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Driven by just about every consumer trend you’ve heard about in the last year, CPG brand owners are planning big changes to their packaging, according to a new survey.
L.E.K. Consulting, a global management consultant firm, says it polled 250 brand owners and discovered 75% expect to increase packaging spending in the coming year, up from 65% last year and significantly up from the 40% who said so just two years ago.
What gives? L.E.K.’s survey shows CPG marketers’ desire to dress up their packaging mirrors the evolution of consumer tastes, and no doubt the influence of millennials’ new set of expectations.
The respondents said packaging changes reflect consumer demand for more premium products, healthier products, environmentally sustainable packaging and changes brought on by the shift toward ecommerce in the CPG environment.
It’s increasingly convenience that brands seek — which ranges from creating new, easier-to-open containers (57% of respondents), developing more single-serving packages (51%) and increasing their placement in convenience stores (49%).
And consumer convenience also figures into why brands are changing their ecommerce packaging. “As more consumers choose to shop online and have goods shipped directly to their homes, brands will need to make changes to packaging to protect against breakage or to maintain freshness during the delivery process,” the report says. “It is also important that any packaging changes maintain a consistent look and feel across multiple channels.”
The report was authored last month by L.E.K. executives Thilo Henkes, Jeff Cloetingh and Amanda Davis Winters.
Consumers demand more specialized products, even within brands, and 42% of brand owners say they’ve already expanded their marketing of “subproducts,” as this report calls offshoots of a brand’s major product. The respondents to the survey on average say they’ll introduce 91 SKUs over the next two years. Brand owners predicted only 45 in last year’s study.
In this survey, 60% of brand owners say they’ve introduced all-natural or non-processed products in the past two years, and 53% introduced “health-focused products” during this period. Those changes, of course, are reflected in new packaging.
And these brand owners think they’ve already provided quite a bit of change environmentally. The survey reports around 85% of respondents say they’ve made at least one significant change to packaging substrate material in the past two years, most frequently because it increased ease of recycling. They envision this trend will continue through 2020.