CPG companies spending more to use less packaging
In keeping with the society-wide movement toward environmental sustainability, consumers are demanding less packaging. A new study indicates, however, that this trend won’t translate into less spending on packaging in the coming year.
Of 250 CPG brand owners polled, 75 percent reported that they plan on spending more on packaging over the next year, according to a study conducted by L.E.K. Consulting. These numbers demonstrate a notable increase from 65 percent in 2018 and 40 percent in 2017.
While 85 percent of respondents said that they had been working toward changing packaging materials to make them more recyclable, there were other significant trends in the packaging landscape discussed in the study which all require investment in innovation. CPG companies have made moves into easier-to-open packaging (57 percent), single-serve packaging (51 percent) and packaging with different formats, printing and textures to match the new, premium products that they contain.
The general public has become more aware of the problems of excessive packaging in recent years for a numerous reasons, one being the tremendous volume of boxes and packaging waste generated by shopping via e-commerce.
Amazon.com, in an attempt to curtail some of this, has instituted rules for its sellers requiring streamlined packaging and is imposing punishment in the form of fines for those who fail to use it, reports Mashable. These restrictions are not solely for reasons of sustainability, though, as bulky packaging from vendors also leads to additional shipping weight for Amazon if it is holding the inventory, driving up costs for the e-tail giant.
At least one startup has even attempted to close the gap by creating reusable versions of packaging for major CPG brands that can be left on the front porch and picked up for re-use. Loop, a “circular” e-commerce platform created by startup TerraCycle, entered into partnerships with Walmart and Kroger earlier this year for pilots in four cities.
CPG companies are in some instances pioneering different versions of packaging for products sold direct-to-consumer. Proctor & Gamble, for example, released a lighter, sturdier box of Tide specifically to be purchased and delivered from Amazon.com.
- Most CPG brands planning to increase spending on packaging – Consulting.us
- Amazon requires sellers to use less packaging – Mashable
- Can Loop make packaging reusability a reality at scale? – RetailWire
- E-commerce forces CPG brands to think differently – RetailWire
DISCUSSION QUESTIONS: What trends in CPG do you think are most responsible for driving the projected higher packaging costs? What sort of packaging innovation should CPG brands concentrate on, and how can they make the most out of their increased investment?