Trying to ride out the transformational changes ahead by hunkering down will not work. In fact, a few are about going back to the basicsfor example, retraining the talent base to fill critical capability gaps in sales and procurement. Our research on the last recession found that some companiesthe resilient ones CEOs of packaging companies should address the six moves holistically and in combination. Most common in food packaging to enhance shelf life of food. Visit our updated, This website requires certain cookies to work and uses other cookies to help you have the best experience. In the next few years, ship-ready packaging In order for sustainability in packaging to take off, waste collection, recycling systems, and technology would need more improvement to support the changes in materials and disposal methods needed. We strive to provide individuals with disabilities equal access to our website. Those companies where termed resilients. See Martin Hirt, Kevin Laczkowski, and Mihir Mysore, Bubbles pop, downturns stop, McKinsey Quarterly, May 21, 2019. will probably become a must for brand owners to manage cost and sustainability pressures. Meanwhile, as a result of this pressure, we now see stronger efforts to commercialize packaging innovations, as well as better marketing of their performance (for example, the carbon footprint printed on packages). Nevertheless, these changes will also offer real Throughout the year, Berlin Packaging tracks consumer insights, product trends and packaging innovation to better understand what is happening in the market. Pricing excellence: Recapture inflation and use it to capture margins. var axel = Math.random() + ""; Enhanced Brand Transparency: Customers thrive to make authentic connections with brands that practice transparency. These substrate shifts will return, but now with a larger pallet of available materials, both new and old. While there are still barriers in place around infrastructure and education, there is no doubt that strides are being made by both businesses and consumers. So is innovation, including new business models and capabilities. In addition to having a sustainable product portfolio, they should accelerate their programs to reduce greenhouse gas emissions both in operations and throughout the supply chain. Each of the three eras we identified (Exhibit 1) has been characterized by major changes in consumer behavior (factor 1), which promoted innovation and the development of new packaging products (factor 2). It can be ready to ship with minimal added transport and protective packaging. Change often emerges gradually and then accelerates suddenly. Although heightened pressure for sustainability generated a growing appetite for innovation, large-scale commercialization was Waiting and riding out this transformational change is not an option. Counterfeit-proof Products: With fakes and knockoffs causing concerns on the market, smart packaging can weed it all out and deepen trust between brands and customers by monitoring their packaging and products with RFID sensors.This allows businesses to ensure no counterfeit products will weave their way to customers. Those companies where termed resilients. See Martin Hirt, Kevin Laczkowski, and Mihir Mysore, . Businesses can make drastic changes in sustainability, but they will not be truly successful if customers are not educated about impacts and their role. Melding Technology and Packaging Solutions, 6. Your go-to destination for custom packaging tips, newest packaging trends, and inspiration. The great financial crisis toward the end of the era had a negative impact on packaging consumption and further accelerated the shift toward plastic packaging to manage cost pressures. As alluded to earlier, a large part of sustainable packaging design is actually in customers hands rather than businesses. Above all, as new regulations emerge in response to global consumer concerns, greenwashing The best way to balance sustainable packaging and consumer demands is to think about different informational needs and have something that caters to each type of person. All Rights Reserved BNP Media. Therefore, fully recyclable packaging is being pushed by consumer demands and many businesses are already taking steps to implement new designs around recyclability. Businesses have been left with few choices as they are sealed to high shipping expenses and contracts in turn leading businesses to pass this expense on to the customer. However, it is safe to say that the packaging industry is taking some pretty big steps in 2022 to serve consumer demands and increase packaging efficiency. By cultivating a sense of trust and community with your customers, you can produce packaging designs that properly represent your brand and product. Smart packaging adds functionality, durability and convenience to not only your packaging but products too. 3. Each era has been characterized by large changes in consumer behaviorchanges that brought into existence new packaging products and other innovations that ultimately led to new corporate and value chain structures. This is why businesses are trying to take more ownership over the steps that need to be taken for sustainability to become an attainable attribute for their packaging. We'll email you when new articles are published on this topic. Significantly, as these three eras unfolded, the proliferation of digital devices and social media sped up the pace of change and influenced the type of disruption. Something went wrong. Winners should identify and move into the most attractive segments by tailoring a granular market approach. For instance, if you want a simple design, use a single color for the background and bold, huge font for the product name. Design, CMS, Hosting & Web Development :: ePublishing. 3. Digital vs. Raster vs Vector: Which to Use for Packaging. It will be important for innovative products to be not only more sustainable but also less expensive, so packaging converters will probably have to consider incorporating new materials. You can update your choices at any time in your settings. Sustainability and digital (particularly e-commerce) are the megatrends shaping this era (Exhibit 2), which will be the most disruptive so far, creating uncertainty, challenges, and opportunities. Trust & TransparencyConsumers want to know as much as they can about the brands theyre investing in. Please email us at: Coca-Cola: The people-first story of a digital transformation, Americans are embracing flexible workand they want more of it, The potential value of AIand how governments could look to capture it. The go-to academic resource for packaging, 1. 2. While recycling has been the main topic of discussion in the emergence of environmentally conscious consumers, there has been an overwhelming increase in awareness of recycling, which is always a good thing. Nevertheless, these changes will also offer real growth opportunities for organizations pursuing the right focus and actions. First, companies will increasingly focus on growth drivers and spin off noncore businesses into new stand-alone entities. We also expect that emerging business models and technologies for reuse and refilling will gain further acceptance and traction. Millennials and Gen-Z frequently only purchase from genuine brands. Although digital printing may have a reputation of being lower quality in comparison to offset printing, smaller designs like logos, patterns or shapes can benefit from digital printing as the quality difference is not exceptionally noticeable. Capital allocation is alreadyand will increasingly bebased on the sustainability and performance of businesses that will be focusing their attention through three lenses: decreased leakage, improved circularity, and a reduced carbon footprint. Talent: Attract, retain, and retrain employees, and get the return to work right. Toward the end of the period, awareness of sustainability rose significantly: consumers began to turn against the leakage of packaging into the environment, and action to curb this problem became more common. Submit a Request for Proposal (RFP) to automation suppliers of your choice with details on what you need with a click of a button. Please click here to continue without javascript.. While there are many measures in place to support sustainability initiatives, it still cannot upend the dependence on plastics. This is unfortunately not only true for their products, but their custom packaging too. For mono-material sustainable packaging design to be successful, alternatives need to be looked at on a small and large scale to understand whether packaging quality is impacted and the net environmental impact before switching over completely. generated excess total shareholder returns (TSR) during the downturn and the recovery. In order to verify that goods and trademarks are real, QR codes have become crucial. The advantages of such a production system include a maximum return on investment, time efficiency, and increased customer loyalty. 2. However, with so much noise and information being spread online, things can become a little blurry. Bioplastics and paper have long been touted as the necessary alternative for plastics, but as more research comes to light about bioplastics, environmentally conscious consumers are actually starting to question the impacts that bioplastics have on the environment. They will continue to shape the business, and we expect that two of themsustainability and digital (particularly e-commerce)will create significant challenges for industry leaders, as well as once-in-a-lifetime transformational opportunities. By closing this message or continuing to use our site, you agree to the use of cookies. Policy makers reacted to the public outcry with a variety of responses, such as the European Unions single-use directive, Sustainability: Invest where it matters to consumers and regulators. Creating different channels such as websites, inserts, leaflets, and other materials can go a long way in helping customers understand their role in the process. The unboxing experience and brand differentiation are the main driver to maintaining a strong brand narrative that customers remember. Especially with the pandemic leaving lingering effects worldwide, customers are looking for brands who can monitor and ensure the product they are purchasing and consuming are sanitary and havent been tampered with. The transformational changes of the immediate future will challenge many packaging players. By closing this message or continuing to use our site, you agree to the use of cookies. Connected packaging is the perfect way to give customers more insight into products while also keeping them safe and protected through QR codes and quality control processes using Intelligent packaging a win-win. What now lies in store for the packaging industry during the next normal up to 2030? This era began with the uncertainty and disruption of the great financial crisis. Although most customers report wanting easily recyclable packaging, there is less data on whether consumers actually follow through after receiving the packaging. Directive (EU) 2019/904 of the European Parliament and of the Council of 5 June 2019 on the reduction of the impact of certain plastic products on the environment, European Commission. Directive (EU) 2019/904 of the European Parliament and of the Council of 5 June 2019 on the reduction of the impact of certain plastic products on the environment, European Commission. Tech Takeover Technology is increasingly being used to help brands provide unique and interactive user experiences for their customers, and when it comes to packaging, this can include features like virtual and augmented reality (AR) and smart labels. It can be ready to ship with minimal added transport and protective packaging. to build resilience. We therefore In 2022, manufacturers have found a way around this by creating sustainable packaging materials that consist of just one single substrate. However, the truth is, businesses will attempt to make environmentally friendly changes to their packaging materials like opting for kraft paper boxes rather than plastic yet use coatings and inks which completely change the materials recyclability. By visiting this website, certain cookies have already been set, which you may delete and block. Growth: Win by identifying granular pockets of opportunity. On-pack communication about product attributes, formulation and origin is increasingly important to give consumers confidence in their purchase. Like with reuse, there is a certain shift in mindset needed which is slowly becoming more common in consumers. Most of the time, people purchase a product based on its packaging. Never miss an insight. to reach full recyclability and to increase their usage of recycled materials. While this is in fact beneficial for both customers and businesses, many smaller businesses have found it difficult to serve this demand, as reusable packaging tends to be more expensive to maintain. The demands taste and want of the public influence changes in packaging design trends. An important one is focusing on growth by focusing aggressively on resources: for example, doubling their reallocation to key growth areas. Safe & Sound Consumer focus on the connection between health and hygiene was heightened by the pandemic, which has in turn elevated the importance of tamper-resistant and tamper-evident packaging, as well as packaging that securely reseals to keep contaminants out. The impact was mixed for different end-use areas, however: food and beverages are necessities, and thus their packaging was more resilient to the downturn; industrial and luxury-goods packaging was more sensitive to it. Over the past few decades, the global packaging industry has enjoyed healthy growth, supported Furthermore, it is becoming more evident in 2022 that the use of non-sustainable coatings on paper based products changes the recyclability of most packaging.The aspect of sustainable coatings has only recently become a topic of conversation by eco-conscious consumers, pushing many businesses to strategize their packaging designs to meet consumer demands for fully recyclable products. This includes, but is not limited to, ergonomic forms that allow for optimized handling and dispensing, lids and seals that are easier to open and close while still being tamper-evident, braille markings, and more. Things like QR codes and concealed URLs give customers the opportunity to actively interact with brands more conveniently. Several category shifts can be expected over the coming years as cost curves come down in response to the higher production of new materials and as extended producer responsibility (EPR) and tax pressures make nonsustainable packaging more problematic. quite rare, partly because the packaging industry couldnt find cost-effective and functional alternatives to plastic. Unfortunately, bioplastics still pose many of the same risks as plastics, as they may be difficult to recycle or compost and it can take significant natural resources to create them in the first place. Visit our updated, Three Trends that are Reshaping the Packaging Industry, Shared Planet Leads Innova Market Insights Top Ten Trends for 2022, Four Key Packaging Trends Are Driving Innovation in Inks, New Generation Closure Designs for the Circular Economy. growth opportunities for organizations pursuing the right focus and actions. Procurement and the supply chain: Use strategic category management to get ahead of inflation and supply headwinds. Given the ongoing effects of the pandemic, consumers will continue to focus on safety and hygiene in 2022. Resilient companies have some distinctive characteristics in common, which enable them to emerge strong during the recovery phase. Despite the overall economic challenges, most global packaging players emerged strong from the crisis: they enjoyed steady growth from continued shifts in the choice of substrates (for example, retort pouches) and expansion in booming emerging markets. The other potent ingredient in this mix is digital, especially e-commerce. Digital and e-commerce: Embrace digitization (including the use of automation) in the front, back, and middle of processes. Please try again later. The following are the top six packaging trends to watch in 2022 according to the experts at Berlin: 1. If CEOs are to navigate this extraordinary disruption, next-generation industry winners must update and future-proof their business models and market approaches. In addition, it provides opportunities to improve When we think about packaging, its likely that there are many different components in place. (such as metal-, glass-, and paper-based) substrates increased. Inclusive & Accessible Accessible and inclusive packaging design has been gaining traction as more companies focus on making sure that their products are accessible to everyone regardless of age, disability or physical limitations. During this era, China surpassed North America as the worlds largest packaging market. We provide environmentally friendly packaging options and support you every step of the way when going green. None of these involves wholly new territory. Smart packaging does not refer to only one type of packaging; its actually an umbrella term for different types of technologically advanced packaging solutions. You must have JavaScript enabled to enjoy a limited number of articles over the next 30 days. The main challenges the packaging industry has faced are in relation with productivity, precision and quality control. Despite the shift in the economic center of packaging demand, European, Japanese, and North American companies remained in the industrys top ten, given the high number of megamergers in Europe and North America and continued fragmentation in emerging markets. Creating packaging designed for reuse requires thoughtful consideration of materials and structure that can withstand repeated washing and use without damaging the environment.It has recently become clear that products designed for reuse today tend to be bulky and actually incur a high environmental cost when created.For example, remember when metal straws were a huge hit to save the turtles?Well, it has come to light that the environmental cost of creating metal straws was just as harmful to the environment as disposing of plastic ones. By visiting this website, certain cookies have already been set, which you may delete and block. Apart from the separate control of each stage of product production, automated technology enables manufacturers to implement an all-in-one quality control platform that can be integrated with other systems and hardware. To understand the future, industry leaders must consider where the packaging industry is coming from. What Coating To Use For What Type of Packaging, How to Create Cost Effective Premium Packaging. Since e-commerce products may be handled up to three times more than those sold through traditional retail, e-commerce packaging has its own unique design, logistical and even brand design considerations. Connected packaging: designed for customer and logistics purposes. Consumers are becoming much more aware of the sustainability of packaging. Browse our Buyers Guide for packaging equipment, materials, supplies and services in the the flexible packaging industries, along with converters! The packaging industry is still in the early stages of digitization, but we expect it to become a clear priority and an important value creation lever, particularly in the current context of volatile raw-material markets and increased protectionism and trade policies, because digital can make supply chains transparent and promote excellence in procurement. This consumer trend has pushed many businesses to design their packaging and products with the purpose of reusing it after purchase. LinkedIn and 3rd parties use essential and non-essential cookies to provide, secure, analyze and improve our Services, and to show you relevant ads (including professional and job ads) on and off LinkedIn. While some materials can be easily recycled, others cannot, making it challenging to create truly sustainable packaging. food safety and hygiene a sixth key industry-shaping trend, McKinsey_Website_Accessibility@mckinsey.com, awareness of sustainability rose significantly, increase their usage of recycled materials, a more balanced understanding of true sustainability, Several category shifts can be expected over the coming years, they will require real market making to succeed, packaging will be specifically tailored to it, still in the early stages of digitization, rebuild the portfolio through acquisitions while also restructuring costs. taxes on plastic bags, outright bans in many US states, and regulations on food service packaging in China. For example, some may just want a simple paragraph, while others may want more in-depth information around specific aspects. In the context of todays era of disruption, transformational change in markets, and increasing volatility, these are the six priority moves that industry leaders can use to create resilience, capture growth, and navigate transformational change.