Key Trends that Shape the Future of Packaging

According to Euromonitor’s packaging data, the beverages, beauty and personal care, dog and cat food, and packaged food industries accounted for four trillion retail/off-trade packaging units in 2022. However, more companies will hardly meet their 2025 sustainability commitments. Waste management efforts are under scrutiny to comply with stricter legislation to meet pushing consumer demands. Companies need to be part of the solution. Global consumers are well-intentioned regarding sustainability, proactively recycling, and adopting the “less is more” mindset by reducing plastic use.

               According to McKinsey’s report, sustainability in packaging is a megatrend shaping the packaging industry, with consumers becoming increasingly worried about the environment and the impact of packaging leakage. In response, new stricter sustainability regulations are emerging on multiple fronts with increasing frequency. However, regulator focus and approaches vary considerably by region and diverge even further when viewed at the country or state level. Pressure to reduce packing waste has increased dramatically in the face of global consumer sentiment aroused by visceral images of packaging leakage into oceans, and regulators are responding to address the public outcry.               

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One often-noted factor challenging firms’ ability to achieve their stated sustainability ambition seems to be the underlying complexity of their product portfolios. For example, out-of-date technical requirements in consumer companies often determine packaging design. It is not uncommon for companies to have product specifications carried over from earlier-generation products. These frequently go unchallenged because no organization has meaningful incentives to revise the specifications from a sustainability perspective. Indeed, McKinsey’s global survey found that 75% of companies consider packaging sustainability only after the product concept has been finalized. Sustainability remains the number-one driver for packaging design across all industries and regions.

Using product claims and packaging to communicate sustainability is rising as more companies are backing up their efforts on trusted certifications. Yet, according to Euromonitor’s Opportunity Tracker, the sustainable packaging groups of claims have the lover number of online SKUs and represent less than 1% of the share of the digital shelf in 2021, which scrapes online sustainability sales in 15 countries and seven industries. There are growing efforts to tackle the issue. However, companies still need to accelerate the adoption of sustainable packaging globally. When comparing consumers’ desired packaging features versus online sustainable packaging product availability, most companies focused on offering “can be recycled” packaging. However, more efforts are needed to increase the availability of circular solutions like recycled materials and refillable/reusable packaging to meet consumers’ needs.

Environmental concerns are top of mind for consumers in emerging Asia. Viewing sustainability issues as a key factor in strategic planning will enable packaging companies to determine how sustainability can be used as a differentiator to attract consumer interest and drive growth. Emerging Asia remains the key growth market for many packaging companies to target. With a strong increase around sustainability, it will become critical to think through the “green narratives” of any growth strategy along with related strategic options. We recommend considering three factors in your strategic planning to seize the opportunity.

Ariticle by: Asst. Prof. Suwan Juntiwasarakij, Ph.D., Senior Editor & MEGA Tech