Consumer Packaged Goods
Sustainable Packaging: The Consumer Perspective
Staverton Park Conference Centre, 16 June 2011
Agenda
• Datamonitor’s Consumer Packaged Goods Knowledge Center
• A snapshot of the Datamonitor offering
• Sustainability, packaging and the consumer
• Do consumers really care? If so, to what extent?
• Product trends and packaging concepts
• Sustainable packaging innovation platforms and examples
Strategy & Planning
Consumer & Market Insight
Sales & Marketing
NPD & Innovation
A value proposition to synchronize the way you workThis presentation draws mostly on Datamonitor’s Consumer Insight research
• Assess new or non core categories• Interpret trends quickly• Market sizing/forecasting• Enhance market positioning
• Better meet consumer needs by understanding consumption locations, and occasions
• Evidence led insight
• Map competitive landscapes globally
• Refine marketing strategies • Protect/grow market/brand
share
• Stimulate ideation and inspiration
• Reduce risk for new product launches and increase the chance of success
Consumer Insight deliverables form the basis of this presentation
© Datamonitor
the home of Business Intelligenceinnovative deliveryexpert analysisquality data
© Datamonitor
New Consumer Insight (NCI):The Future of Sustainable Food and Beverage Packaging (DMCM4767)
DMCM4670, October 2010Report Slide Pack
2009 – all encompassing• Sustainable Packaging Trends: Consumer
Perspectives and Product Opportunities
2010 – sector specific• The Future of Sustainable Food & Beverage
Packaging• The Future of Sustainable Personal Care
Packaging• The Future of Sustainable Alcoholic Beverage
Packaging • The Future of Sustainable Household &
Laundry Care Packaging
Accessible in multiple formats:• CPG Knowledge Center
– Interactive online report – Full length pdf report– Abridged report ppt. slidepack© Datamonitor
the home of Business Intelligenceinnovative deliveryexpert analysisquality data
© Datamonitor
New Consumer Insight (NCI):The Future of Sustainable Household and Laundry Care Packaging (DMCM4770)DMCM4770, November 2010Report Slide Pack
Agenda
• Datamonitor’s Consumer Packaged Goods Knowledge Center
• A snapshot of the Datamonitor offering
• Sustainability, packaging and the consumer
• Do consumers really care? If so, to what extent?
• Product trends and packaging concepts
• Sustainable packaging innovation platforms and examples
Packaging and the ‘sustainability mix’…
NATURAL
Climate change
Biodiversity
NATURAL
Resourcedepletion
HUMAN
SOCIAL
Waste
Population growth
Wealth vs. Poverty
Urbanization Consumption
Democracy
Corruption
Education
Accountability
HealthEmployment
GROWTHEconomic Investment
CSR leadership
Pollution
Regulation
Local Global
New technology
• “Meeting the needs of the present without compromising the ability of future generations to meet theirs”
• About carbon, energy, materials, resources, processes and ecology; but it is also to do with ethics, responsibility/fairness
• Companies vary in interpretation– Some define it very narrowly– Some more broadly – Others lack any corporate definition
TAKEOUT: One of the most public battlegrounds over claims of unsustainable processes centres on waste and, specifically, on packaging
Sustainable packaging is going to exert more influence on your categories of interest
Sustainability is emerging as an industry defining issue for packagers and their customers
Packaging is inherently
environmentally harming
Sustainability emphasis among packagers and
retailers
Escalating consumer
concerns: it influences choices
Governments and legislation changes are
driving industry change
Widespread environmental concerns are driving the sustainability agenda, including in packaging
79% 82%
Protecting the environment is ‘important’ or ‘very
important’
Source: Datamonitor Consumer Insight Survey, July/August 2010
TAKEOUT: Consumers are engaged by environmental issues and packaging is a now a common target for criticism. It is an important ‘green’ issue…
Feel ‘fairly well’ or ‘very well informed’ about how behavior
impacts the environment
Products that are produced in an eco-friendly wayProducts that consume less energy in their production or use
8790
8491
8180
868281
7873
6369
5447
7670
6868
6367
6057
4458
4523
4235
22
Products that can be recycled or reusedProducts that generate less pollution in their production or use
Products that are made of recycled materials
Products that involve less packagingProducts that have a smaller carbon footprint
Products that are made of natural or organic materialsProducts that are made of fewer materials
Products that are certified as greenProducts that use innovative technologyProducts that are not tested on animals
Products that are made under Fairtrade conditionsProducts that are produced locally
Products that are handmade
Country with the highest percentage of respondents who agreed
Country with the lowest percentage of respondents
who agreed
What are green products? (share of respondents who agreed or strongly agreed)
Source: Boston Consulting Group, 2009
TAKEOUT: Sustainable packaging is still understood primarily in terms of its ‘back-end’ environmental impact.
But can be a first step in thinking about broader sustainability practices
Sustainable packaging is a consumer concern
“At times it does feel like packaging is becoming ‘the villain’, when in reality it is a small player in the overall environmental footprint of the product. However,
viewed through the lens of our consumers, packaging is the first
thing and also the last thing that they experience with our brands.
Therefore if it is important to our consumers, then it is
important to us”
Associate director, sustainability, for Procter &
Gamble’s Global Package and Device Development
60%Grocery products
have too much packaging
Source: Datamonitor Consumer Insight Survey, July/August 2010
Claim would lead to a more favourable perception…
The ‘sustainability advantage’: sustainable packaging credentials can lead to more favorable product evaluation
TAKEOUT: Packaging attributes can provide a positive halo. It can be used to genuinely inspire customers and enhance product/brand allure
REDUCED PACKAGING
57%
55%
RECYCLABLE/COMPOSTABLE
63%
62%
Better than the technology of Coca-Cola. “It's indistinguishable”*
Sustainable packaging ‘one-upmanship’ from highly consumer focused CPG companies…
Already working on the next generation PlantBottle packaging
2011 – World's first PET bottle made entirely from plant-based materials
2009 – First of its kind beverage package made from renewable sources
TAKEOUT: Every little bit means something in a ‘game of perception’. It can help tip the balance, especially when most basic needs have already been met
From oil-based plastics to bio-based plastics
Mainstream brands are bringing critical mass to the sustainable packaging movement
H.J. Heinz Co. will make its ketchup bottles using PlantBottle packaging.
An “industry first partnership”
February 2011
Parallels with how leading/
flagship brands have bought Fairtrade to the mass market
The likes of Cadbury and Nestle embracing Fairtrade through signature
brands has driven segment growth
Since 2009
TAKEOUT: Flagship brands will accelerate consumer awareness/concern
Retailers are in the ‘frontline’ when it comes to discontent about excessive packaging
TAKEOUT: As private label takes centre-stage in retailer strategy, large chains are looking at how packaging can support the marketing efforts
Milk bags represent a 'flagship product' for Sainsbury's as well as helping it to raise
awareness of its environmental credentials
There is a role for both retailers and manufacturers to be ‘ethical lifestyle enablers’: i.e. facilitating people to do things differently and better
28%
Retailers’ ethical policies exerts a ‘high’ or ‘very high’ amount of influence on where one does
MOST grocery shopping
‘Very satisfied’ with my personal efforts to protect
the environment
12%33% 9%
Grocery retailers have taken a ‘high’ or ‘very high amount of action’ towards being more
environmentally and ethically responsible
11%16%
TAKEOUT: Enable consumers to reduce environmental footprints by designing and stocking products that meet their core needs, but also conserve resources
Source: Datamonitor Consumer Insight Surveys, April/May 2009; July/August 2010; Datamonitor Green Consumer Survey, June 2010
Consumers are more sensitive to sustainable packaging issues and perceive grocery products to be over-packaged
68% 71% 52%
Agree that grocery products are over-packaged…
TAKEOUT: High frequency packaging use and disposal = increasing consumer awareness. Strive for a lower packaging to product ratio as a minimum
Source: Datamonitor Consumer Insight Survey, July/August 2010
Groceryproducts
Food & beverages
Beauty products
67%60% 48%
54% 51% 30%32%46%
16%18%
Household care/laundry
Alcoholic drinks
TAKEOUT: Influenced by visibility: the cycle of consumption through to disposal is typically more pronounced for food and beverages than other CPGs
Food and beverage products are perceived to be more over-packaged than most other FMCG items
Source: Datamonitor Consumer Insight Survey, July/August 2010
Heightened sensitivity to the environmental impact of packaging is influencing consumer behaviour
37%
If I see a product has too much packaging I will consider buying an alternative product…
36%37%
Source: Datamonitor Consumer Insight Survey, July/August 2010
37%‘Highly’ or ‘very highly attentive’ towards whether packaging is
environmentally friendly…
35%40%
40%
49%
TAKEOUT: Environmentally conscious consumers want to purchase high-integrity products in packaging reflecting their desire to ‘do their bit’
But the ‘really engaged’ segment is still comparably small…
18%Highly influenced by the amount of packaging when choosing packaged
food products…(June 2010)
21%19%
Source: Datamonitor Consumer Insight Surveys, June, 2010; April/May 2009
17%
Reduced packaging exerts a ‘high’ or ‘’very high’ degree of influence when making food and beverage choices…(April/May 2009)
27%26%
TAKEOUT: There is no guarantee that large segments will consistently choose more ‘virtuous products’. This is also influenced by awareness gaps
How much does the amount of packaging influence your choice of product in these categories? (share of global respondents)
8
7
8
7
21
20
21
15
18
19
18
20
17
16
16
24
Packaged food products
Household cleaning/ laundry products
Personal care/ beauty products
Alcoholic beverages
Very high amount of influence High amount of influenceLow amount of influence Very low amount of influence
…with little variance by sector
TAKEOUT: They are buying the product not the packaging. Standalone messages that packaging has been improved or reduced are not enough
Source: Datamonitor Green Consumer Survey, June 2010
TAKEOUT: But it must not be at the expense of the core consumption experience, just as Frito-Lay discovered in 2010. Improved sustainability benefits
MUST co-exist with other core functionality that consumers value
SUNCHIPS (US): Environmental benefits
compromised the consumption experience!
Don’t forget the bigger picture about how consumers talk about, and interact with, packaging
TAKEOUT: Multi-faceted expectations; consumers value packaging solutions that are practical, stylish, safe and environmentally responsible
Source: Hartman Group/Datamonitor
Environmental considerations are not a primary driver of packaging preference
TAKEOUT: Sustainability as a secondary consideration is apparent even when considering the ‘packaging mix’ more broadly. Consumers may buy brands with
'green' packaging, but ultimately they are persuaded by other factors
26
28
21
22
16
18
18
18
14
16
11
9
41
35
41
39
36
34
33
31
34
32
26
21
Preserving freshness (e.g. resealable)
Ingredient information
Clear instructions how to use the product
As an indication of product quality
Ease of storage
Protecting the product
Ease of opening
Whether it is environmentally friendly
Ease of carrying/transporting the item
Information about how product was manufacturedDistinctive or recognizable design
Fashionable/unique design
Very high amount of attention High amount of attention
In general, how much attention do you pay towards the following packaging functions/ benefits when choosing grocery products? (share of global respondents)
Source: Datamonitor Consumer Insight Survey, July/August 2010
Sustainable packaging concerns align well with consumers’ desire to ‘de-clutter’ = practical value too!
57% of consumers believe that, as a society, we need to consumer a lot
less to improve the environment for future generations
63% of consumers of
consumers perceived that living a less complicated lifestyle has become more important to them in the previous two
years.
Packaging which is more sustainable, due to being less excessive and less draining on resources, can be
a part of this important de-cluttering process.Additionally, with consumers becoming more
engaged by the sustainable packaging/waste debate, the environmental impact of consumer lifestyles is
becoming a point of personal reflection. Consumers will not sacrifice their standard of living, but they will
begin to feel more negatively towards and responsible for wasteful consumption and that which does not
contribute to a sense of a better quality of life.
49% of Americans, according to
a Harris Interactive Poll between July and September 2009, embrace
environmentally friendly behaviours out of a desire to reduce clutter in their
home
59% 54% 65% 59% 57% 56%
Source: Datamonitor Consumer Insight Survey, July/August 2010; National Geographic/Globescan ‘Greendex’, 2010
On a related note, be alert to the “damned if you do, damned if you don’t” reality
TAKEOUT: It’s going to feel at times like you cant win!
Reduced packaging in grocery products may
compromise product quality
20% 37% 37%
CONSUMER AMBIVALENCE
Source: Datamonitor Consumer Insight Survey, July/August 2010
Wasteful packaging Deficient packaging
• Packaging is an important green issue
• Think products are over packaged
• Take for granted functional roles
• Fails to protect = the reason not to buy!
INHERENTLY NEGATIVE PERCEPTIONS
Final thoughts regarding consumers and sustainable packaging…
Don’t overlook the issue,
tempting as it might be
• Sure, it’s rarely a primary purchase motivator BUT…• Packaging and packaging communications are the first and
last impression consumers have of many brands today• They think products are over packaged; not a good start!• The evident ‘value-action gap’ will be driven by lack of
awareness, rather than a lack of intent
Think of the ‘sustainability
marketing advantage’
• Sustainable packaging is a claim that can be physically substantiated, rather than other more dubious sustainability claims that still exist
• Ensure that improved sustainability benefits co-exist with other functionality that consumers value
• Don’t just meet consumer expectations; exceed them • Elevates the importance of sustainability in the packaging
‘mix’. Elevates the importance of packaging in the sustainability mix
Ultimately it is a journey: you must demonstrate how you are becoming progressively better over time
Stonyfield Farm takes website users through
the “sustainable packaging journey”,
highlighting the incremental
steps taken over 20 years as well
as what the future might
hold
NEXT: Andrew is now going to take you on an ‘innovation journey’ (after coffee)Consumer opinion ideas? Please share with me…
Source: www.stonyfield.com
Agenda
• Datamonitor’s Consumer Packaged Goods Knowledge Center
• A snapshot of the Datamonitor offering
• Sustainability, packaging and the consumer
• Do consumers really care? If so, to what extent?
• Product trends and packaging concepts
• Sustainable packaging innovation platforms and examples