Food Packaging: Trends & the Consumer Perspective

Western Packaging Association Margaret Angelovich

Western Region Sales Manager, Zip-Pak

Market Trends

iGeneration & Millennials are Changing the Grocery Shopping Experience ▪ Many supermarkets are shifting to become places where consumers can spend their leisure

time. In-store restaurants, cafes & bars are having appeal, particularly among younger generations. The likelihood to shop at a store offering an “experience” has doubled.

Source: Lightspeed/Mintel, Grocery Retailing, US, July 2018. Base: 1,983 internet users age 18+ who are responsible for grocery shipping in household

Consumers Want On-Demand Convenience

▪ Todays on-demand culture has influenced consumers’ definition of convenience– Renewed interest in “fresh

prepared” but not in spending more time doing it

– Quick fill-in shipping surpassed stocking up on food, reflective of more living and shopping in the moment

Source: Lightspeed/Mintel, Grocery Retailing, US, July 2018. Base: 1,983 internet users age 18+ who are responsible for grocery shipping in household

eCommerce – Small Market, Big Opportunity

▪ eCommerce remains a small portion of total grocery sales

▪ However, if the steady, double-digit year-over-year growth rates continue for the foreseeable future, online sales could be in the $100 billion range by 2023

Source: Lightspeed/Mintel, Online Grocery Shopping, US, August 2018. Based on US Census Bureau, Annual Retail Trade Survey

Packaging Integrity Outweighs Design

Source: Mintel, Food Packaging Trends, US, June 2018

▪ While standing apart from the crowd is important, hitting the basic expectations shouldn’t be overlooked

▪ A quarter of shoppers have avoided buying a product because of a previous packaging failure

▪ Reliability can have a greater positive impact than creativity

Consumer Trends Drive Snack Packaging Changes

Source: 2018 PMMI Snack Foods – Packaging and Processing Market Assessment and Trends

Better-For-You Snacks: high growth category creating need for new production lines entirely dedicated to healthy snacks

Single-Serve Snacks: lesser portions, less calories > growing across all categories

Resealability: on-the-go snacking made possible (and enhanced food freshness)

Most Frequently Mentioned Consumer Trends:

Consumer Insights: Cereal & Snacks Packaging

➢ What Works

➢ What Doesn’t

➢ Opportunities

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Consumers identify opportunities for food packaging improvement – in their opinion,

“they aren’t asking for much”

Qualitative Exploration: Current packaging options in various food categories

▪ Category Focus: Cereal & Snacks

▪ Usage Profile: Moderate and heavy purchasing/consumption households

▪ Base Demographics: Moms / Millennials / Empty Nesters

▪ Focus Groups: 150 consumers interviewed

▪ Video Diaries: 50 consumers; 100 video diaries ((50) In-home & (50) In-store)

▪ Interview Timing: Q3 & Q4 2016

▪ Region: United States

▪ Researchers: Primary research conducted by PARK Research & WatchMeThink.com

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Research Approach

Zip-Pak Consumer Insight

SNACKS PACKAGING RESEARCH

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Snack Packaging: Voice of Consumer

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Snack Packaging: Voice of Consumer

Zip-Pak Consumer Insight

CEREAL PACKAGING RESEARCH

Cereal Packaging: Voice of Consumer

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Cereal Packaging: Voice of Consumer

EXISTING PACKAGING FORMATSConsumer Insights

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&

Primary Consumer Perceptions

▪ “Unassisted”, bag-in-box does not keep food fresh

▪ Folding/rolling down the inner bag and closing the box tabs is not a desired or ideal reclose solution

▪ Consumers often use clips/tape/rubber bands or transfer the cereal to canisters or secondary storage bags

▪ Opening the inner bag can be difficult and the bag can often tear down the side or seam

▪ Consumers like the box because it:

✓ Helps with organization/storage

✓ Protects the cereal

✓ Identifies the product and nutritional information (at home)

Package Format: BAG-IN-BOX

Current State: Cereal & Snacks Packaging

Primary Consumer Perceptions

✓ Stand up pouches with reclose are very appealing

✓ The built-in convenience of reclose is appreciated and valued

✓ Stand-up format helps with storage and organization

✓ View the product/brand as thoughtful for providing a “total package”

✓ Eliminates the need for extra packaging, i.e. the outer box in the bag-in-box format

✓ No extra steps of clipping, taping or transferring

✓ Belief that it will preserve product freshness for the extent of its shelf-life

Current State: Cereal & Snacks Packaging

Package Format: STAND UP POUCH

Primary Consumer Perceptions

✓ Pillow-pouch with front of pack press-to-close was received as a good effort

▪ However, closure was also not ideal given the small size of the opening

▪ Pillow-pouch packaging with no reclose annoys consumers

▪ Challenging to open properly (grip strength, flimsy film that tears)

▪ More difficult to store (doesn’t stand up or hold form)

▪ Bag are notorious for tearing down the sides upon opening, making reclose impossible

▪ Need clip or similar tool to keep the bag clip

Current State: Cereal & Snacks PackagingPackage Format: Pillow-Pouch

Primary Consumer Perceptions

✓ Canister very functional for scooping or pouring and reclosing

✓ Canisters are appreciated for ease of use & protection, reminiscent of metal tins for chips

▪ Concern the canister could take on moisture

✓ Stand-up lined paper bags are liked for their size, shape, portability, and for standing up

▪ Bags fall short, however, for their lack of reclose

✓ Trays w/ Snack ‘n Seal reclose (or similar) are well received for ease of use & most report durability

▪ Tray/overwrap with no reclose frustrates consumers: cookies go stale, sliding the tray in & out is a hassle & film often tears

Current State: Cereal & Snacks Packaging

Other Formats:

▪ Paperboard Canister

▪ Paper Stand-Up Bag ▪ Trays

CLEAR CALL FOR RECLOSE

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Consumer Insights & Desires: Clear Call for Reclose

Flexible packaging’s features make life more convenient:

Source: Flexible Packaging Infographic: Thinking Outside The Box, FPA, 2017

▪ CONSUMERS ARE TAKING MATTERS INTO THEIR OWN HANDS TO PROTECT & PRESERVE FOOD

▪ While some accept clips, bags, containers & tape as routine – others are more frustrated

▪ QUALITY PACKAGING WITH QUALITY RECLOSE

▪ Tells consumers the product has value

▪ Preserves the brand image in the home

▪ Saves consumers time and money

▪ Serves as a point of differentiation at shelf

▪ ENHANCE THE OPENING EXPERIENCE

▪ FOOD SHOULD BE KEPT FRESH

▪ LACK OF RECLOSE = LOSS OF VALUE

Zip-Pak Consumer Insight

THE IMPORTANCE OF PRODUCT FRESHNESS

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PURPOSE

• Zip-Pak invested in an exploration of consumer packaging preferences

• A lab study was conducted to understand how zipper contributes to product freshness

Zip-Pak Consumer Insight

Freshness Study: Consumer and Laboratory

Protecting Food Freshness is a High Priority

WHEN SHOPPING FOR FOOD, CONSUMERS TOP PRIORITIES ARE:

▪ Shoppers prioritizeFRESHNESS & TASTE over:▪ Cost▪ Healthfulness▪ Ease of preparation

▪ 60% OF CONSUMERS will pay more for packaging that offers resealability, easy opening, & extended shelf life

Base: 1,938 internet users aged 18+ who are primary or shared grocery shoppers. Source: Mintel, Food Packaging Trends, US, June 2018

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Packaging In-Home: Voice of Consumer

LABORATORY FRESHNESS STUDIES

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CerealSalty Snacks

Laboratory:

&

Sensory, Moisture,Packaging Water Vapor Transfer Rate

▪ Quantitative Exploration: Packaging Shelf Life with Zip Closure

▪ 12 Week Period

▪ Product was opened & resealed with Zip-Pak zipper

▪ Stored at a range of “real world” storage conditions

• 73°F - Retail Ambient

• 70°F/90°F - Cycling Summer Warehouse Simulation

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Test Methods:

FRESHNESS STUDY – SALTY SNACKS

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Archer Farms Traditional Potato Chips

Zip-Pak Inno-Lok Zipper

Resealable Solutions Preserve Product Freshness

80%

ZIPPER RECOVERS 80% OF THE SEALED PACKAGE BARRIER

FRESHNESS STUDY - SALTY SNACKS:

✓ Zip closure retains 80% of the sealed package barrier

✓ Zipper maintains shelf-stable product integrity for at least 3 months

✓ Reclosure slows down the rate that moisture penetrates the package

FRESHNESS STUDY - CEREALGeneral Mills Cinnamon Toast Crunch & Kellogg’s Fruit Loops

Zip-Pak 10mm Zipper

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Resealable Solutions Preserve Product Freshness

90%

ZIPPER RECOVERS 90% OF THE SEALED PACKAGE BARRIER

FRESHNESS STUDY - CEREAL:

✓ Zip closure retains 90% of the sealed package barrier

✓ Zipper prevents product from having a moisture limited shelf life

✓ Reclosure dramatically slows down the rate that moisture penetrates the package

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The Importance of Reclose for Freshness

✓ Packaging that extends shelf-life

drives purchase intent

✓ Product freshness is a top priority for

consumers

✓ Zip-Pak offers proven solutions to keep products fresh

Zip-Pak appreciates your time & the opportunity to partner

with you!

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Margaret AngelovichRegional Sales Manager

margaret.angelovich@zippak.com