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Consumer Packaged Goods Sustainable Packaging: The Consumer Perspective Staverton Park Conference Centre, 16 June 2011.

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Presentation on theme: "Consumer Packaged Goods Sustainable Packaging: The Consumer Perspective Staverton Park Conference Centre, 16 June 2011."— Presentation transcript:

1 Consumer Packaged Goods Sustainable Packaging: The Consumer Perspective Staverton Park Conference Centre, 16 June 2011

2 Agenda Datamonitor’s Consumer Packaged Goods Knowledge Center A snapshot of the Datamonitor offering Sustainability, packaging and the consumer Do consumers really care? If so, to what extent? Product trends and packaging concepts Sustainable packaging innovation platforms and examples

3 Strategy & Planning Consumer & Market Insight Sales & Marketing NPD & Innovation A value proposition to synchronize the way you work This presentation draws mostly on Datamonitor’s Consumer Insight research Assess new or non core categories Interpret trends quickly Market sizing/forecasting Enhance market positioning Better meet consumer needs by understanding consumption locations, and occasions Evidence led insight Map competitive landscapes globally Refine marketing strategies Protect/grow market/brand share Stimulate ideation and inspiration Reduce risk for new product launches and increase the chance of success

4 Consumer Insight deliverables form the basis of this presentation 2009 – all encompassing Sustainable Packaging Trends: Consumer Perspectives and Product Opportunities 2010 – sector specific The Future of Sustainable Food & Beverage Packaging The Future of Sustainable Personal Care Packaging The Future of Sustainable Alcoholic Beverage Packaging The Future of Sustainable Household & Laundry Care Packaging Accessible in multiple formats: CPG Knowledge Center –Interactive online report –Full length pdf report –Abridged report ppt. slidepack

5 Agenda Datamonitor’s Consumer Packaged Goods Knowledge Center A snapshot of the Datamonitor offering Sustainability, packaging and the consumer Do consumers really care? If so, to what extent? Product trends and packaging concepts Sustainable packaging innovation platforms and examples

6 Packaging and the ‘sustainability mix’… “Meeting the needs of the present without compromising the ability of future generations to meet theirs” About carbon, energy, materials, resources, processes and ecology; but it is also to do with ethics, responsibility/fairness Companies vary in interpretation –Some define it very narrowly –Some more broadly –Others lack any corporate definition TAKEOUT: One of the most public battlegrounds over claims of unsustainable processes centres on waste and, specifically, on packaging

7 Sustainable packaging is going to exert more influence on your categories of interest Sustainability is emerging as an industry defining issue for packagers and their customers Packaging is inherently environmentally harming Sustainability emphasis among packagers and retailers Escalating consumer concerns: it influences choices Governments and legislation changes are driving industry change

8 Widespread environmental concerns are driving the sustainability agenda, including in packaging 79% 82% Protecting the environment is ‘important’ or ‘very important’ Source: Datamonitor Consumer Insight Survey, July/August 2010 TAKEOUT: Consumers are engaged by environmental issues and packaging is a now a common target for criticism. It is an important ‘green’ issue… Feel ‘fairly well’ or ‘very well informed’ about how behavior impacts the environment

9 Source: Boston Consulting Group, 2009 TAKEOUT: Sustainable packaging is still understood primarily in terms of its ‘back-end’ environmental impact. But can be a first step in thinking about broader sustainability practices

10 Sustainable packaging is a consumer concern “At times it does feel like packaging is becoming ‘the villain’, when in reality it is a small player in the overall environmental footprint of the product. However, viewed through the lens of our consumers, packaging is the first thing and also the last thing that they experience with our brands. Therefore if it is important to our consumers, then it is important to us” Associate director, sustainability, for Procter & Gamble’s Global Package and Device Development 60% Grocery products have too much packaging

11 Source: Datamonitor Consumer Insight Survey, July/August 2010 Claim would lead to a more favourable perception… The ‘sustainability advantage’: sustainable packaging credentials can lead to more favorable product evaluation TAKEOUT: Packaging attributes can provide a positive halo. It can be used to genuinely inspire customers and enhance product/brand allure REDUCED PACKAGING 57% 55% RECYCLABLE/ COMPOSTABLE 63% 62%

12 Better than the technology of Coca-Cola. “It's indistinguishable”* Sustainable packaging ‘one-upmanship’ from highly consumer focused CPG companies… Already working on the next generation PlantBottle packaging 2011 – World's first PET bottle made entirely from plant-based materials 2009 – First of its kind beverage package made from renewable sources TAKEOUT: Every little bit means something in a ‘game of perception’. It can help tip the balance, especially when most basic needs have already been met From oil-based plastics to bio- based plastics

13 Mainstream brands are bringing critical mass to the sustainable packaging movement H.J. Heinz Co. will make its ketchup bottles using PlantBottle packaging. An “industry first partnership” February 2011 Parallels with how leading/ flagship brands have bought Fairtrade to the mass market The likes of Cadbury and Nestle embracing Fairtrade through signature brands has driven segment growth Since 2009 TAKEOUT: Flagship brands will accelerate consumer awareness/concern

14 Retailers are in the ‘frontline’ when it comes to discontent about excessive packaging TAKEOUT: As private label takes centre-stage in retailer strategy, large chains are looking at how packaging can support the marketing efforts Milk bags represent a 'flagship product' for Sainsbury's as well as helping it to raise awareness of its environmental credentials

15 There is a role for both retailers and manufacturers to be ‘ethical lifestyle enablers’: i.e. facilitating people to do things differently and better 28% Retailers’ ethical policies exerts a ‘high’ or ‘very high’ amount of influence on where one does MOST grocery shopping ‘Very satisfied’ with my personal efforts to protect the environment 12% 33% 9% Grocery retailers have taken a ‘high’ or ‘very high amount of action’ towards being more environmentally and ethically responsible 11% 16% TAKEOUT: Enable consumers to reduce environmental footprints by designing and stocking products that meet their core needs, but also conserve resources Source: Datamonitor Consumer Insight Surveys, April/May 2009; July/August 2010; Datamonitor Green Consumer Survey, June 2010

16 Consumers are more sensitive to sustainable packaging issues and perceive grocery products to be over-packaged 68% 71% 52% Agree that grocery products are over-packaged… TAKEOUT: High frequency packaging use and disposal = increasing consumer awareness. Strive for a lower packaging to product ratio as a minimum Source: Datamonitor Consumer Insight Survey, July/August 2010

17 Grocery products Food & beverages Beauty products 67% 60% 48% 54% 51% 30% 32% 46% 16% 18% Household care/laundry Alcoholic drinks TAKEOUT: Influenced by visibility: the cycle of consumption through to disposal is typically more pronounced for food and beverages than other CPGs Food and beverage products are perceived to be more over- packaged than most other FMCG items Source: Datamonitor Consumer Insight Survey, July/August 2010

18 Heightened sensitivity to the environmental impact of packaging is influencing consumer behaviour 37% If I see a product has too much packaging I will consider buying an alternative product… 36%37% Source: Datamonitor Consumer Insight Survey, July/August % ‘Highly’ or ‘very highly attentive’ towards whether packaging is environmentally friendly… 35%40% 49% TAKEOUT: Environmentally conscious consumers want to purchase high- integrity products in packaging reflecting their desire to ‘do their bit’

19 But the ‘really engaged’ segment is still comparably small… 18% Highly influenced by the amount of packaging when choosing packaged food products…(June 2010) 21%19% Source: Datamonitor Consumer Insight Surveys, June, 2010; April/May % Reduced packaging exerts a ‘high’ or ‘’very high’ degree of influence when making food and beverage choices…(April/May 2009) 27%26% TAKEOUT: There is no guarantee that large segments will consistently choose more ‘virtuous products’. This is also influenced by awareness gaps

20 How much does the amount of packaging influence your choice of product in these categories? (share of global respondents) Packaged food products Household cleaning/ laundry products Personal care/ beauty products Alcoholic beverages Very high amount of influenceHigh amount of influence Low amount of influenceVery low amount of influence …with little variance by sector TAKEOUT: They are buying the product not the packaging. Standalone messages that packaging has been improved or reduced are not enough Source: Datamonitor Green Consumer Survey, June 2010

21 TAKEOUT: But it must not be at the expense of the core consumption experience, just as Frito-Lay discovered in Improved sustainability benefits MUST co-exist with other core functionality that consumers value SUNCHIPS (US): Environmental benefits compromised the consumption experience!

22 Don’t forget the bigger picture about how consumers talk about, and interact with, packaging TAKEOUT: Multi-faceted expectations; consumers value packaging solutions that are practical, stylish, safe and environmentally responsible Source: Hartman Group/Datamonitor

23 Environmental considerations are not a primary driver of packaging preference TAKEOUT: Sustainability as a secondary consideration is apparent even when considering the ‘packaging mix’ more broadly. Consumers may buy brands with 'green' packaging, but ultimately they are persuaded by other factors Source: Datamonitor Consumer Insight Survey, July/August 2010

24 Sustainable packaging concerns align well with consumers’ desire to ‘de-clutter’ = practical value too! 57% of consumers believe that, as a society, we need to consumer a lot less to improve the environment for future generations 63% of consumers of consumers perceived that living a less complicated lifestyle has become more important to them in the previous two years. Packaging which is more sustainable, due to being less excessive and less draining on resources, can be a part of this important de-cluttering process. Additionally, with consumers becoming more engaged by the sustainable packaging/waste debate, the environmental impact of consumer lifestyles is becoming a point of personal reflection. Consumers will not sacrifice their standard of living, but they will begin to feel more negatively towards and responsible for wasteful consumption and that which does not contribute to a sense of a better quality of life. 49% of Americans, according to a Harris Interactive Poll between July and September 2009, embrace environmentally friendly behaviours out of a desire to reduce clutter in their home 59%54%65% 59%57%56% Source: Datamonitor Consumer Insight Survey, July/August 2010; National Geographic/Globescan ‘Greendex’, 2010

25 On a related note, be alert to the “damned if you do, damned if you don’t” reality TAKEOUT: It’s going to feel at times like you cant win ! Reduced packaging in grocery products may compromise product quality 20% 37% CONSUMER AMBIVALENCE Source: Datamonitor Consumer Insight Survey, July/August 2010 Wasteful packagingDeficient packaging Packaging is an important green issue Think products are over packaged Take for granted functional roles Fails to protect = the reason not to buy! INHERENTLY NEGATIVE PERCEPTIONS

26 Final thoughts regarding consumers and sustainable packaging… Don’t overlook the issue, tempting as it might be Sure, it’s rarely a primary purchase motivator BUT… Packaging and packaging communications are the first and last impression consumers have of many brands today They think products are over packaged; not a good start! The evident ‘value-action gap’ will be driven by lack of awareness, rather than a lack of intent Think of the ‘sustainability marketing advantage’ Sustainable packaging is a claim that can be physically substantiated, rather than other more dubious sustainability claims that still exist Ensure that improved sustainability benefits co-exist with other functionality that consumers value Don’t just meet consumer expectations; exceed them Elevates the importance of sustainability in the packaging ‘mix’. Elevates the importance of packaging in the sustainability mix

27 Ultimately it is a journey: you must demonstrate how you are becoming progressively better over time Stonyfield Farm takes website users through the “sustainable packaging journey”, highlighting the incremental steps taken over 20 years as well as what the future might hold NEXT: Andrew is now going to take you on an ‘innovation journey’ (after coffee) Consumer opinion ideas? Please share with me… Source:

28 Agenda Datamonitor’s Consumer Packaged Goods Knowledge Center A snapshot of the Datamonitor offering Sustainability, packaging and the consumer Do consumers really care? If so, to what extent? Product trends and packaging concepts Sustainable packaging innovation platforms and examples


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