Report delivers the goods on the egrocery packaging market

By Rick Lingle in Retail Packaging on August 14, 2018

Four omni-channel packaging trends shaping the growth of online grocery shopping include convenience, sustainability, personalization and uniqueness, technology and performance.

 

In the wake of online grocery shopping growing at a 17.4% rate, traditional stores are being reinvented, merging together into an omni-channel world where consumers expect to be able to buy whenever, wherever and however they choose, with their smartphones.

Tetra Pak recently released its annual Index study for 2018 centered this year on growth and opportunities around egrocery, today’s fastest-growing channel for groceries. This year’s research is based on consumer research conducted in United States, United Kingdom, China, Saudi Arabia and Korea, a global market segmentation study, as well as interviews with etailers in the U.S., Europe and China. The idea was to better understand sales channels, value chain and packaging needs, as well as to get their perspective on the needs of consumers in their geographies, both now and in the future.

The report highlights four key trends shaping the growth of on-line grocery:

  • Convenience: The main driver for on-line consumer take-up, as time-crunched consumers look for new ways to make their life easier. Key opportunities include easy product replenishment, voice and convenient packaging.
  • Sustainability: Pressure on plastic and awareness of the circular economy will continue to grow, and recycling will become ever more important. Consumers want to know whether brands are "doing the right thing."
  • Personalization and uniqueness: Customization of products and personalization in the consumer journey will be important differentiators going forward. This is accelerating the direct-to-consumer trend and as many as 80% of consumer-packaged goods companies are predicted to migrate to this model by 2025.
  • Technology & performance: Super-fast delivery in as little as 10 minutes is expected by 2025, changing consumer behavior to buy more frequently and in smaller amounts, adding more complexity to the logistics. Supply chains will continue to be transformed by a raft of technologies, notably radio-frequency identification (RFID) and robotics, boosting efficiency and transparency.

 

The study also peered into the future, citing hot factors for 2025: augmented reality via smart packaging, the unboxing experience of egrocery packages, super-fast delivery, personalized packaging and online-only products and tactile technology that allows consumers to “feel” the product at the zero moment of truth.

“The rise of on-line grocery is a great opportunity for food and beverage brands, and packaging plays a key role in supporting their success,” says Alexandre Carvalho, director global marketing services, at Tetra Pak. “In particular, smart packaging helps drive greater transparency and efficiency in the supply chain, up and down stream, while also enabling a direct, interactive relationship with the consumer. We believe this rapidly developing technology, tried and tested by us since 2016 and now being deployed in Europe, can help our customers explore new avenues, driving growth in the years ahead.”

The link to the free, downloadable and insightful 29-page PDF of the report is found at the bottom of the next page.

Packaging Digest called on Tetra Pak to summarize key findings and respond to our questions. Pedro Goncalves, vp of marketing, Tetra Pak U.S. & Canada, provides the answers.

 

Overall, what was the single most surprising result?

Goncalves: That would be how business models are unfolding into different formats to accommodate consumer needs driven by different lifestyles and also to take advantage of current logistics chains. This creates an interesting value proposition and numerous possibilities for brands and retailers.

 

How critical are ecommerce and smart packaging for grocery sales?

Goncalves: Egrocery is the fastest growing channel today so huge grocery brands and ecommerce sites have jumped on this trend. In fact, research shows online grocery shopping is growing at a 17.4% rate, with traditional stores being reinvented, merging together into an omni-channel where consumers have expectations to be able to buy whenever, wherever and however they choose, with the smartphone as their compass.

Smart packaging is also becoming more critical as it allows each individual package to be tracked, monitored and interacted with throughout the supply chain, giving brands countless amounts of information to learn and develop moving forward. It’s inevitable that the packages will become smart in the future and brands should be paying close attention to this.

What are key egrocery differences in the United States compared to the rest of the world?

Goncalves: By the business cases shown in the report, we can see the U.S. is one of the most innovative markets. However, the U.S. market is a bit behind from the rest of the world in consumer engagement when it comes to posting reviews and images. But, we have reasons to believe egrocery is a no-return trend in the U.S. that we can relate to similar market movements like book selling, electronics and toys where today ecommerce plays a major role.

 

In what ways does the U.S. lag behind other countries in these trends? What can be done?

Goncalves: Compared to the main Asian markets, the U.S. lags behind in adoption and consumer engagement when it comes to buying groceries online, which is not the case in electronics and other gadgets. It’s important to remember the U.S. has a very strong retail network with different positionings that addresses consumers' needs very well. However, this same retail is investing heavily in building a strong ecommerce platform. And on top of that, we have companies like Amazon, Nutpods and HelloFresh which have a strong ecommerce knowledge investing in the food market. I’m sure grocery-related ecommerce will grow heavily in the next coming years in the U.S.

 

Next: Packaging takeaways, robotics and traceability

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