2016 CPG & Pharma packaging trends
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1 2016 CPG & Pharma packaging trends Packaging, the key communication element of your integrated marketing strategy, is changing. Learn the most important 2016 trends regarding big data, marketing efficiency, innovation...
2 Top trends for Process trends Packaging becoming more integrated to marketing Design becoming less de-linked from the process Changing supply chain dynamic Serialization Drive for data / analytics to prove success 2. Innovation trends Increased use of personalization Increased refresh rate Focus on packaging enabling relationships post the sale Growth in uptake of Smart / Active packaging 2
3 Process Trends 1
4 Packaging as an integrated element of the marketing campaign Packaging is one element of the marketing campaign; that gets executed along with others (web, store materials, advertising ). Packaging is becoming increasingly important, however, notably by the changing shape of both customer communication and retailing. Packaging has a crucial role to play in omnichannel marketing success. Packaging can enable increased success, however challenges remain: Packaging is strategically placed but tactically executed Packaging is not involved early enough in the process, companies are only slowly breaking down operating silos 4
5 Improving design team integration Design and consumer insights represents on average 35% of the time to market for new products. Yet these steps are typically not connected to the overall packaging development process. New packaging development process (time spent from ideation to shelf) Many brands feel that the design phase is too subjective and yearn for something more measurable and even predictable regarding the future product success on shelf. They are looking for ways to speed up the ideation phase, and make the execution phase more efficient. Technology will enable this to slowly improve in % Production 9% Prepress 6% Distribution 6% Packing 20% Consumer Insight 15% Ideation 20% Briefing 20% Conceptual Design Source: Esko research covering review of CPG & Pharma workflows (2015) 5
6 Changing supply chain dynamic: brands working closer with integrated suppliers Packaging suppliers are valued knowledge partners to the brands; however there is a general lack of integration of both data and people. Brands have the opportunity to unlock the hidden potential of their supply chain, enabled by smart technology: Identify key suppliers Identify the value they can create Create closer ties & integrate Packaging management solution 6 Packaging execution & converting
7 Supply chain security: serialization In life sciences, the counterfeit drug market generates billions of dollars worth of business and kills hundreds of thousands of people each year. Over 40 countries have introduced new laws to regulate 75% of the world s prescription medications as they travel through the supply chain by To achieve compliance, supply chain participants must master different track and trace and serialization requirements for each country: Implementing systems capable of generating, managing, and storing unprecedented volumes of regulated data Exchanging data with trade partners and government agencies 7
8 Drive for data / analytics to prove success Driven by the ever increasing complexity of packaging, marketing teams will be challenged to quantifiably demonstrate the value packaging brings. If they not already, marketing teams will be turning to analytics / big data as a key part of a packaging management solution to bring visibility to the relevant data. There will also be an increased need to connect best in class packaging management solutions to the other business systems used by the enterprise (ERP, PLM.) Key functionalities sought Operational Dashboards with project status, progress, overviews... Analytical and trend reporting that helps identify process strengths and gaps: number of projects created or completed, number of revisions, measured lead-times on tasks, measured rework cycle rates, % of artwork rejects at each stage of a project etc. 8
9 Innovation Trends 2
10 Increased use of personalization Technology advances will enable increased use of packaging personalization as a route to connect to the consumer. Digital printing is capturing brands attention by creating opportunities to engage consumers on a local, personal and even emotional level. Mintel suggests that In 2016 we will experience the tipping point for digital package printing, as brands move beyond using it for limited editions and personalization, and capitalize on its economic and speed-to-market advantages for mainstream package decoration. 10
11 Continued growth in SKU refresh rate Data from a InfoTrends study shows that there is a growth in the SKU refresh rate across verticals. That means that managing the files and data associated with the growing number of SKUs will only become more challenging. Not to mention the risk that excess variation may end up damaging brand equity % 7.1% 10.3% 13% 10.7% 20.3% 17.9% 39.1% 17.9% 50% 31.6% Are you equipped to manage your SKU growth? % 34.8% 27.8% 17.9% % 8.7% 10.1% 14.3% Pharma & Med Health & Beauty Food & Beverage Customer Goods & Electronics Rapidly growing Moderately growing Slightly growing Flat Declining Don t know Source: The Future of Digital Packaging Workflows, InfoTrends,
12 Focus on packaging building relationships after the sale Packaging is increasingly used to build engagement with customers App / Gamification related services Social sharing & engagement The use of smart packaging is growing. According to Mintel, mobile interaction now accounts for 64c of every $ spent in the US, brand owners are experimenting with sophisticated technologies like near-field communication (NFC) and Bluetooth low-energy (BLE). As this technology becomes more widespread packaging, especially for non-perishable goods, could be set to become something that is not only tangible, but no longer disposable. It could become an integral aspect of the ongoing brand experience. For brands it could run the gamut from initial callto-action marketing, through to a CRM access point; and for consumers it could be the loyalty signifier, storage system and architecture that in the future houses our most prized possessions. 12
13 Cleaner design drives adoption of smart packaging The growing number of on-pack information is competing for shoppers attention Consumers and regulators demand more information Brands want to add increased marketing content Consumers want less confusing on-pack clutter Looking ahead, the concepts of clean labeling and clear on-pack communication are set to converge with increasing amounts of data becoming available via linked digital channels. Cleaner packaging doesn t mean reducing the content, just making it available in different ways: Online Mobile enabled Integrated to online shopping / data warehouses 13
14 Conclusions Challenges 1. SKU proliferation brings obvious benefits but if not managed well can lead to cost increases 2. Lack of visibility in the design phase, plus lack of predictive analytics of what will work and what won t 3. Poor management of packaging processes leading to: Quality challenges Increased cycle time Potential for recalls 4. Increasing competition Retailer pressure: private label competition, on-shelf restrictions Small startups with innovative ideas, selling via ecommerce Embracing mobile and ecommerce (omnichannel strategy) 5. Awareness of changing regulations / strategies to manage efficiently 14
15 Conclusions Strategies to manage trends & challenges 1. Brands are developing a stronger linkage than ever between packaging and marketing to enable increased use of: Personalization / customer engagement Localization Technology as a disruptor 2. Brands desire to speed the ideation and design phase of the process, whilst making the often already optimized execution process more efficient 3. Ever increasing desire for brands to gain visibility over their processes and data to take back control in order to: Control their process: increase efficiency, reduce risk & error whilst gaining control over their IP (and assets) Control & manage cost Gain visibility & traceability via data analytics Make the increasingly important task of platform integration to other systems easier / possible. Increased brand protection 15
16 How can Esko help? Our key customers are Brands in Food, Beverage, Pharma, Health & Beauty, as well as Household goods Packaging and display designers Print service providers Packaging and label converters Esko offers packaging management solutions to help you understand and tackle Campaign management Artwork management Approval management Asset management Want to know more? Talk to us at or visit esko.com/packagingmanagement FEB Esko. All rights reserved. All specifications are subject to alteration. All trademarks and logos appearing in this document are the property of their respective owners
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