The food and beverage industry—heretofore a well-established and stable (even staid) sector—is currently experiencing a number of disruptive innovations that are changing the basic working parameters of food and beverage packaging; and the relationships between the participants in the packaging value chain. Packaging has become a function in flux.
The traditional roles of food and beverage packaging—to preserve, protect and dispense product conveniently—had produced a well-established paradigm in which packaging producers (converters) have been able to drive innovations through the supply chain, while packers and consumers responded to innovations introduced by them.
The recent two-day Global Food & Beverage Packaging Summit (which might better have been called How to Manage Innovation in Food and Beverage Packaging) seemed to suggest that this traditional order of things is changing.
According to several presenters at the conference, a shifting and more segmented consumer demographic is looking beyond the traditional role of the package to demand a range of additional performance characteristics related to reducing food waste and increasing sustainability, and to respond to several distinct demographic sub-segments. These new consumers want packaging to respond to them directly (or, in fact, to the several thems) rather than the reverse; and each distinct consumer segment wants “holistic packaging innovations” that can address their specific performance requirements without compromising any of the traditional packaging functions.
The result is a significant degree of confusion as the drivers of innovations within the food and beverage packaging value chain shift. Uniformity is “out.” Individualization is “in.” Single-dose responsive packaging is becoming the new normal; and package suppliers are becoming innovative in response to a more informed and demanding consumer rather than initiating innovative change within the system by themselves.
Within this changing paradigm, several key concepts dominated the Global Food & Beverage Packaging Summit. These included, first, the very existence of a packaging function whose dominant characteristic is “Innovation” rather than (or, in fact, in addition to) the traditional roles of packaging to preserve, protect and dispense.
The second emerging characteristic of the revised packaging function, which is a direct result of the first, is that, to be successful, packaging innovation needs to be collaborative, both:
• Throughout the supply chain, and
• From the start of any project.
Nowhere was this critical characteristic better exemplified than in the panel discussion featuring DuPont, Dow and Ampac, which also emphasized the critical need for packaging innovation to fit into the existing infrastructure to be successful. This caveat further confirmed the “circular” need for packaging innovation to be both collaborative and all-inclusive from the beginning of the innovative process.
Subsequent presenters, and most specifically those from Dow and Kraft Foods, stressed the need for innovation to arise within the existing supply chain to attract both sponsors and stakeholders. This appeared to me to be a warning to “Innovate, but cautiously.”
One presenter also emphasized that, to garner internal and external support, packaging innovation needs to be within the existing supply chain to be economically reasonable.
In other words, within the initial basic parameters as stated above, package innovation needs to be stealthy (and, by definition, gradual) rather than categorically disruptive.
As is often the case, examples of “failed” innovations were the most instructive. Jennifer McCracken, sustainability director at HAVI Global Solutions, cited the “widget” bottle inserts used to induce foaming (a consumer preference) upon pour but which did not succeed because it was an inappropriate combination of materials which challenged downstream end-of-life (EOL) handling.
If there is an unspoken lesson here, it seems to be that marketing-based innovations need to be controlled by other collaborative functions from the start of the innovation process.
A third critical innovation caveat which several presenters, and in particular Chris Cornyn, chief innovation officer from Revolution Foods, also made clear (by implication, if not specifically) was the need to identify a “net” (holistic) positive outcome of any particular packaging innovation, even if it is not possible without being able to optimize that single packaging characteristic.
No single packaging innovation can be responsive to all of the core drivers of (or reasons for) that innovation; and, inevitably, certain innovations will contribute to a single package attribute (such as lightweighting, which encourages sustainability) while reducing another critical attribute (such as enhanced barrier). Or the reverse, in which decreasing moisture-vapor transmission rate (MVTR) through mineralization (although not oxygen transmission rate/OTR which is, in fact, thereby increased) eliminates the possibility to recycle the mineral-blended resin. In other words, sometimes resistance to innovation is not only realistic, but necessary.
The same might be said for the failed effort to persuade participants to endorse extended producer responsibility (EPR). Elisabeth Comere, director of environment at Tetra Pak, addressed this issue in response to a specific question from the audience. She suggested that industry efforts, such as the Carton Council, were more appropriate than efforts by individual companies to track and be responsible for their own post-consumer packaging.
Three additional critical package innovations were touched on by various presenters during the conference. These included:
• The increasing frequency of single-dose food and beverage packaging that Rachel Gualtieri, director, marketing and key account sales, from Sarong North America, an Italian supplier of single-dose form-fill-seal equipment, attributes to a changing demographic consumer profile and, most particularly, the disproportionate growth of on-the-go Millennials and single-parent households. These specific examples of well-defined consumer sub-sets have resulted in a greater number of small packages.
Three examples cited were (1) single-serve coffee packs (25% of current packaged coffee sales in the U.S.), (2) premade meal delivery systems developed, among others, by Amazon Pantry to service these same demographics and/or focused on portion-control (similar packages are being featured by Costco) and (3) Crown Technologies’ two-part Orbit metal closure, which translates a horizontal torque into a vertical lifting motion to facilitate the opening of vacuum packed glass containers.
• The use of packaging to develop new sales channels for traditional products was exemplified by Tracy Malkowski, global design manager from Campbell Soup Co. Her presentation focused on the company’s efforts to drive its V8 juice into additional retail sales channels by presenting the same brand also as a health drink, a protein drink and an infused water beverage.
• The growing impact of ecommerce (and eMarketing) on packaging was discussed by Chris Cetnar, senior scientist from The J.M. Smucker Co., who suggested that this is the beginning of a totally modified retail experience whose key features will be rapid and more frequent delivery patterns incorporating compostable packaging to assure easy disposal of sophisticated prepared meals.
Our most challenging conclusion, although not one formulated specifically by any single presenter, is that innovations in food and beverage packaging (and perhaps, all packaging) will always be a compromise; which, at the end of the day, will usually be driven by the business objective of optimizing market share and profitability of the packaged product, and not by the more theoretical constructs of package sustainability, unless this can be extrapolated to a market-share advantage, as Coke is trying to do with its PlantBottle.
Based on several presentations made at this conference, it appears that, at least for the time being, packaging continues to be a mechanism to obtain a greater business objective (market share, profitability) for the packaged product rather than an innovative process in and of itself.
Plastics and packaging expert Gordon Bockner is president of Business Development Associates (BDA), a packaging consultancy based in Bethesda, MD. You can reach him at [email protected].