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PACKAGING

DECEMBER 2016MARKET INSIGHTS

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PACKAGING

MULTISENSORY MESSAGESTactile cues associated with perceptions of quality, freshness, and luxury can be achieved in packaging through laser-etching, embossing, and molded patterns as well as textured coatings and specialty materials.2 Information from multiple senses influences a potential buyer’s impression of a product, even when the consumer isn’t consciously aware of the message. Manufacturers benefit from using enhanced packaging that conveys relevant brand impressions—for example,

smooth or silky packaging surfaces for foods with a similar mouthfeel or a slightly waxy feel for fruit smoothie cartons that mimics fruit texture.3

LUXURY LABELSBritish-based print vendor Domino Digital Printing recently launched Textures by Domino, a print solution that allows label printers to create digitally textured labels (without using special substrates) that are visually striking and stand out on the shelf. Domino believes the value-added design element not only captures consumer attention, but it entices them to touch the product—even remove it from the shelf—bringing consumers closer to a positive purchase decision. Examples include premium textured effects, metallic labels, and raised, grainy labels for alcoholic beverages—all of which reinforce important brand cues.

An increasing number of consumers now expect sensory experiences with

product packaging, a brand-building differentiator that could create a

competitive advantage for manufacturers. Consistent with additional research

that shows that brand impact is boosted by 30 percent when multiple senses are

engaged,1 new advances in tactile-packaging elements have grown in importance.

SENSATIONAL Structures

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PACKAGING

Labels are intended primarily for cosmetic, beauty, wine, and beer products but could be applicable to many categories. Domino uses standard substrates and materials for printing, enabling cost-effective packaging labels with a premium look and feel. The new label-printing technology is only available through the use of Domino’s N610i digital UV inkjet label press. With print speeds of up to 246 feet per minute, the N610i printer can print approximately one million 3” x 3” labels in just over five hours—double the speed of competitive color digital systems. Inks are designed for coated paper, polypropylene, and polyethylene, among

other materials.4

FLEXIBLE’S NEW FEELINGClondalkin Flexible Packaging Kirchberg, a specialty European supplier of high-value

packaging products, recently unveiled new tactile features

within its flexible-packaging lineup. The company believes that tactile-packaging technology can strongly influence consumers’ purchase decisions, creating a premium experience or conveying an important message to consumers when they handle the product. Integral to Clondalkin’s new packaging solutions are features such

as relief and soft-touch elements that can be applied across a portion of a product or over an entire product’s surface.5

APPEALING ALCOHOLLeading glass-container manufacturer O-I won two awards for best glass packs at the 2016 UK Packaging Awards. Lux Vodka Black Label won the premium-glass category, while Teacher’s Scotch whisky won the everyday-glass award. Lux Vodka Black Label, an authentic British ultrapremium vodka that is distilled and bottled in Essex, won as an “aesthetically pleasing and tactile luxury packaging triumph.” The goal of the Lux Vodka Black Label was to produce a package that “oozes luxury yet remains 100% recyclable,” a goal that the brand achieved in an art deco–style bottle using extra flint glass. In contrast, the Teacher’s bottle utilized narrow neck press and blow technology to significantly lighten the bottle while maintaining well-defined embossing and a premium look.6

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SUPPLY CHAIN & LOGISTICS

ONE-STOP SHOPPINGSupermarket giant Sainsbury’s recently acquired general merchandise retailer Home Retail Group PLC, becoming one of the UK’s largest food and nonfood retailers. One significant benefit of the takeover? The ability to leverage the partnership between catalog

retailer Argos to eBay and create an omni-channel shopping experience for Sainsbury’s customers. The newly formed Sainsbury’s Argos will collaborate with DPD Pickup’s parcel-shop network to create 200 digital click-and-collect points across its properties. Consumers will be able to pick up DPD-delivered items, eBay purchases, and Sainsbury’s Tu brand fashion merchandise at the “one-stop destination” locations.9 The changes reflect Sainsbury’s effort to adapt to consumers’ changing shopping habits, providing increased flexibility, speed, and choice to customers in store and online.

LAST-MILE LOGISTICSRevolutionary transportation network Uber will debut its new UberRUSH service for the 2016 holiday-shopping

period, providing merchants with the ability to offer same-day merchandise deliveries to customers. In late 2015, Uber tested a basic courier service using its network of cars and bike messengers and expanded the service in early 2016 with the launch of a private application program interface (API) so retailers could incorporate same-day service into their apps and websites. Early collaborators included Google Express, Nordstrom, and 1800Flowers. With the launch of the UberRUSH open API, retailers have access to a simple solution that enables on-demand delivery. The widely available merchant delivery program would “allow an Uber driver to pick up an item at a store and store it in the trunk, pick up a person and complete a fare, and then drop off the original item at its final destination in a single trip.” With Uber’s strong logistics platform and established network of drivers, UberRUSH has the potential to further shake up the on-demand economy.10

Even supply chains that operate seamlessly can be stretched to the limit

during the holiday-shopping period.7 Adding to the pressure, Amazon—who

accounted for 60 percent of 2015 US-based online sales growth—continues to

set a high bar for rapid-delivery logistics, forcing other companies to innovate

in order to compete.8

OPTIMIZING HOLIDAY Supply Chains

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INEFFICIENT OPERATIONFindings from a similar study by trade publication DC Velocity and management consulting firm ARC Advisory Group support the DHL Supply Chain report. Despite an array of new logistics strategies and processes, most retailers have simply “bolted their new omni-channel operations onto existing infrastructure,” fulfilling alternate-channel orders in the same distribution centers that manage traditional store fulfillment. Compounding the inefficiencies is the fact that 59 percent of respondents indicated that in addition to housing e-commerce and traditional-fulfillment streams in the same building, they used separate operations, employees, and inventory. The hesitation to fully integrate operations may be due to claims that 67 percent of direct revenues still come from brick-and-mortar locations. Despite these challenges, retailers continue to invest in sophisticated software tools to manage their omni-channel operations in expectation that e-commerce revenues will continue rising, regardless of where fulfillment happens.12

MULTICHANNEL MIND-SETSpanish fashion brand Desigual is in the midst of migrating to an omni-channel model. With merchandise in more than 500 Desigual stores, 7,000 multibrand stores, 2,700 department stores, and 23 online stores, the task is daunting as each channel presents its own set of unique logistics and competitive challenges. To develop a holistic view of operations, the company created an integrated omni-channel team tasked with developing a cross-organizational approach. The company operates under the philosophy that it doesn’t have channels anymore; it has “one omni-channel that is focused on consumers,” as all customers must receive the same standard of service regardless of where they make their purchase. In order to implement the multichannel mind-set, Desigual created a comprehensive training program for stores in its multichannel network, ensuring relevant stores were staffed with designated personnel trained to handle e-commerce orders.13

DHL Supply Chain’s recent report “Omni-Channel Retail: Fulfilling Demand

Profitably” argues that retail growth in the omni-channel era is constrained by

escalating customer expectations and legacy supply chains. The report states

that e-commerce costs can outpace brick-and-mortar stores by 400 percent

more per unit; in fact, 86 percent of retailers believe that supply chains are not

able to effectively manage omni-channel retail operations.11

OMNI-CHANNEL Expansion

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PROTEIN PLAYAmazon Fresh, the grocery delivery service by online retail giant Amazon.com, has partnered with Tyson Foods to create a chef-inspired meal kit. The new service, Tyson Taste Makers, will offer fresh, premium protein as its centerpiece. Menus will change seasonally, with ongoing availability of new meals to try. Fresh vegetables come already prepped, with sauces and spices measured, while meat is seasoned and minimally processed without artificial ingredients. The service will “pre-cut, trim, dry age, smoke, marinate” meats and teach consumers about the various cuts of meat and their origins. The company’s differentiating strategy is to introduce ingredients that consumers may not have used before. Amazon hopes the partnership will broaden the appeal of Amazon Fresh to a younger, upper-income demographic interested in meal-kit convenience.16

CLICK TO COOKInstacart, an on-demand grocery delivery service, has established a new partnership with Food Network, integrating its technology into FoodNetwork.com and enabling people browsing the site’s more than 500,000 recipes to click a button and add the required ingredients to their shopping carts. Once a consumer has added ingredients to his or her Instacart shopping cart at his or her preferred store, the consumer selects a delivery time, and Instacart’s technology takes over to deliver those groceries to the consumer. The innovative integration model will be available on FoodNetwork.com’s “Recipe Box” and “Grocery List” pages as well as Food.com. Beyond Food Network’s 35 million unique monthly website visitors, Instacart also has partnerships in place with AllRecipes.com (1.3 billion monthly visitors) and Yummly’s app (15 million annual users). The expansion to Food Network will contribute to Instacart’s leadership position as the default choice for on-demand grocery delivery from recipe sites, in the face of competitors like Amazon Prime Now, Google Express, Peapod, and Shipt.17

A growing number of companies are launching and investing in meal-kit

companies, an industry currently dominated by Blue Apron and Hello Fresh.14

The New York Times estimates that the meal-kit market could grow by $5

billion over the next decade, a testament to continuing consumer interest in

high-quality, convenient food.15

FOOD SERVICE

DINNER on Demand

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COFFEE-INFUSED FOAM FILTERFirst published in the American Chemical Society (ACS) Sustainable Chemistry & Engineering Journal, scientists have reported experimental findings that coffee

grounds could potentially serve as water remediation material, with ground-coffee powder eliminating unhealthy heavy-metal ions, like lead and mercury, from water. The challenge has been simplifying the next step: separating the purified water from the coffee-ground powder. Regardless, the experiments are promising: with still water, the foam filter took 30 hours to remove up to 99 percent of lead and mercury ions. In a second, more practical test where lead-contaminated water flowed through the foam filter, up to 67 percent of lead was removed. Researchers report that because the coffee was immobilized, it was easy to handle and discard after being used.20

COVERING NEW GROUNDArul Arulrajah, a coffee-loving professor of geotechnical engineering at Swinburne University of Technology in Melbourne, Australia, was inspired to find a sustainable solution when he noticed a barista throwing used grounds away. His idea? Build new roads! Arulrajah spearheaded the collection of soggy coffee grounds from a local restaurant, drying them in an oven at 50 degrees Celsius. His team also obtained slag, a waste product from steel manufacturing, and used an alkaline mixture to bind a seven-part coffee ground and three-part slag concoction. The team then compressed the mixture into cylindrical blocks, creating a product strong enough to serve as a base layer for a road. Recent scientific studies of the material confirmed its viability, stating that Arulrajah’s recycled product has the “potential to transform the construction industry in the sustainable usage of waste by-products in future road subgrades.”21

Coffee grounds create a significant amount of waste, with much of it ending up in

landfills. In fact, 70 million cups of coffee are consumed daily in the United Kingdom

alone, generating 500,000 tons of annual waste.18 A 2008 study indicated 7.4 million

tons of insoluble, highly organic waste from coffee grounds accrues globally each

year, a number that was expected to rise, especially in developing nations.19 Finding

innovative ways to recycle or reuse the waste has yielded some interesting results.

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RECYCLING

COFFEE Conundrum

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www.havi.com

Credits1Lingle, R. (2016, October 3). Digitally Printed Labels Add Texture to Put Consumers in Direct Touch with Packaging, Packaging Digest. Retrieved from http://www.packagingdigest.com 2Clark, N. (2016, May 24). 4 Fast-Moving Trends in Food and Beverage Packaging, Packaging Digest. Retrieved from http://www.packagingdigest.com3Chadwick, P. (2016, June 28). Vince Kerrigan: How Tactile Packaging Designs Are Appealing to Customers, Packaging News. Retrieved from http://www.packagingnews.co.uk4Domino Digital Printing Solutions. (n.d.). N610i UV Inkjet Printer, Domino Digital Printing Solutions. Retrieved from https://www.dominodigitalprinting.com 5Eagle, J. (2016, September 29). Clondalkin to Debut ‘Soft to Touch’ Tactile Packaging, BeverageDaily.com. Retrieved from http://www.beveragedaily.com 6PackagingEurope.com. (2016, July 11). Lux Black Label and Teacher’s Scotch Whisky Win Best Glass Categories, Packaging Europe. Retrieved from http://www.packagingeurope.com 7Jones, G. (2016, September 16). 100 Days Until Christmas: Optimising Your Supply Chain, Moore Stephens. Retrieved from http://www.moorestephens.co.uk8Raines, L. (2016, August 26). ‘The Amazon Effect’ Changing Logistics, BizJournals. Retrieved from http://www.bizjournals.com9Stevens, B. (2016, September 9). Sainsbury’s Launches 200 New Click and Collect Points, Retail Gazette. Retrieved from http://www.retailgazette.co.uk10Crook, J. (2016, June 9). Uber Opens RUSH API to Everyone, Tech Crunch. Retrieved from https://techcrunch.com11DHL Supply Chain. (2016, October 11). Logistics Is Vital to Online Profitability, says DHL, Logistics & Supply Chain. Retrieved from http://www.logisticsandsupplychain.com12Ames, B. (2016, November 8). Study: Multitasking DCs Deliver the Goods for Omnichannel Retailers, DC Velocity. Retrieved from http://www.dcvelocity.com

13SupplyChainMIT.com. (2016, May 12). Where Bricks-and-Mortar Meets Omni-Channel, Supply Chain @ MIT. Retrieved from http://supplychainmit.com14Kim, E. (2016, May 9). Amazon to Launch a Blue Apron-like Recipe Delivery Service This Fall as it Ramps Up Food Business, Business Insider. Retrieved from http://www.businessinsider.com15Peterson, H. (2016, July 28). Whole Foods Has a Bold New Plan to Imitate One of the Most Successful Food Startups, Business Insider. Retrieved from http://www.businessinsider.com16Kim, E. (2016, May 9). Amazon to Launch a Blue Apron-like Recipe Delivery Service This Fall as it Ramps Up Food Business, Business Insider. Retrieved from http://www.businessinsider.com17Perez, S. (2016, June 2). Instacart Becomes the Default Ingredients-Buying App for Food Network’s Websites, TechCrunch. Retrieved from https://techcrunch.com18East, S. and N. Maguder. (2016, July 8). Caffeine Fix: Wake Up to Recycled Coffee, CNN. Retrieved from http://www.cnn.com19Kua, T. and A. Arulrajah, S. Horpibulsuk, Y. Du, and S. Shen. (2016, July 15). Strength Assessment of Spent Coffee Grounds-Geopolymer Cement Utilizing Slag and Fly Ash Precursors, Science Direct. Retrieved from http://www.sciencedirect.com20American Chemical Society. (2016, September 21). Coffee-Infused Foam Removes Lead from Contaminated Water, Science Daily. Retrieved from https://www.sciencedaily.com21Kua, T. and A. Arulrajah, S. Horpibulsuk, Y. Du, and S. Shen. (2016, July 15). Strength Assessment of Spent Coffee Grounds-Geopolymer Cement Utilizing Slag and Fly Ash Precursors, Science Direct. Retrieved from http://www.sciencedirect.com

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