennials are currently an audience which can afford luxury items, while it will be still largely out of reach for Generation Z for some time. As the rest of the marketing world zeroes in on Generation Z, for the luxury brands sector Millennials are still the focus.
This should be a boon for the graphics side of the packaging design industry but it is also backed up by shifts in the industry’s technology base, not least the emergence of digital print as a high-volume production technology.
When it comes to printing presses, C MIC Packaging has the industry’s top technology Heidelberg digital printing machines, as well as traditional Japanese Komori presses to fit the affordable price, both in terms of the sophisticated requirements of printing images economically.
How to win in the fierce competitive
The fact that differentiation has come out equal to cost reduction also speaks to the ever-more competitive world of retail and the constant battle to maintain brand loyalty across multiple channels – hypermarket, convenience, online – as well as the jostling for supremacy between own-label and branded goods.
Profitability
Looking at the figures on how packaging can be used to give extra standout, some very interesting trends emerge. About 43% of respondents said they planned to launch special or limited edition packs in the year to come; 67% are planning personalized or versioned packs of some sort. QR codes on packs are set to be used by 86% of packaging buyers and specifiers; while a similar number, 92%, intend to create some sort of social media tie-in – for instance on Facebook, Instagram or Twitter, even Tiktok – with their packs.
Cost reduction
Cost reduction, of course, is still very much on the agenda. But its slight decrease hints at a growing economic confidence in the market. Elsewhere, the survey reveals that 72% of respondents increased their spend on packaging in the last year; while spend dropped for just 10% of respondents. Moreover, while in 2021 some 57% of respondents said their boards of directors would see packaging as expensive, that figure had dropped to 48% this year.
R&D, Sustainability and Innovation
Elsewhere, while sustainability has, for the last two years, dropped in importance in terms of packaging development and innovation, it seems to have continued to grow in importance in the businesses buying packaging.
Almost 82% of respondents to this year’s survey said that the sustainability agenda in packaging was more important than it was a year ago; the figure in 2021 was similar. Moreover, some 71% of respondents said that they intended to highlight the sustainability credentials of their packaging, such as recyclability or recycled content, to consumers in the year to come.
Surely the conclusion here is that while sustainability performance is an crucial factor for brand owners and retailers, it is – and this should come as no surprise – still less important that cost or getting the product into the consumer’s basket in the first place. Yet it is clearly still seen as a strong part of brand positioning.
Packaging Differentiation, An Important Factor
Essentially, that packaging is seen as important a part of the packaging mix as it ever was – if not more so. And the figures serve to underline the incredibly varied world, somewhere between marketing, operations, procurement and logistics, that the modern packaging technologist inhabits.
As a leading global packaging company in China, C MIC Packaging is dedicated to providing industrial solutions that enhance the safety, quality and convenience of products we use every day. In partnership with the most respected retailers, manufacturers and brand owners, we develop vital products that contribute to the lives of millions every day.
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