Materials

The Future Of Packaging In FMCG: Symptoms Of The Innovation Deficit In FMCG Packaging

__
<p>The fall of the Berlin Wall in November 1989 was an iconic event. Let's visualize Ingrid, a young mother of two from erstwhile West Germany. On the day the Wall fell, Ingrid was shopping for a typical weekly basket of FMCG products in a supermarket in Munich. Imagine that a time machine transported Ingrid to 2021, to a similar spot in a Munich supermarket. After recovering from the future shock, what would be her impressions about packaging?</p><p>An almost mind-numbing choice of products and variants. More intricate pack shapes and more eye-catching decoration. A bigger range of promotions and price-points (with the numbers preceded by a strange new currency symbol: &euro;). Much more coverage of health, nutrition, regulatory and environmental information on packs. But wait! Ingrid finds that it is no longer even necessary to go to the supermarket - most products are available to order from her home computer or mobile phone - those strange devices everybody seems to be talking or tapping on - via something almost magical, called the 'Internet'...&nbsp;</p><p>But will Ingrid find genuinely new functionality in packaging, or even experience great improvements in the more familiar functions? Will she notice that packs are much easier to open, close, handle, use, evacuate and dispose of? Will she find some packs that are worse on some of these attributes? When she orders products online, will she receive a big box that contains the same product that is available in the supermarket, protected by extra layers of packaging? And might some of these have leaked in transit?&nbsp;</p><p>(We can do a similar 'thought experiment', this time picking a shopper from Shanghai, Mumbai, Durban, or Sao Paolo. Her experience will of course be very different, but that will be largely due to the context).</p><p>Let's look at the impact on the environment. Despite the high profile of sustainability and significant efforts by the industry to make packs more environmentally friendly, the Ellen McArthur Foundation* finds that: "While delivering many benefits, the current plastics economy has drawbacks... After a short first-use cycle, 95% of plastic packaging material value is lost to the economy. A staggering 32% of plastic packaging escapes collection systems, generating significant economic costs by reducing the productivity of vital natural systems such as the ocean and clogging urban infrastructure. More than 40 years after the launch of the first universal recycling symbol, only 14% of plastic packaging is collected for recycling. When additional value losses in sorting and reprocessing are factored in, only 5% of material value is retained for subsequent use. Plastics that do get recycled are mostly recycled into lower value applications that are not again recyclable after use."... "Each year, at least 8 million tonnes of plastics leak into the ocean... Estimates suggest that plastic packaging represents the major share of this leakage. The best research currently available estimates that there are over 150 million tonnes of plastics in the ocean today. In a business-as-usual scenario, the ocean is expected to contain 1 tonne of plastic for every 3 tonnes of fish by 2025, and by 2050, more plastics than fish (by weight)."</p><p>Even after allowing for the many numerical uncertainties, the complexities of these issues and the key role played by actors outside the FMCG/Packaging industry, it is clear that step-changes in packaging sustainability have not yet landed at scale in the market. This is despite some truly inspiring 'islands of excellence' achieved via concerted efforts by some players in some places.</p><p>To summarise, the symptoms of the innovation deficit in FMCG packaging over the last 25 years may be clustered into three themes:</p><ul><li>Holistic user experience</li><li>Adaptation to eCommerce and the digital economy</li><li>Environmental impact</li></ul><p>And, remarkably, these deficits exist despite the invention and technical readiness of more advanced technologies that can address these gaps.</p><p>&nbsp;</p>
KR Expert - Abhay Bhagwat

Core Services

Human insights are irreplaceable in business decision making. Businesses rely on Knowledge Ridge to access valuable insights from custom-vetted experts across diverse specialties and industries globally.

Get Expert Insights Today