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How Retail-Ready Packaging Disrupts Food, Beverage and Pharma Markets

How Retail-Ready Packaging Disrupts Food, Beverage and Pharma Markets
The global market for shelf-ready packaging is seeing substantial demand centered on food & beverage, pharmaceuticals, and cosmetics. Source: Global Market Insights, Inc.

Robust growth of the global retail sector in recent years has fueled the demand for low-cost packaging materials, which will drive retail-ready packaging market trends in the coming years. Retail-ready packaging (RRP) or shelf-ready packaging (SRP) refers to packaging products in custom-designed multipacks that simplify stocking and filling of shelves for retailers. Examples include the use of perforated tear-off-panels to eliminate the need for store staff to use box cutters to open the case and prescored folds for fast display setup, among other design characteristics.

Global Market Insights forecasts that global retail ready packaging market size will reach $51 billion by 2026 at a 4.2% CAGR, with substantial demand from applications across food & beverage, pharmaceuticals and cosmetics sectors. The manufacturing of RRP products has significantly been driven by the availability of raw materials, labor costs and rapid industrialization in developing economies.

Hrishikesh Kadam, Research Content Developer at Global Market Insights, answers six questions about this market.

What key factors impact RRP industry trends globally?

Kadam: Driven by the ever-expanding retail sector, governments and private groups are increasingly spending on the development of retail infrastructure, which is certain to augment RRP market share. In addition, the presence of stringent regulatory frameworks pertaining to the use of plastics in packaging products will fuel the demand for recyclable and reusable RRP such as paperboards, corrugated paper boxes, and folding cartons as well, for years to come.

The rising trend of recycle-ready packaging will have a significant impact on packaging manufacturers in this market, as most governments are also focusing on reducing their environmental impact aligned with economic growth. Introduction of recyclable packaging has already started and could soon expand to most of the RRP manufacturers, suppliers and retail customers.

Why will shelf-ready packaging see increased consumption?

Kadam: Shelf-ready packaging helps retail stores to achieve massive cost savings in packaging materials. Further, the use of RRP materials in stocking makes packaged products easier to spot for customers, resulting in better sales. Significant efforts and investments are usually made in improving aisle efficiency for consumers, ensuring consistent demand for suitable RRP products from physical outlets.

Shopping from physical stores helps avoid extra charges, such as packaging and shipping costs, and can be obtained immediately rather than waiting for shipping. Further, it is much easier and faster to return a defective or unwanted product while shopping in-store rather than shipping it back to the online retailer. The open nature of some innovative SRP design allows shoppers to easily pick the preferred pack without disrupting the rest of the contents.

How are brick and mortar retailers driving sustainable packaging demand?

Kadam: Rapidly growing popularity of online shopping platforms has outpaced the growth of brick-and-mortar sales. However, despite the hype around ecommerce and online retail, a large number of consumers still prefer shopping at physical stores. Statistical data suggest that nearly 82% of millennials, including those who engage in online shopping, prefer in-store shopping.

This can be attributed to a variety of reasons. When it comes to buying food, groceries, or cosmetics, in-store shopping is still the preferred choice for majority of consumers as it allows them to check the products for quality or freshness. In addition, people who enter physical stores are much more likely to make purchases than those who visit online shopping websites or platforms.

How will food & beverage applications influence RRP manufacturing process?

Kadam: Majority of shoppers turn to organized retail stores for buying food, beverages, and grocery supplies. RRP is extensively used in retail stores and supermarket stores for stocking food products. SRP manufacturers are anticipated to find extensive opportunities in the near future from food storage applications.

For example, British packaging company DS Smith recently partnered with UK-based Morrisons Supermarkets to supply a more sustainable form of RRP for the supermarket chain. Morrisons had revised its packaging policy last year to minimize its use of plastic packaging. Meanwhile, DS Smith had been developing a new SRP design using sustainable fiber-based corrugated that the company claims is 100% recyclable. The move also exemplifies how sustainable trends influence retail ready packaging industry.

Why is the pharmaceutical sector emerging as a major RRP consumer?

Kadam: Packaging plays a key role in transport, storage and identification while helping suppliers fight against counterfeit drugs. RRP saves cost and offers improved transport efficiency owing to the innovative designs of the packaging. The ink and corrugated used to produce these packaging are considerably lower, enhancing the overall cost-efficiency of the production process and supply chain.

With prescription drug sales anticipated to surpass $1.84 trillion by 2024, a tremendous demand for RRP products is expected across the pharmaceutical sector. Rising prevalence of trauma as well as bacterial and chronic diseases will undoubtedly bolster the manufacturing and consumption of pharmaceutical products.

What are the advantages of automated retail-ready packaging production?

Kadam: Proliferation of the retail industry and a steady rise in the popularity and demand of shelf-ready packaging in recent years is encouraging RRP manufacturers to integrate advanced technologies to make retail product packaging more effective. While retail ready packaging on its own offers a wide range of advantages, implementation of automation technologies could make the product more efficient, ecological, and more affordable for supply chain operations.

Automated case packing helps to considerably reduce the size of shelf-ready cases, allowing a number of products to be fitted onto a single pallet. More compact packaging materials will significantly minimize storage space as well as the number of delivery vehicles on the road. It will also reduce the amount of material required in product manufacturing and make empty packages easy to flatten and recycle.

Global Market Insights Inc.’s report on the global retail-ready packaging market was published December 2019.

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