GLOBAL PACKAGING TRENDS 2019

As technology connects and innovates packaging in the virtual world, consumers demand eco-friendly solutions to clean up the real world. EDITOR’S NOTE CONTENTS

Welcome to Mintel’s 2019 Global CONNECTED PACKAGING CLOSING THE LOOP Packaging Trends where we define PAGE 4 PAGE 12 the challenges and opportunities that will impact manufacturers, companies, brands, and retailers in packaging markets around the world, over the coming months and years. David Luttenberger, CPP The four trends encompass broader Global Packaging Director themes of virtual connection, engineering innovation, e-commerce and sustainability, providing a full view of the global packaging industry in 2019.

Best wishes for the year ahead.

Dr. Benjamin Punchard REINVENTING THE PLASTIC-FREE Global Packaging PAGE 20 PAGE 28 Insights Director

Regina Maisevičiūtė-Haydon Global Food & Drink Analyst

2 | PACKAGING TRENDS 3 Multiple technologies are enabling brands to connect physical packaging to the virtual world.

Connected packaging is Connected packaging creates a seeing renewed interest, marketing opportunity, bringing driven by growth in ownership the engagement and interaction of connected devices of the online world to the worldwide and advancement shopper moment, potentially in technologies that can link influencing and driving packaging to the online world. purchase. In the home, such Brands today have a wealth of connections can increase brand options to connect virtually with engagement, increase product packaging, including QR codes use and add an experiential and other graphic markers, near element to product interactions. field communication (NFC), radio frequency identification (RFID), bluetooth, and augmented reality (AR).

4 | PACKAGING TRENDS CONNECTED PACKAGING 5 What's in it for the brand?

Connected packaging can enable differentiation of a product from its competitors on store shelves. Not only does this extend the potential for communicating product attributes, but linking consumers to an online space can create a direct connection to shoppers What's in it for handling the product. the consumer? Connected packaging also offers significant data collection Connected packaging can benefits. Many consumers are add value for the consumer willing to share their information by offering unique shopping when accessing online content, experiences, meeting enabling brands, and the consumers’ needs for agencies they work with, to interaction and personalising track consumer-pack interaction the shopper moment. in real time. This can be used in Such connections can a number of ways; for example deliver unique experiences to build consumer profiles, and enable omnichannel measure campaign performance shopping. This aligns with or to provide real-time feedback Mintel Trend ‘Experience on marketing activities. Is All’, which suggests that retailers' over-emphasis on Connected packaging speed, convenience and can be used to build the price has led consumers to brand story, provide specific crave experiences in bricks- product information and and-mortar spaces and deliver promotional offers physical places. and discounts.

6 | PACKAGING TRENDS CONNECTED PACKAGING 7 Trend in action

QR codes and 1 other digital markers

Digital markers are printed use of QR codes on consumer patterns that can activate an packaged goods (CPG) action, such as opening a launches. According to Mintel webpage on a smartphone. Global New Products Database QR codes are the most well (GNPD), almost 9% of all Malibu included an NFC tag on select that leads consumers to known digital markers, however, CPG launches in Asia Pacific promotional content such as drink recipes, a bar locator and an opportunity many brands or service featured a QR code, while 5% to win prizes (via The Spirits Business). providers have created their occured in Europe. However, own proprietary markers. These poor use of QR codes, including include Snapchat’s Snapcodes, a lack of on-pack signposting Near field Amazon’s SmileCodes, Coca- and lack of consumer benefit/ 2 communication Cola’s sip & scan marks and engagement, risks giving QR Spotify Codes to name a few. codes a poor reputation. Near Field Communication Each NFC-enabled tag (NFC) is a simple tag that can integrated into product Of all these digital be incorporated into packaging. packaging has a unique codes, it is QR codes By tapping an NFC-enabled ID. This enables product that have become the pack with a smartphone, the tracking and most widespread. In consumer can launch branded and allows interactions with 2018, Asia Pacific had content such as videos, or a single consumer. Delivered the highest regional simply be directed to product content can be used to build information. A benefit of NFC brand loyalty and be linked to From Nigeria, Fanta Fruit tags is that there is no need for e-commerce capabilities, such Twist Sparkling Mixed the consumer to download a as enabling re-purchase. Fruit Drink retails in a 330ml recyclable can specific app to their phone. featuring a Snapcode that links to exclusive Snapchat filters and lenses (via Mintel GNPD).

8 | PACKAGING TRENDS CONNECTED PACKAGING 9 Augmented 3 reality

The use of packaging-directed However, most examples of Final thought augmented reality (AR) allows AR on CPG packaging have brands to position the pack been used to provide fun, Connected packaging can be directly within a consumer’s interactive experiences. the link between physical and real world experience. AR This aligns with Mintel Trend, digital shopping worlds, giving has the potential to provide ‘Play Ethic’, suggesting adult brands a route to some control instructional guidance; for life is becoming busier and over how the brand and product example, demonstrating down-time is becoming is viewed online, as well as functional packaging attributes increasingly squeezed. With being able to deliver engaging can provide a way to compare less leisure time available, content and product-specific products for the shopper and consumers are devoting free information to directly influence aid the purchase decision. time towards fun, playful and purchasing decisions. even juvenile pursuits.

The Walking Dead Wine, by The Last Wine Company, builds on the popularity of the 19 Crimes wine app, which first brought augmented reality to wine (via YouTube).

10 | PACKAGING TRENDS CONNECTED PACKAGING 11 Consumers have been some packaging for years. But they are now demanding the ability to recycle more and to understand how recycling really works.

During the past year, content are still rare. Low proclamations by brands and availability of high-quality touting commitment recycled plastic and concerns to 100% recyclable materials over food safety are hampering or packaging that is 100% the use of recycled material recycled have dominated in food and drink. Brands industry headlines. The reality have opportunities to meet that few have yet to fully consumer demands for more consider is how, where and recyclable packaging. While who will be supplying and eco-responsible packaging can recycling these materials. be complex to engineer, the These are simple questions that way in which that responsibility don’t have definitive answers. is communicated to consumers on-pack must be simple, Though recyclable packaging straightforward, and actionable. claims have become common, claims to include recycled

12 | PACKAGING TRENDS CLOSING THE LOOP 13 What's in it for the consumer?

Recycling may be second nature to some, but the inconvenience of cleaning and sorting waste for recycling is a barrier for others.

In response, an increasing number of schemes are aiming to reward recycling behaviour. What's in it for For example, in Turkey, commuters can trade empty the brand? bottles for credit on Istanbul Cards, the city’s travel card. Greater clarity on which parts of can be In the UK, motorists receive recycled is the top factor that a 20p parking voucher for would encourage consumers every they bring to the to recycle more frequently. Just CitiPark in Leeds. 27% of global new beauty and personal care launches in 2017 featured an environmentally friendly packaging claim, with recyclable packaging accounting for only part of this (drink 27%, food 9%). which parts of packaging are recyclable, this is not Food packs that are made of universal. Products that are several different component more vocal about how easy materials are widespread, they are to recycle should win making them difficult or the loyalty of consumers by impossible to recycle fully. presenting a more proactive While some products show and environmentally a simple breakdown of responsible image.

14 | PACKAGING TRENDS CLOSING THE LOOP 15 Trend in action

Re-engineered 1 recycling

Recognising the lack bottle to switch materials from Envision of domestic recycling hard-to-recycle materials to the organized a special collection infrastructure, the American widely-accepted PET. High-quality recycled of plastics within Chemistry Council’s (ACC) 2 content a reality 50 kilometers Plastics Division has By also optimising the bottle of a coast line where marine announced new plastic resin design, Coca-Cola is able to OceanBound Plastic’s Envision debris was producer targets with the aim reduce annual plastics usage has organised a special apparent, and then recycled of recycling or recovering all by more than 1.5 million collection of plastics within 50 the material plastic packaging used in the pounds. The pressure-sensitive kilometers of coast lines that lie for hair care US by 2040. on the bottle now uses product bottles along known at-risk areas for (via Packaging an innovative that marine debris. Digest). Development of a new separates the label from the terephthalate bottle during the recycling Its first customer, ViTA, is using extremely limited and kept (PET) resin that can be process, further improving the the 100% recycled plastic for solvent-free so that it can be extrusion blow-molded on package’s recyclability. its haircare products. This repurposed as grey water for shuttle machines allowed Coca- disproves the long-held theory landscape irrigation. Cola’s 89oz Simply Orange’s Coca-Cola’s 89oz Simply Orange juice bottle vastly that recycled resin is low-quality improves its recyclability and presents a technical and can only be used in small Envision also works to “first” in plastics manufacturing (via Coca-Cola). percentages. ensure the distance between manufacturers and warehousing The resin used in the master is calculated precisely and used batch also carries the colourant, in a proprietary scoring system a key attribute for beauty and to best choose manufacturing personal care packaging. partners for the lowest possible Water usage in the recycling carbon emissions. and converting process is

16 | PACKAGING TRENDS CLOSING THE LOOP 17 Consumers campaign 3 for change

Launched in September 2018, Final thought the #PacketInWalkers campaign called on snacks brand Walkers With no option to ship to address plastic waste and off-shore encouraged consumers to use and out of sight, we are likely the brand’s freepost address to to see fast improvements in send their empty packs. recycling facilities, particularly in those countries that have This followed a petition on the relied on China as an end 38 Degrees website, signed market for waste. This will drive by more than 300,000 people, up capacity for high-quality asking Walkers and other recycled material and in the manufacturers to change the long term, potentially drive materials for their packets down cost. With consumers to one that is recyclable or, already thinking that recyclable even more preferably, a packaging is standard, non-plastic environmentally brands have an opportunity to friendly material. differentiate and ride consumer awareness of recycling issues Less than a month later, Walkers by being part of the solution and reacted by announcing the committing to using recycled UK’s first nationwide recycling material in new packaging. scheme for crisp packets. Consumers are sending empty crisp packets to Walkers to create awareness about their packaging, which is likely destined to spend years in landfills or worse, oceans (via @AinoKattelus Twitter).

18 | PACKAGING TRENDS CLOSING THE LOOP 19 REINVENTING THE BOX

As consumers increasingly embrace online shopping, branded e-commerce packaging and packaging strategies are changing the face of the industry.

Packaging and brand every link in the supply chain. professionals agree the rapid These challenges are being development of e-commerce met with initiatives that drive has had a greater impact on costs down and consumer the business, technologies, engagement up. supply chain, engineering, and design of packaging There are limitless opportunities globally than anything the for brand marketers to think industry has experienced in about the next generation the past several decades. of shelf presence, the “hero images” on retailers’ websites, Unlike efforts in the early 2000s and the “” experience to incorporate radio-frequency when a product and package identification (RFID) tags to is delivered. From an item-level packaging or the environmental perspective, 2006 roll out of the Walmart e-commerce is already a Scorecard, e-commerce poses catalyst for new ideas in challenges and opportunities at sustainable design.

20 | PACKAGING TRENDS REINVENTING THE BOX 21 Global E-commerce sales What's in it for reached more than US$2.1 trillion in 2017 and are expected the consumer? reach US$3.8 trillion by 2021, representing an annual growth In traditional retailing, a key rate of around 14% per year. component of purchase With total global retail sales of consideration is branding and an estimated US$15 trillion, messaging on the exterior of e-commerce has reached a a package. In e-commerce, market share of 14%, which is brands are learning that forecast to reach 22% by 2021. messaging and branding should be split between the secondary, Countries with relatively high – or shipping , and then and increasing – e-commerce shifting traditional decoration market shares are China, South and copy to the interior. This What’s in it for Korea and Indonesia, while the reversal of design elements most important countries for gives consumers a sense of the brand? e-commerce value sales are the delight and surprise when US, China, the UK, and Japan. receiving and opening an While consumers currently e-commerce purchase. prefer to buy groceries in-store instead of online, the convenience of buying clothing, electronics, and even beauty and personal care items online will eventually spill over into food, drink, and household products. That is exactly why packaging that meets the demands of e-commerce shipping channels must be designed and commercialised now.

22 | PACKAGING TRENDS REINVENTING THE BOX 23 Trend in action Rise in e-commerce 2 packaging

Procter & Gamble continues cup. Integrated into the bottom The Amazon to push the boundaries of panel are pop-up “feet” that 1 effect package innovation specifically enable easy dispensing when for e-commerce. In November placed on a flat shelf. What began as wrap 2018, P&G made a media rage – the over- splash when it introduced The uses 60% less plastic packaging and inability its super-concentrated liquid and the product uses 30% less to easily open products laundry care detergent in a water vs the comparable 150oz purchased online – has -in-box type carton designed plastic Tide Original . become wrap revenge. specifically for e-commerce During the past 10 which conforms to years, Amazon’s Amazon’s ISTA-6 e-commerce protocol. initiatives have eliminated more than The carton features a 244,000 tons of excess In 2017, Amazon estimated 305 million shipping punch-out card on the packaging materials, had been eliminated through its Frustration- side panel that hides Free Packaging program (via Packaging Digest). avoiding 500 million the spout mechanism, shipping boxes. and another on the top that hides a dispensing Amazon’s Frustration- packaging, enables more Free Packaging programs efficient fulfillment and have grown to include both streamlined distribution, Frustration-Free Packaging appropriate external package To eliminate excessive packaging, P&G designed (FFP) and Ships in Own branding for manufacturers, the Tide Eco-Box to ship Container (SIOC). The SIOC while the reduction in packaging efficiently and to cut down on plastic that is used in initiative, which produces materials and components the traditional Tide jug (via less waste than traditional respects the environment. Packaging Europe).

24 | PACKAGING TRENDS REINVENTING THE BOX 25 Packaging that helps 3 thwart porch piracy

To help combat e-commerce e-commerce package to create Final thought package theft – or at least a damage-resistant covering. conceal what’s in the box or StealthWrap eliminates the Consumers have varying padded mailer, Sealed Air has need for additional shipping expectations depending on developed StealthWrap – an and materials, and is whether the product ordered opaque wrap that shrinks to said to reduce billable freight by online is a household cleaning the dimensions of the primary up to 18 percent. product, an expensive piece of clothing, or a box of chocolates. But brands must consider that consumers will continue to equate the quality of the product and brand with the care taken to package and ship it.

Products can be handled 20 times or more in the e-commerce supply chain. Only through an established e-commerce packaging strategy can brands design packs for the worst- distribution scenario. StealthWrap provides a damage-resistant covering that obscures Leaks, dents, and spills will identification on primary packaging and has sustainable benefits reflect negatively on your brand, such as reduction in packaging (via Business Wire). not the e-tailer or shipper.

There are large financial, social, and brand equity gains to be made in the e-commerce packaging arena just by exploiting elements of package optimisation rooted in sustainability.

26 | PACKAGING TRENDS REINVENTING THE BOX 27 With the momentum behind a plastic- free aisle in every supermarket growing, brands need to consider what packaging solution can give them a place on the shelf.

As the scale of marine within its plastic-free aisle. grows, there is now a growing Cellulose-based plastic (usually consensus around the need cellulose acetate) is bio- for different attitudes to the based (made from plants) and material. In the UK, plastic biodegradeable, suggesting that pollution has become the the ‘right’ kind of plastic may most pressing environmental find a ready place in plastic-free concern, cited by 47% of UK aisles and stores. adults as the most important environmental issue. New opportunities such as plastic-free aisles, package- While the term ‘plastic-free’ free stores and alternative may appear to be a simple pack materials allow consumers one, there is no universal to actively make choices definition. For example, the about the plastic that is put lack of definition has allowed out in the world. Dutch organic supermarket chain, Ekoplaza to include cellulose-based plastics

28 | PACKAGING TRENDS PLASTIC-FREE 29 What's in it for the consumer? to be aware of the opportunity to remove plastic packaging Package-free stores offer loose, where this can be done without unpackaged products. The storage or usage issues. shopper is required to bring along their own and Even plastic-free packaging products are bought by weight. often includes plant-based This enables the shopper to plastics, showing the lack of buy just the amount of product clarity in the plastic-free call. they need, preventing food and Brands can address consumer packaging waste. Such stores confusion and leverage this typically focus on dry goods to educate about ‘good’ plastic and some liquid beauty and that preserves products, household products. offers convenience and can be recycled, vs ‘bad’ plastic that adds little to the What's in it for consumer experience. the brand?

The drive to plastic-free aisles shows consumer exhaustion with excess plastic packaging. However, few would want to lose the convenience and benefits plastic packaging can bring. Brands and retailers need

30 | PACKAGING TRENDS PLASTIC-FREE 31 Trend in action

Pack 1 switching

In the UK, a2 Milk has become in 100% recyclable (Forest the first mainstream dairy Stewardship Council) FSC- brand to make a switch away certified -based cartons. from the standard High-density polyethylene (HDPE) bottles While the packaging reduces widely used in this category. plastic use, the move does not The product will now be sold address recycling issues. In the UK HDPE milk bottles are widely recycled and a Earth.Food.Love is an organic, closed loop recycling Niche stores drive wholefoods, zero-waste shop that provides healthy eating system ensures plastic-free awareness 2 without the waste that packaging that all HDPE milk can bring (via The Times). bottles contain up The desire for packaging-free to 30% recycled retail can be seen in the recent content. Though opening of a number of ‘plastic- cartons often use free’, ‘packaging-free’ or ‘zero- FSC-certified waste’ stores. For example, material, use of Earth.Food.Love. is a zero-waste recycled plastic store recently opened by former is not common. Manchester United footballer Richard Eckersley. a2 Milk switched its packaging from single-use plastic to 100% recyclable FSC-certified paper-based cartons (via The Guardian).

32 | PACKAGING TRENDS PLASTIC-FREE 33 Plastic-free 3 private label

The UK retailer Iceland has the conventional black plastic. Final thought pledged to remove plastic According to the retailer’s packaging from its own-label consumer research, 80% of Consumer concern over products by 2023. The chain its customers say they would growing plastic pollution is made changes last year with support a supermarket that driving retailers to consider two new meal ranges launching decided to go plastic-free. plastic-free aisles in store. in paper-based trays rather than Though small ‘packaging- free’ stores are appearing, the inconvenience of bringing multiple containers means that larger retailers will most likely look to alternative pack materials over offering loose products.

Brands should act now, either to ensure a place in emerging plastic-free zones by switching to acceptable pack materials, or by engaging with the debate, clearly explaining the benefits of plastic packaging to their product, and addressing plastic pollution concerns with appropriate end of life In the commitment to reduce the amount of plastic waste that pack solutions. is devastating oceans, UK retailer, Iceland is removing plastic packaging from its own label products by 2023 (via Economia).

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