We are only 26 months away from the calendar year milestone 2020, and the business predictions abound. For some reason this number has become a date associated with many predictions. Maybe the year is given importance simply because of the 20/20 vision metaphor, or perhaps it is due to the amazing predictions over the past ten year’s, many of which have come to fruition at least in part. For example cryptocurrencies, predicted to take off, will be worth more than four trillion US$, and robots are becoming part of our everyday lives as driverless cars are introduced. The truth is that consumers are irrational, making any prediction an extremely difficult, if not a laughable, endeavour. We only need to look at how many of us guessed Donald Trump would become President of the United States to see how off predictions can be.
Very often the obvious trajectory of human behaviour is a poor predicator of future opportunities, and our “predictions” about what people are going to do are guesswork at best. To provide a balanced view of what the future of packaging in 2020 and beyond could look like, we have outlined a series of scenarios leveraging insights from other industries and our 35 years of managing packaging rebranding programs. As Peter Drucker is famously quoted, “It’s hard to predict the future, so you need to create it”. Following this idea, we have created potential scenarios that create multiple futures so, you can decide which is most plausible. Ultimately, the future direction may incorporate elements of each, and there will always be factors that turn predictions upside-down. We will leave it up to you to decide which of our possible futures you believe will become reality.
Scenario One: Sustainability Now
Governments are initiating taxation programs to curb the level of products going to landfill, as only a fraction are being recycled, irrespective of how many blue boxes programs are available. In order for municipalities, cities and states to reign in the level of material going to landfill and to pay for the cost of recycling items such as plastic water bottles, taxes on all products are being imposed specifically in regards to recycling costs.
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Following Europe’s lead where retailers are responsible for gathering and managing recycling products, we predict a shift towards retailers and packaged goods companies marketing items though bulk delivery systems and a significant reduction towards smaller package sizes. Packaged goods industries, who may want to increase sales of consumer packaged goods, will band together to actually take over the recycling of their products’ packaging, as Coke and PepsiCo have done in certain European countries in response to the threat their products would be costlier to buy.
Scenario Two: Private label will dominate sales
In the U.S. private label sales are well below those of Europe and other markets such as Canada. Retailers are realizing sales growth and greater margin will can only be achieved through their private label programs. The current grocery and mass merchant market dynamics have retailers competing for ever shrinking margins while the additional revenue gained from national branded product manufacturers listing fees and in-store marketing dollars is being taped out. We will see private labels also evolving beyond conventional commodities into food service, meal replacement programs and added-value online and offline platforms that will drive both retailer brand stickiness and greater sales growth amongst mobile savvy millennials. Packaging graphics and designs will go through major changes from more sophisticated graphics to Brother compatible labels and printing technologies, all examples of how national brands have marketed themselves. By using custom label printing Melbourne, this will help your product’s appearance and elevate its branding style. Read this case study to see how modern designs could energize a private label.
Image Source: SLD
Scenario Three: Hollowing of the middle class
In spite of government policy shifts, the middle class is still being hollowed out. A product of both automation, which is seeing people replaced by robots, to more efficient systems and processes eliminating job redundancies faster than people can graduate, the middle class is shrinking. The commoditization of white collar work from the banking, management consulting and accounting industries also does not not help matters. The impact on packaging will be significant as more companies develop a two-prong programs, developing packaging design and brands to appeal to the growing lower income population, while new super premium brands that raise the bar for the competition will be introduced to appeal to the affluent consumer.
Scenario Four: Growth of disruptive micro brands breaks up shelf blocking
Similar to what has occurred in the beer industry where micro breweries now represent a respectable percentage of beer sales, the growing interest of locally produced foods will tip the scale of power. As the cost of manufacturing drops and access to raw material and supplies rise, the market will respond with the growth of regional brands that have scale and strong connections to the communities they serve. The impact to package design will be slowly realized, but significant as supermarket shelves known for their strong shelf blocking national brands will be fragmented by many new entries filling the shelves on a regional level. This may help overcome the rapid decline in sales found in the centre of the store. The growth of locally manufactured foods will coincide with an increase in ethnically focused foods as more of the North American population growth comes from to immigration from around the globe.
Scenario Five: No branded packaging
Of all the possible scenarios this one has the design industry the most concerned. The rise of new retailer-to-home drones and robot delivery systems could eliminate the need for branded packaging as we know it. The only hurdle for online growth for familiar, commoditized goods, is the cost of delivery. The advance of automated delivery will reduce the cost of online purchases, and the reliance on the actual primary packaging will diminish as the purchase location will shift away from the physical stores to online platforms such as Amazon. Our own proprietary research conducted four years ago predicted that physical branded packaging will decrease in importance as more of the decisions move online. The pragmatic side of packaging will be relegated to product protection and shipping ease. To meet these evolving needs efficiently, consider modern manufacturing techniques like injection moulding Melbourne for customized, durable, and streamlined packaging solutions.
Scenario Six: Rise of Stricter Labelling Laws
The health of populations raised on sugar, salt and high calorie cheap, processed foods has reached a climactic level with no end in sight. As governments struggle to care for aging boomers and the cost of health care rises, or for many access disappears, one reaction will be new packaging labelling laws and legislations to help shift consumers away from unhealthy eating behaviours. Everything will be up for consideration as governments’ forecast identify a gloom and doom outcome to the current trend. There is already talk in Canada of a sugar-drink tax, and certain municipalities, such as New York City, have imposed size restrictions on soft drinks. We have seen the impact of labelling laws on the tobacco industry, and new packaging regulations implemented in the U.S. and Canada will usher in a decade of on-going packaging regulation changes, creating constant flux and confusion. The added cost of ongoing relabelling will put margins and profits under greater pressure. Packaging will be in a constant state of change. Read this blog for more about the importance of nutritional labeling in a health-conscious world.
Scenario Seven: Digital Packaging Salvation
With the growing need for product information, from ingredient sourcing to nutritional information, packaged goods companies will be challenged to find container sizes big enough to include all of the required information. In the health and drug industry this will be exasperated with the need for smaller packaging with more health statements. Secondary cartons will be all of the rage, not to protect the bottles they contain, but to allow for a greater packaging surface to include all pertinent information. However for all actions there is a counter movement that will solve many of these packaging challenges. It will come from an unlikely partner: the personal wireless device with the addition of augmented reality capabilities built right in. The future of packaging will include a virtual label with supporting videos, testimonials, and photos of the actual farms and farmers coming life in the palm of the customer’s hand. Marketers will have a whole new platform to tell their brand story on packaging as the millennial mobile-enabled generation spend more time on their phones than taking in the physical world.
Irrespective of which scenario you believe will have the biggest impact on packaging, the reality remains the industry will be going through some major shifts. Hopefully all for the better as we have all grown up with the ability to shop stores, scan shelves and shop online through a visual connection between the product and the consumer using labels and graphic design. However, some of the forces shaping how we buy may make packaging and blue boxes a thing of the past.
