Half of brand managers plan to spend more on packaging, survey finds
- About 40% of more than 200 brand managers said they had made changes toward sustainable packaging during the past two years, according to a recent L.E.K Consulting survey. Most of the participants plan to continue moving toward sustainable packaging.
- Eight out of 10 of brand managers agreed packaging is important to their product’s success, and half say they plan to spend more next year. Twenty-two percent plan to increase their spend by more than 10%.
- Brands plan to increase package spending by 6% on average, while private label spending could jump 7%, according to the survey. More than 80% of brand owners said packaging is important to their product's success.
It’s clear food companies see great value in packaging, as many brands are increasing spending to improve their look and message despite tight margins. It makes sense that many of these packaging initiatives are centered around sustainability. Environmentally friendly products and packaging are increasingly top of mind for today's shoppers, and many people are willing to pay more for these mission-based claims.
“Younger generations really expect this as part of their loyalty to a brand, and they expect to identify with not only the product they’re consuming, but what the brand actually stands for,” Russell Zack, senior vice president of products and solutions at HelloWorld, told Food Dive.
Companies such as PepsiCo and Coca-Cola are responding to this demand by developing biodegradable water bottles made from ingredients like seaweed and mushrooms instead of plastic. DanoneWave and Nestle Waters, the world's largest bottled-water manufacturers, have teamed with Origin Materials to create the NaturALL Bottle Alliance, an initiative working to produce packaging from cardboard and sawdust.
Still, companies must remember that packaging sustainability can't come at the cost of dynamic, eye-catching design. In its packaging trends predictions for 2018, design firm Interact said bright colors and simple labels that get to the heart of the brand's message are likely to remain popular this year. The firm also noted that brand managers are looking for quirky, unusual packaging that consumers will want to share on social media.
This strategy has certainly proven successful for Halo Top — the #HaloTop hashtag has been used on Instagram 223,746 times alongside photos of its packaging, and this social media fame helped secure its place as the top-selling pint of ice cream in the U.S. It's a big reason why big-name competitors like Unilever have emulated the popular ice cream brand.
To stand out on crowded grocery shelves, many food and beverage leaders are developing out-of-the-box packaging. For example, Coca-Cola's Fanta introduced a spiral bottle that looks as if it's been twisted by hand. Although many industry leaders thought the new bottles wouldn’t work, Coca-Cola saw the move as a way to separate the product from the masses. This strategy has also proven lucrative for Boxed Water.
L.E.K also predicted that brand managers will likely lean on limited-edition packaging as a way to stoke consumer interest and boost sales. Nutella used algoritims last June to create a limited-edition of collectible jars in a variety of eye-catching colors, shapes and patterns, including zig-zags, polka dots and splotches. The 7 million different packaging designs sold out within a month. And Budweiser has released a lineup of patriotic packaging and another with the names of 11 states on bottles and cans where the popular beer is produced.
When investing in new packaging, it's important for companies to strike a balance between function, mission-based claims and standout design. If a company leans too heavily on label claims or packaging appearance, shoppers may not be interested enough to make the purchase.
- L.E.K. Consulting 2018 Brand Owner Packaging Survey