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1 KEEPING CONSUMERS ON THEIR TOES Trends in Beverage Packaging Thorsten Hartmann, Director of Consulting Canadean EMEA
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KEEPING CONSUMERS ON THEIR TOES
Trends in Beverage Packaging
Thorsten Hartmann, Director of Consulting Canadean EMEA
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The forces influencing packaging innovation
Adapting to the consumer
Premiumization
Topics
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The forces influencing packaging innovation
Adapting to the consumer
Premiumization
Topics
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Commercial Trends
Consumer Trends
Demographic Trends
3 overall themes are impacting packaging innovation….
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SustainabilityAspirational
Changing Demographics
Connectivity
Customisation
Health & Wellbeing
Use & Convenience
Cost Reduction
Logistic Efficiency
Legislation
CONSUMER DEMOGRAPHIC
COMMERCIAL
Which play out in different ways
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What does the consumer see as important…?
Canadean Consumer: European Consumer Perception of Packaging Features: Top 5
Transparent/Clear
Surface Texture
Unique Shape
Interactive Packaging
Bright Colours
11% 7% 6% 4% 4%
13% 16% 22% 16% 20%
35% 32% 39% 25% 41%
59% 55% 67% 45% 65%
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Brand Impact &
Shelf Presence
Health & Wellbeing
Use & Convenience
Connectivity, Smart &
Customisation
To aid brand impact and shelf presence manufacturers and brand owners need to focus packaging innovation on targeted areas of significance and consumer desire
Matrix of Brand Impact &
Shelf Presence
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The forces influencing packaging innovation
Adapting to the consumer
Premiumization
Topics
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Product
The rise in ‘refined sugar content’ awareness, and the prospective health implications, has had an impact on soft drinks, specifically carbonated soft drinks
Health & Wellbeing
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Where should the change come from and how can packaging aid this?
Labelling
Portion controlReduced portion size: reduce portions of high-calorie beverages
Eliminate “supersize” items from menus and product ranges
Reformulation
Stealth product reformulation: Beverage producers deliver small, incremental reduction in the caloric content of beverages that consumers do not notice
Alternative Sugar Sources: Introduction of natural alternatives to the ‘norm’
Government / Industry mandates front-of-pack “engaging” format nutritional information
Aggregate basket calorie labelling
“plain” labelling “engaging” labellingRetailers provide traffic-light rating of basket contents at checkout
Smart Tech Pack Types – Enabling the consumer to track the calorie basket count
Smart Tech
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Portion control packaging innovation enhances the product mix and consumer purchase rate
WHAT?
Consumers are rethinking their soda consumption
• Countering the negative consumer perceptions towards the high calorie and sugarcontent of CSDs is paramount in reversing the trend of falling sales.
• The Mini-Can is an "uncompromised indulgence" by providing buyers a smallerserving (with fewer calories) of their favourite regular soda.
• It reduces waste and commands higher margins than conventional Coke packs.
WHY?
A big future for smaller CSD packaging formats
• Portion control packaging represents one of several "innovation platforms" thatcan be used to enhance the permissibility of CSDs to combat declining categorysales.
• In combination with formulation advancements (especially sweeteners), portioncontrol packs will be used to make CSDs brands more desirable.
TAKE-OUT
A mini-pack giving permissibility to soda consumption
• Coca Cola’s Mini-Can has emerged as an occasions growth driver, and a catalyst forcreative marketing campaigns.
• The sleek looking smaller pack, containing approximately 150-200ml of CSD, is soldindividually and in multi-packs in various markets globally.
Portion control amongst the traditional drinks has led to a rise in small pack types…with some success
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Coke’s Mini Can Super Bowl 2016 Ad – Packaging Innovation as Brand Magnet?
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HealthIndulgence
NoveltyTradition
Craft & careConvenience
Enticing consumers to the carbonates category requires helping them to address their "goal conflict"
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With a similar movement within beer as a focus on ‘alternative occasion’ becomesan appeal to different consumer segments
Reducing pack unit size of these alcohol drinks adds value to theirproposition, rather than diminishing it.
Smaller packs often appear more elegant (and more manageable) tofemale consumers, infrequent drinkers, and those in single-personhouseholds.
Heineken beer – mini 150ml bottles
• Small bottle format extends consumption opportunities for the Heineken brand suggesting for it to be consumed as an aperitif.
• Adverts feature people drinking from the bottles in situations not usually associated with beer drinking, such as at the opera or a fashion show.
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May 2015
October 2014
Others like Nestle are repositioning flavoured sparkling water brands as a substitute for diet and light sodas – moving away from traditional PET
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New entrants are utilizing the need to highlight product benefits to outmaneuver the competition…
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Functional Cap Technology• This packaging innovation is changing the functional market
• Protects ingredients from degradation
• 73% of consumers said a "fresh" claim makes them think a product ismore nutritious
Activate"Fresh vitamins" "Stop vitamin cruelty"
…whilst some brands are opting to focus on innovative closure systems to preserve the value added ingredients
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“The Norm” “The Challenge”
Juice
Wine
Water
Iced Tea
Carbonates
Brands are challenging the ‘norm’ to create new packaging for established categories…
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Breakfast Drinks and Value Added Dairy, enhanced with Energy or Fibre – and a move to RTD
with emerging sub-categories providing new avenues for packaging innovation and development…
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TEAM SKY BREAKFASTHigh Protein Smoothie with Fruit Concentrate
whilst new category presence and consumer demand also opens avenues for packaging innovation
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Convenience & Use
Convenience and use are also important factors driving packaging innovation
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0%
5%
10%
15%
20%
25%
30%
2010 2011 2012 2013 2014 2015
Share of novel squash/syrups launches in squeeze bottle
packaging, 2010-15
MioStarted the water enhancer trend
Robinsons Squash'dCapitalized on pack
innovation
Press'dBranched into new
sectors
Evolution of innovations
Water enhancers have seen great success off the back of the consumer shift for healthier products and innovative pack types that enhance use and convenience
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whilst others opt to innovate through a sense of ‘made for me’ packaging targeted at consumer segments occupied by parental spending power
• Innovative pack designs which target the user
• Ergonomically designed for small hands
• Bright eye catching designs coupled with ‘relevant to audience’ joint ventures.
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With established consumer segments also being targeted through the ‘made for me’ process
Budweiser Bow Can
• Ergonomically designed to createa ‘better fit’ for the consumer
Miller Lite ‘Grip Can’
• Innovative raised grip feature likea football…
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Consumer Connectivity is another factor in product choice…
Connectivity, Smart &Customisation • Consumers are looking to maximise personal relationships
and enjoy experiences together
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Individuality and a customised experience is enabling enhanced connectivity between consumers and brands
• As consumers become more demanding –even when seeking out everyday groceries –they are looking for products that stand out from the crowd or offer something unique
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Whilst limited additions and special occasion packs also add a new dimension to captivating the consumer
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With smart connectivity now reaching into areas relating to product content and consumer information – a movement beyond a sense of ‘ brand marketing’
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The forces influencing packaging innovation
Adapting to the consumer
Premiumization
Topics
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Premiumization & Indulgence
Canadean has identified the following key themes within Premiumization & Indulgence
Buying better
Luxury
TreatingQuality
Understanding Premiumization & Indulgence
Time to oneself
Brand service
exceeds expectation
Self-branding
Gourmet
Hyper-premium
Premiumization & Indulgence
The human desire for"better" drives the trendPremiumization &Indulgence taps into the shifttowards hyper-premiuminnovation and visibilityacross the FMCG market.The human fascination with"better" means that "buyingbetter" is a core purchasemotivator, and is found at theroot of many actionablethemes within the trend.
Life-style
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Time to relax
Gourmet food and
drink
Product implications Attitudinal implications
The new premium must go "above and beyond" in terms of quality and brand service
Premiumization is taking over the FMCG market through numerous different routes, including convenience, provenance, immersive brand experiences, or "natural" ingredients.
High-end products
and services
Opulent surroundings
Pre-emptive customer service
The concept of Premiumization & Indulgence can be visualized as a luxury hotel visit
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Personal brandingJustifiable indulgence Super-premium growth
Education and connectivity
Good is enoughBack to basics
Craft trend
DR
IVER
S
INH
IBITO
RS
Key consumer needs Which longings does the trend fulfill?
"I deserve to indulge myself; I have earned the
privilege"
Wanting to spend more on
products because they
can
Buying the best; you get what you
pay for
The trend is shaped by a number of drivers and inhibitors
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Moving away from traditional ‘stack it high, sell it cheap’ in store products is key
Product
• A lot of brands are competing in the same space
• failing to differentiate their brands
• mass positioning is resulting in a lack of engagement with consumers
Retailer
• the “stack it high, sell it cheap” strategy being adopted across the retail industry is leading to a disconnect with the buyer
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Alkkemist Ultra Premium ginTouting itself as "ultra premium,"Alkkemist claims to be the first ginmade with sapphire and Muscatgrapes. This exclusivity is supported bythe striking packaging, which combinesartistic edginess and paired-backtypography to make the bottle display-worthy. Marketing conveys a complexand delicate distillation process,1supporting the high-end positioning.
Artistic packaging reflects an ultra-premium brand message
Carlsberg Nox lagerUsing a modern and UV-sensitivepackaging design, Nox is a premiumlager. Separating itself from Carlsberg'seponymous brand, Nox claims to havea "sophisticated flavor" due to a newcold brewing stage with fresh hops, andthe use of new hop varietal Polaris.Such specific product nuances mirrorthe craft trend, helping Carlsberg fansto trade up and remain brand-loyal.
Lager that communicates tasting notes and hop varietals
Premium expression of a popular mainstream brand
Jack Daniel's single-barrel whiskeySaid to be "aged in white American oakbarrels in the upper sectors of thebarrelhouse […] to expose it to theextreme weather fluctuations." Greatercommunication of production methodsand calling out tasting notes align withtraditions seen in high-end whiskeyexpressions. This allows mainstreamJack Daniel's consumers to buy into thepremium whiskey segment.
Through innovative and adaptive designs that stand out from the crowd but remain relative to the consumer…
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to targeting the consumer through a sense of occasion, with unique and inspiring flavours…
A delicious clean soda.
Hӧpt positions itself as a ‘soda for socialising’ - Something cleaner. Something rewarding and more ‘sessionable’…
Made in NZ, Hӧpt was crafted by a team of people across Tokyo, Melbourne & Auckland who came together to create something for people coming together.
Hӧpt sodas are unique fusions with flavours like lychee, pear, watermelon, elderberry, basil, mint, lemongrass and limeflower.
Their unique characteristics make the sodas crisp and refreshing.
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The brand highlights that most mixers are made from ‘unpronounceable ingredients by multinational corporations, sweetened beyond recognition with high fructose corn syrup, and packaged in generic containers - adding nothing to the drinking experience.’
The products are described as ‘the world's best sodas’ delivering a ‘clean, crisp, completely ungeneric beverages that enhance the finest spirits and stand proudly on their own. Whilst highlighting the ingredients such as:
Inspired to change your relationship with Soda
to a focus on ingredients and design that change the consumers perception of use
• Organic agave from the Mexican countryside
• Quinine from the slopes of the Peruvian Andes,
• Ginger from the fields of Southeast Asia
• Salt from the Himalayas
They work with one of New York City's best young designers to develop ‘bottles as beautiful as the liquid they hold.’
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Future opportunities to align with the Premiumization & Indulgence trend
The rise of premium ingredients coupled with a sense of new occasion and purpose, normally found in
high end establishments, will become
an option for in-home
Truly gourmet at-home experiences
The prestige of health and longevity will create strong
growth in high-end permissible indulgences:
healthful treats will become more gourmet.
Health and indulgence blurring
Differing generational aspirations will be
understood: various incarnations of premium products will meet each cohort's expectations.
Relative opulence
Where will this trend lead?
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Thanks for Listening
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Contact
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If you are interested in understanding how Canadean’s market insights can be structured to help you to win new accounts, drive further growth into existing relationships, and/or capture new sectors and markets we would be delighted to arrange an exploratory session at your offices or over the phone in order to help define the best solutions for your business.
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Thorsten HartmannDirector of Consulting EMEA
T: +44 7887 712676E: [email protected]
