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Report delivers the goods on the egrocery packaging market

Report delivers the goods on the egrocery packaging market
Grocery and packaging are evolving through convenience aligned with smartphone-equipped consumers.

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

What are the key takeaways from the packaging trends and developments?

Goncalves: The key takeaway from the report in regards to packaging is to note the trend towards smart packaging technologies for egrocery. When we talk about smart packaging, we’re referencing unique digital codes that allow each and every product package to be given a unique identifier. These create an interactive channel with individual consumers, allowing brands to have real time conversations with the consumers. This then allows brands to continuously improve the shopping experience and make it ever more personalized for the consumer.

Another key takeaway as it relates to packaging is the continued pressure amongst consumers for sustainability, especially in regards to plastic and awareness of the circular economy. Consumers wonder if brands are "doing the right thing" and packaging is a key part that egrocers need to consider when answering that question. 

The report points to HelloFresh as the world’s leading meal kit subscription. What role does packaging play for the brand?

Goncalves: HelloFresh is a very customer centric brand that seeks to meet the demands of consumers to make healthy, delicious meals, easily from home. Their commitment in always delivering a new experience and quality brings value to their customers.

One of the key challenges for meal kits companies is the waste—which is connected with the environmental concerns from consumers. Having packages that will keep the food fresh, do not damage the other food inside the kit (especially fresh vegetables) and do not require extra packaging to reach consumers is a major concern. For example, Tetra Pak cartons like the Tetra Recart are often used in HelloFresh because they are shelf-stable, made of renewable materials, are lightweight and represent little risk in damaging other ingredients in the meal kits when compared to heavier packages like glass and cans.

Few should be surprised about the growing role of robotics. In short, what's happening?

Goncalves: As you saw in the report, robotics to pick-and-pack products was the number one trend for 2025 in the etailer survey. We’ve seen retailers like Ocado and Amazon that have already cut the “click to ship” cycle down by roughly 50 minutes through the deployment of tens of thousands of robots. China’s Alibaba has perhaps the most advanced use of robotics. The retail giant has a fully automated process from parcel sorting to loading trucks. Looking ahead, secondary packaging will likely be modified for use with robots as they currently struggle with handling materials like shrink wrap.

Please summarize the role of code-based engagement and traceability.

Goncalves: Code-based customer engagement technologies open up a one-to-one communication channel between the brand and consumer. This solution positions brands as leaders in innovation and provides consumers with a new brand experience. As included in the report, Puleva launched the Puleva Tido app in March 2018. With this, users scan the unique code carried on the top of every Puleva Tetra Brik Aseptic Slim 200 package and they get a point for every scanned code, enabling them to participate in drawings for a range of prizes.

Traceability is made possible through solutions like Tetra Pak’s smart packaging where each package is printed with a unique code that is traced throughout the supply chain. This process pins every point the package or carton touched throughout the manufacturing, distribution and sale process, providing valuable insight into production and sales data.

The full Tetra Pak Grocery 2018 report can be downloaded for free here.


MinnPack 2018 (October 31 – November 1, Minneapolis) is part of the Midwest’s largest advanced design and manufacturing event that brings you the latest in materials, automation, packaging and more. ___________________________________________________________________________________

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