Packaging trends 2018 · 2019-03-07 · iStock/Worawee Meepian r Presentation at the European Paper...

iStock/Worawee Meepian

www.simon-kucher.com

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Presentation at the European Paper & Packaging Strategy Conference 2018

Packaging trends 2018

Frankfurt, August 30, 2018

Dr. Daniel Bornemann, Partner

Bonn officeWilly-Brandt-Allee 1353113 Bonn, GermanyTel. +49 228 9843 [email protected]

TIME TOPIC

10:00 – 10:30 Registration and welcome coffee

10:30 – 10:45 Welcome and introductionDr. Daniel Bornemann

10:45 – 11:15 Smart packaging: Trends and commercializationDr. Daniel Bornemann

11:15 – 12:00 Smart packaging at Tetra PakEric Schmid

12:00 – 13:00 Networking lunch break

13:00 – 13:45 Value sellingJose Redondo

13:45 – 14:30 Smart corrugated packagingStefan Kunzmann

14:30 – 15:00 Networking coffee break

15:00 – 15:30 Monetizing innovationMark-Daniel Rentschler

15:30 – 16:00 Digitized Pricing: How to use AI and ML to improve profitabilityAleksander Jarosz

16:00 – 16:30 Panel discussion – Smart packaging and digitalizationAll

16:30 – 16:45 Wrap-up and outlook: Smart packaging and digitalizationDr. Daniel Bornemann

16:45 – 18:00 Networking reception with cocktails and snacks

Conference agenda

01_Simon-Kucher_Industry trends in paper and packaging_Daniel Bornemann_inclSurvey.pptx 2

Today's keynote speakers

Stefan Kunzmann

Sales, Marketing & Innovation

Director central Europe

DS Smith

Jose Redondo

Global pricing Excellence

Leader

O-I

Eric Schmid

VP Commercial Management

Tetra Pak International

Dr. Daniel Bornemann

Partner

Simon-Kucher & Partners

Mark-Daniel Rentschler

Senior Director


Aleksander Jarosz

Director



Simon-Kucher & Partners at a glance

Growth and competitive strategies

Product portfolio (re-)design

Pricing excellence

Sales strategies and sales channel optimization

Customer-centric digital approaches

End-to-end transformation towards commercial excellence

…

Global presence > 3,000 projects in the last 3 years

World leader in giving advice to companies on howto price their products

Pricing strategy specialists

The world’s leading pricing consultancy

In pricing you offer something nobody else does

BusinessWeek The Economist

Professor Peter DruckerThe Wall Street Journal

World leader in pricing

37 offices worldwide, > 1,100 employees, $300m revenue in 2017Amsterdam Atlanta Barcelona BeijingBonn BostonBrusselsCairoChicagoCologneCopenhagen Dubai FrankfurtGeneva Hamburg Hong KongIstanbul London

LuxembourgMadrid MilanMountain View Munich New York Paris San Francisco Santiago de Chile São PauloShanghaiSingapore StockholmSydney TokyoTorontoViennaWarsawZurich

Best consultancy in marketing, pricing and sales

Source: Forbes, Survey of best management consulting firms in the US, October 2016

Marketing, brand, pricing

Source: Capital, survey of the best consultancies in France, October 2016

Marketing, sales, pricing


on par with

Boston Consulting Group

McKinsey & Company


on par with


McKinsey & Company

1...

Source: brand eins Thema special edition: Consulting –industry report from brand eins Wissen and Statista, online survey, 2014, 2015, 2016, 2017, 2018

Marketing, sales, pricing

Simon-Kucher & Partners1

Source: Financial Times, list of the UK's Leading Management Consultants, January 2018

Marketing, brand, pricing


on par with

McKinsey & Company

1

Capital Forbesbrand eins/Statista Financial Times


McKinsey & Company


......


COLOURBOX/Olivier Le Moal

Selected paper and packaging references

Ahlstrom

Albea

Ahlstrom

Antalis

Arjowiggins

August Faller

Avery Dennison

Ball Packaging

Coveris

DS Smith Packaging

Eska

Europapier

Gissler & Pass

Huhtamaki

Hydro

Johns Manville

KHS GmbH

Klöckner Pentaplast

LINPAC-Allibert

Mayr Melnhof

Mauser

Mondi

Nordic Paper

Optima Packaging

Owens-Illinois

Oystar

Papeteries du Leman

Papierfabrik Palm

Papyrus

Prinovis

PSB

Rovema

Sappi

SCA

Schelling

Schoeller Arca Systems

Schott

SGD Pharma

Sidel

STI

Stora Enso

Texen

Thimm

Vetropack

...


Source: Survey among participants of the European Paper & Packaging Strategy Conference 2018, n = 30

Overall the outlook on the paper and packaging industry is a positive one –Disperse the clouds by seizing digitalization opportunities early on!

COLOURBOX/ Syda-Productions

If you need to give an outlook on the paper and packaging industry in the next five years, how would you describe it?

Sun with some clouds

Cloudy

Bright and sunny

Rainy with many thunderstorms

63%

27%

10%

0%


COLOURBOX/-


E-COMMERCE

DIGITAL PRICING

(DIGITAL)

SERVICES

GOING GREEN

MASS

CUSTOMIZATION/

DIGITAL

PRINTING

DYNAMIC PRICING

SMART

PRODUCTS

PLATFORMS

TRANSPARENCY

ONLINE RETAIL

COST

INCREASES

VALUE SELLING

INNOVATIONS


Source: Survey among participants of the European Paper & Packaging Strategy Conference 2018, n = 30 , multiple answers possible

Going green/sustainability, e-commerce, value selling and handling cost increases viewed as major trends in the paper and packaging industry


73%

43%

43%

43%

40%

30%

23%

20%

0%

Going green

e-commerce

Value selling

Cost increases

Smart products

Mass customization/digital printing

Platforms

(Digital) Services

Digital pricing

What do you think are the most important trends in paper and packaging?


COLOURBOX/-


E-COMMERCE

DIGITAL PRICING

(DIGITAL)

SERVICES

GOING GREEN

MASS

CUSTOMIZATION/

DIGITAL

PRINTING

DYNAMIC PRICING

PLATFORMS

TRANSPARENCY

ONLINE RETAIL

COST

INCREASES

VALUE SELLING

INNOVATIONS

SMART

PRODUCTS


GettyImages_nullplus_113511588

Smart packaging products can add value along the value chain

Digitalization of packaging products may have different use cases :

Brand protection

Theft protection

Product quality protection

Customer information and interaction

Optimization of logistic


iStock/-

62%

10%7% 6%

10%

5%

37%

23%21%

7% 7%5%

One-time payment Licence Flat rate Pay per use Options rate Other

Traditional products

Digital products

Source: Simon-Kucher brief B2B study, November 2016 (n= 59)

Traditional price models are no longer sufficient for smart packaging products

Away from the one-time price of traditional products to flat rates and licenses

The traditional "one-time price" model is replaced by new price models


COLOURBOX/-

Source: Simon-Kucher

Out-of-the-Box: Smart-Packaging-Blockchain helps to overcome added-value-buyer-dilemma for smart packaging products

AdditionalvalueBuyer 1 Buyer 2

COLOURBOX/ Nick NickCOLOURBOX

Example 1: Item slider

Example 2: RFID logistic

Example 3: RFD freshness

COLOURBOX/ COLOURBOX/ F. GIROU6PA-MAXPPP

GettyImages_gilaxia_621271582

Smart-packaging-blockchainEnd-userDistributor(Own-) brand

Packaging company

Added-value-buyer-dilemmaalongside the value chain

COLOURBOX/-



Despite being seen as a major trend, smart packaging products are still in their infancy


Does your company have smart packaging products?

47%

23%

17%

13%

No

Yes, with limited success

Yes, currently in development

Yes, already successfully launched


COLOURBOX/-


E-COMMERCE

DIGITAL PRICING

GOING GREEN

DYNAMIC PRICING

PLATFORMS

TRANSPARENCY

ONLINE RETAIL

COST

INCREASES

VALUE SELLING

INNOVATIONS

SMART

PRODUCTS

(DIGITAL)

SERVICES

MASS

CUSTOMIZATION/

DIGITAL

PRINTING

COLOURBOX/-


Mass customization through digital printing

VALUE UP COST DOWN

Mass customization

Nutella Coca Cola

Small batch production

HP

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BO

X_

Dm

ytro

-Su

kh

are

vsk

yy_8

73

38

98

_e

GettyImages_lleerogers_185078287

GettyImages_sergeyryzhov_692837826



The majority of participants sees a significant revenue share (>25%) for mass customization in the near future


What share of business will "mass customization" represent in the next 5 years within the whole industry?

Minor share of the total business (25-50%)

Some share of the total business (10-25%)

Major share of the total business (over 50%)

Play only a niche role (<10%)

None (0%)

I don’t know

40%

27%

20%

13%

0%

0%



COLOURBOX/-

DIGITAL PRICING

(DIGITAL)

SERVICES

GOING GREEN

MASS

CUSTOMIZATION/

DIGITAL

PRINTING

DYNAMIC PRICING

PLATFORMS

TRANSPARENCY

ONLINE RETAIL

COST

INCREASES

VALUE SELLING

INNOVATIONS

SMART

PRODUCTS

E-COMMERCE


Packaging industry example: Several companies have launched online shops

COLOURBOX/-

Certain online shops already exist in packaging

Shops are not easy to find and consistent across the company

Very few compelling offerings

Very limited user experience

Other industries have progressed much further


COLOURBOX/Dima Sobko

Source: Simon-Kucher

e-channels in B2B: Simon-Kucher framework

Key questions:

What is the underlying strategy? What are main objectives of the e-channel?

Which market and customer segmentsare targeted?

Which parts of the product portfolio are offered? Which service (quality) is offered?

What is our pricing approach for the e-channel?

Is the e-channel an active sales or passive distribution channel?

1

2

3

4

5

E-channel in B2B

Strategy/objectives

Product

Sales/channel

1

3

4

5

Market/customer

2

€

Pricing



E-commerce will be used to generate additional sales and drive customers’ convenience


What do you think will be the major goals of online shops/e-commerce in the industry?

Generate additional sales(e.g. with new customer segments)

Increase convenience for customers

Cost saving in sales

Generate attention and interest towards products and services

52%

48%

31%

21%



… however, the total share of online business is expected to remain rather low in the near future – Do P&P companies lack the right strategy?


What share of products will be sold online in the next 5 years within the whole industry?

Some share of the total business (10-25%)

Play only a niche role (<10%)

Minor share of the total business (25-50%)

Major share of the total business (over 50%)

None (0%)

I don’t know

37%

30%

27%

7%

0%

0%


COLOURBOX/Tetiana-Vitsenko


E-COMMERCE

DIGITAL PRICING

GOING GREEN

MASS

CUSTOMIZATION/

DIGITAL

PRINTING

DYNAMIC PRICING

PLATFORMS

TRANSPARENCY

ONLINE RETAIL

COST

INCREASES

VALUE SELLING

INNOVATIONS

SMART

PRODUCTS

(DIGITAL)

SERVICES


iStock/Boarding1Now; iStock/filistimlyanin

Services support you to escape from the commodity trap

81% of all paper

packaging companies face increased pricing pressure

65% of all

companies believe that growing low price competition is one reason for increased pricing pressure

Every second company

wants to change its

customers' perception of

value and price to reduce pricing

pressure

Differentiated and clearly

communicated service offering

is a very effective way

to increase

customer value perception


Source: Simon-Kucher & Partners

Define digital services based on future trends

Deriving strategic routes(segment-specific and integrated)

Trends & Beliefs

I

Longlist strategic

routes

II

Automaticcheck-out Traceability

(RFID)

Masscustomization …

Incremental change

Hyper-personalization

Sustainability

Connectivity …

Revolution ahead

11

22

33

4n

E.g. : "Become a solution/ service provider"

E.g. : "Take out supply chain cost"

E.g. : "Sell new innovative product"

E.g. : "Have best customer journey experience"



The importance of digital services is widely acknowledged by the industry –how well equipped are paper and packaging companies to monetize them?


How important will digital services be in the future for the industry?

Digital services will play an important role as revenue stream

Digital services will be a nice to have add-on

Digital services? – I think the industry should start monetizing normal services first

Digital services will not play a role at all

53%

23%

23%

0%


COLOURBOX/hurricanehank

E-COMMERCE

DIGITAL PRICING

GOING GREEN

MASS

CUSTOMIZATION/

DIGITAL

PRINTING

DYNAMIC PRICING

PLATFORMS

TRANSPARENCY

ONLINE RETAIL

VALUE SELLING

INNOVATIONS

SMART

PRODUCTS

(DIGITAL)

SERVICES


COST

INCREASES


Legislation PUSH

COLOURBOX/-COLOURBOX/Milous Chab

Going green – topic gets traction

Increased EU-regulationtowards sustainable packaging

Increased demand for sustainable options by customers andend consumers

Going green

COLOURBOX/hurricanehank

Going Green

75% by 2025

Paper and cardboard

E.g. new 2018 legislation definesrecycling targets for packaging:

Packaging customers’ preferences for green packaging are growing, e.g.:

Customer preference PULL

German REWEgroup selling bananas only without packaging


GettyImages/-

E-COMMERCE

DIGITAL PRICING

GOING GREEN

MASS

CUSTOMIZATION/

DIGITAL

PRINTING

DYNAMIC PRICING

PLATFORMS

TRANSPARENCY

ONLINE RETAIL

VALUE SELLING

INNOVATIONS

SMART

PRODUCTS

(DIGITAL)

SERVICES


COST

INCREASES


COLOURBOX/ -

Index fluctuations are normal – some indices with high increases this year

1.000

1.050

1.100

1.150

1.200

1.250

1.300

1.350

1.400

1.450

1.500

Jul 17 Sep 17 Nov 17 Jan 18 Mrz 18 Mai 18

PET Platts PET ICIS PET KI

PET indexfor EUR/t

+30%

+32%

+22%


Project examples anonymized for confidentiality reasons

A delayed response to increased raw material costs results in immediate margin losses

Anticipating cost dynamics and acting accordingly is key!

Days

Prices

Net prices

Raw material price decrease

Raw material cost based minimum prices

Raw material price increase

Gross margin

0

Project example


5 Step price increase program

Define price increase strategy

Exploit product-related potential

Use customer differentiation

Increase forterms and services

Prepare for communication

Set price increase targets

Understand basis for price increase

Use price potential for:

Products with high USP

Secondary products

Product lifecycle

Segment customers for price increases.

Differentiate for:

Small customers

Industries with lower price sensitivity

Customers with poor price quality

Stop margin slippage through systematizing terms and conditions

Monetize the service offering

Thoroughly prepare internal and customer communication

1

2

3

4

5

INCREASE YOUR SUCCESS!


www.simon-kucher.com

AfricaCairo

AmericasAtlanta, Boston, Chicago, Mountain View, New York, San Francisco, Santiago de Chile, São Paulo, Toronto

Asia-Pacific/the Middle EastBeijing, Dubai, Hong Kong, Singapore, Sydney, Tokyo

EuropeAmsterdam, Barcelona, Bonn, Brussels, Cologne, Copenhagen, Frankfurt, Geneva, Hamburg, Istanbul, London, Luxembourg, Madrid, Milan, Munich, Paris, Stockholm, Vienna, Warsaw, Zurich

Bonn officeWilly-Brandt-Allee 1353113 Bonn, GermanyTel. +49 228 9843 0

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Packaging trends 2018 · 2019-03-07 · iStock/Worawee Meepian r Presentation at the European Paper...

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