Sustainability is becoming an increasingly important requirement in a traditionally innovation-driven packaging industry. In this interview published on www.interpack.com, Boris Planer, analyst and consultant for the retail and consumer goods sector, talks about how the packaging industry can respond to these demands.

Consumers are increasingly looking for orientation, safety, and values – reflected, among other things, in organic and regional products. What innovative approaches could the packaging industry pursue to meet these needs while also providing sustainable solutions?

The desire for greater sustainability comes not only from consumers and legislators but also from retailers. Both full-range retailers and discounters now attach importance to being perceived as companies that “stand on the side of good” and make sustainable decisions for their customers. This demand is increasingly being brought to the packaging industry directly by the retailers themselves, particularly within the scope of their private label programs, and of course indirectly via branded goods manufacturers.

 

Private labels are gaining market share and are leading in packaging innovation. What trends and technologies do you see that could further drive this area?

As already mentioned, retailers are placing more emphasis on presenting themselves as responsible and sustainable companies. Their private label programs are an important communication channel for this. Where do the products come from, what are they made of, how are they packaged, are the packages easy to open and reseal, and are they perhaps even reusable? All of this shapes a retailer’s image and determines long-term customer loyalty. Retailers can also implement innovation quickly through their private label ranges. Packaging suppliers that can contribute to this with innovations and technological expertise will be preferred partners. In food retail, innovation of course means improved performance at competitive costs, e.g. through smart reduction of packaging materials.

 

Customers prefer to shop close to home in a smaller store - several times a week. The Saturday bulk shopping trip is becoming increasingly rare.

 

Awareness of planetary and social issues is growing. What creative packaging solutions do you see that support this shift and help consumers do the right thing?

Packaging plays a central role in the desire to act more sustainably, especially among younger consumers. It is expected that retailers, manufacturers, and the packaging industry will jointly take responsibility and drive solutions forward. Environmentally and recycling-friendly materials, less material with consistent product safety and stability, reusable solutions, packaging with a second life, easily understandable information on correct disposal: all these are topics that should be key. Not everything has to be reinvented; progress will often be evolutionary. Nevertheless, manufacturers and their packaging suppliers should keep in mind that competition for increasingly limited shelf space for branded products in the future will be decided, among other things, by visible contributions to the retailer’s sustainability agenda.

 

Boris Planer is a leading expert on the future of retail and an in-demand speaker at industry conferences. Image: PicturePeople

 

You speak of a combined product, service, and experience ecosystem (Retail 5.0): What role does packaging play in this new model, and how can it enrich the customer experience?

Packaging plays a small but important role in the modern retail ecosystem. Above all, it must be omnichannel-capable. That means it must be able to generate attention and sales both on the physical shelf and via a small photo in the online shop. There is still much untapped potential here. It must also be machine-readable and physically withstand the processes of automated warehouses and order picking in online retail. Ideally, smart packaging also allows for easy reordering of a product from home, e.g. by scanning a QR code with a smartphone, or provides consumers with information, inspiration, and recipes, again via a scannable code.

 

Market concentration remains a dominant trend. How can the packaging industry benefit from this development and hold its own in an increasingly concentrated market?

Market concentration in retail and the trend away from large stores toward local small formats will lead to consolidation on the manufacturer side. In particular, the trend toward small formats, but also the new experience-oriented store layouts and the rise of private labels, will lead to a reduction in physical shelf space for branded goods. For the packaging industry, this means that the number of their FMCG (fast-moving consumer goods) customers will decrease. At the same time, the packaging volume per manufacturer will increase. Manufacturers and retailers with their private label products will choose packaging suppliers that support their sustainability agenda and help ensure price competitiveness. Innovation will therefore remain essential within the packaging industry in the long term.

 

The trend toward small, local formats also results in a higher frequency of smaller purchases. What challenges and opportunities does this create?

The higher frequency of smaller purchases in local stores means that the share of impulse-driven decisions at the shelf continues to increase: customers are increasingly looking for inspiration in the store – what they might cook for dinner today, for example. Packaging should contribute more to making a product stand out on the shelf. This can be achieved through shape, design, color, and inspiration. Here, FMCG manufacturers have great potential to take steps forward together with their partners in the packaging industry.

 

The generation of AI natives has high expectations of retail and demands personalization. How can the packaging industry meet these expectations while offering innovative solutions?

Personalization in the mass-market of the grocery business will always be a difficult topic. All the more so, there are great opportunities for individual manufacturers in sales-promoting initiatives – such as eye-catching personalization of jars by a hazelnut spread manufacturer or of soft drink bottles. Retailers that have customer data through their digital loyalty programs could offer such initiatives for their private label ranges. Beyond the store and the online shop, social media distribution can today generate more attention than ever before.

 

Final question: What “key messages” would you like to share with the packaging industry –how can it better meet the needs and desires of end consumers and remain fit for the future?

In my conversations with the packaging industry, I often hear doubts about the willingness of customers to embrace sustainability. But I believe we are dealing with a long-term trend here, as it is rooted in deep emotional needs. The inflation phase of 2022 and 2023 confirmed this in my view. Regardless of that, retail and major market players are playing an increasingly active role in implementing sustainability strategies, and their influence on the industry is likely to continue growing. These developments definitely deserve attention, because the increasingly limited shelf space, especially for branded products, will be awarded more and more to brands that support a retailer’s green agenda. Contributing to the merging of the megatrends of sustainability and convenience will remain high on the agenda for a long time to come.

 

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