Future of the package and its many functions

As our world resembles that of the Jetsons more each day, a very interesting revolution to watch for is occurring in consumer packaging. We are still very far from swallowing our morning cereal in the form of a pill, but that doesn’t mean that the cereal box itself hasn’t been changing. This article will review six areas of evolution in packaging, using case study examples and interviews to generate some useful insights. Each area has its own challenges; hidden within them, however, is a wealth of opportunities.

Interactive packaging

While we will cover electronic packaging in another section of this article, there is an “intermediate” space that exists between the paperboard cereal box as it is today and its flashing lights electronic counterpart. That area taps into the exponential growth in smartphone adoption to launch the consumer into a digital space. The most familiar example of this may be the QR code via which one can scan a package through to a designated destination. While there are plenty of ways to effectively use QR codes, the scan-through rates are quite low. As with all interactive technology, part of the problem is that it has been applied with little vision, making users skeptical.
Perhaps a more promising, though still gimmicky, counterpart to this for packaging is the use of augmented reality or AR. AR allows for the overlay of digital information that is accessed by scanning a marker using a camera (be it on a smartphone or computer). For a further breakdown of this technology you can visit our June 2011 issue. AR has been more actively used in Europe and Asia than in North America, however it is an ideal technology for packaging. Its applications can range from fun game-like applications to full out instructional aids.
Brands aimed at young children have definitely experimented with this technology. In fact our standard cereal box of Kellogg’s Frosted Flakes has been transformed into a media centre using AR. Another example of a similar effort is by Pringles chips, which turns the familiar face on the package into a marker that launches a series of games. Both examples used the package to create an engaging environment for the consumer. There are also more practical examples of ways to use AR. One of the most famous being Lego boxes, which demonstrate to consumers how the content of the box can be put together.
Much like QR codes, AR requires innovative ideas to create value for consumers. The risk of being labeled gimmicky remains. Marketers and designers need to remember that the time needed to scan and possibly even obtain a new application to use the technology needs to be a worthwhile use of the consumer’s time. One technology to watch for is mobile visual search. This allows you to scan your environment by using your phone camera to search the Internet. It’s largely consumer-centric because the marketer does not direct the search results. As such, one can imagine walking into a store, scanning an object and comparison-shopping almost instantaneously.
Most importantly, one advantage of all of the above listed technologies is the ability to collect information about consumers and use it to predict future spending habits and target markets. This type of information is now commonly called big data—and printers would definitely benefit from being experts in its collection and use.

Digital and/or Short-run packaging

After recently attending several events and conferences focused on this topic, it’s clear that short-run packaging is top-of-mind for converters and brand owners alike. There are a lot of market opportunities to cover in this area, and so this section will be broken down into personalization, micro-brands, and SKU management. Each of these has been the target of digital printing applications. However, it should be noted that short-run might not always mean digital. There are conventional short-run processes on the market as well, particularly in labels. Likewise, with increasing press widths and speeds, not all digital jobs are short-run.

Personalization

One of the most recognizable uses of digital print in packaging is seen through personalization. A very recent high impact example is Coca-Cola’s Share a Coke campaign, which features names on bottle labels. Interestingly this is not a 100% digital campaign. The label shells are preprinted using traditional processes, with just the name being applied digitally. This is done in order to save time in production, as the campaign is high-volume despite being personalized. Coca-Cola is not the first to feature this type of initiative. Heineken beer, Heinz ketchup and Excel gum are some additional examples of being able to adorn a product with your desired text. These campaigns are all known to boost sales, however they are typically only offered for a limited time, making the sales increases temporary as well.
Another form of personalization is localization or regionalization. This one is a bit less obvious to consumers, as it occurs at a city and not an individual level. We see this used in POP displays directed at specific target markets in different locations. It may be as simple as printing different pricing information depending on the region, or as complex as making the artwork city, or even store specific.

Micro-brands

In recent years we have seen growth in the number of micro-brands popping up in consumer goods, particularly in the grocery stores. As an example, while KRAFT may dominate the salad dressing aisle, more and more we see smaller scale brands take ups some space, even in large chain stores that typically prefer the ease of distribution offered with large companies. Whether it’s a micro-brew beer, a local hot sauce, or some artisan chocolate, it needs a short-run packaging solution. Further, these products are typically premium brands, which means that the quality of packaging must also be quite high.
Digital offers the quality advantage required by these brands as well as the short-run capability and a quick time to market. With new brands, response time is critical as the initial package may go through several iterations before attaining some success.
One of the difficulties mentioned by printers at the Pira Conference is in changing the printing process once a micro-brand begins to be adopted on a larger scale. This is particularly true for labels. Some believe that there is a compromise in quality when switching to traditional processes, however this too is changing. With advances in screening and plating technology such as HD Flexo for example, the ability of flexo to produce extremely high quality work is near.

SKU Management

In addition to a greater number of brands, there is no question that within the mainstream brands we have seen tremendous growth in the number of options offered within each product line. If you need proof of this, a simple walk down the toothpaste, vitamin or chewing gum aisles should suffice.

At the Pira conference, consultant Kevin Karstedt shared the impact of this trend using a product lifecycle diagram. We know that marketers launch new SKUs within a product line because it is profitable for them. However, as a new gum flavour enters the market it is not likely to have the same printing volume requirements as a mature flavour. As such a short-run solution is required. Likewise at the tail end of the product lifecycle the volumes start to drop off. While it is hard for marketers to let go of brands, they cannot manage an endless set of options. Short-run printing allows them to hang on a little bit longer.

Sustainable packaging

For years now sustainability has been a big driver in the packaging industry. Organizations such as the Sustainable Packaging Coalition (SPC) in the U.S. have come leaps and bounds in generating information about what makes a product sustainable. They have also made a great effort in pushing the information all the way upstream to brand owners and designers. For example they have created software called COMPASS for designers that allows them to identify how to create an eco-friendly package from the outset. The matrices that the application uses do not stop at packaging attributes such as substrates; they also include looking at consumption of raw materials, emissions and others.
On the Canadian front, the Packaging Association (PAC) has an initiative called PAC Next that has a similar mission to reduce waste in packaging. This group is a bit newer, but has made great inroads into gathering information, providing educational seminars, both in person and online, as well as many other initiatives. The Executive Director of the program is Alan Blake, a 30-year veteran of Procter & Gamble, where he spent his time leading sustainability initiatives. This is a great fit as many sustainability initiatives start with brand owners.
The backbone of packaging sustainability requires looking at the designs from a lifecycle perspective. Retailers have also been driving these changes, with Walmart at the forefront of demanding sustainable packaging from its brand owners. With the buying power of this retail giant, it is no wonder that we have seen improvements in this area.
From a consumer perspective, it seems that packaging reduction has been a key quality. Brands have been identifying ways to visibly reduce the amount of materials that protect their products. A good example is bottled water, where many brands have reduced the plastic thickness of the individual bottle. There are also changes in snack aisles. As an example, Nabisco cookies have reduced the amount of packaging by 25% as well as changing the way the consumer interacts with the product. Rather than opening from the top and using a wire to secure the top back down, the new package features a resealable front. This is visually appealing and practical as the wire in no longer needed, reducing the amount of materials used. However, companies also have to be careful reducing the amount of product along with the package, as it has caused some consumer backlash. People do not like paying the same price for less products. This is not a new occurrence, with companies responding to slow economic climates by attempting not to raise prices in the face of rising costs. The worry is that savvy consumers can perceive tying product reduction to sustainability initiatives as greenwashing.
Another hot trend in the sustainability game has been the use of compostable or biodegradable packaging. This is primarily packaging made from a variety of plant-based products. Perhaps the most well known are cornstarch-based PLA products, but there are many variations. Numerous companies are developing new substrates to reduce cost and/or increase quality in this market. I spoke with John Goeden, President and CEO of Precision Colour Graphics, who has just patented their biodegradable bag, which he explains is the first to be certified by the Biodegradable Packaging Institute. Partnering first with Tuffy’s Pet Foods, the company developed the bag, which disintegrates into dirt within 90 days at commercial composting facilities. One of the difficulties of all of these products is that they are not quite there to make claims for “at-home” composting. Goeden explained that this is because it is difficult to know what conditions each compost bin would have, thus no generalizations can be made.
Increasing the ease of package breakdown without compromising the delivery of the product is the ultimate challenge. There are many well-known brands trying these substrates – from Sun Chips, to Wrigley’s Gum, and others. Hopefully with more brands buying in, the costs will come down, making these options more mainstream. Further, perhaps future legislation or taxation initiatives could improve adoption.
Another fun concept in packaging that has been catching media buzz is edible packaging. With any sustainable initiative the goal is to get to as close to zero waste as possible. With the ability to eat the package itself, there would quite literally be nothing left behind. Bob’s Burgers in Brazil launched a wrapper that you can actually bite into, pairing it with a marketing concept that the burgers are so good that you cannot wait to unwrap them!
The company WikiCells is another great example, creating food-based packaging that can even flavour the food it is holding. An initiative launched by Dr. David Edwards out of Harvard, WikiPearls are containers for a variety of foods from yogurt, to ice cream, to cheese and others. These fun membranes have a 6-month shelf life and can be washed just like an apple.

Transformer packaging

A much more niche area of packaging that is a definite offshoot of sustainable packaging is the concept of transformer packaging. This is where the package itself is reused or turned into something useful, and thus is not discarded. A very simple example of this would be the reusable bag. This could be a canvas bag with store branding, which works as a marketing vehicle. That same bag can be launched as a special initiative. For example in Toronto, retailer RW&CO launched a campaign which rewarded their customers with a $1 discount if they brought in their RW&CO reusable bag obtained during a previous purchase. Of course it doesn’t necessarily have to be a very sturdy bag (which tends to be more costly to manufacture). Sometimes, a fun design is enough to prompt a consumer to reuse the bag. Here are examples of some fun bags that are likely keepers. You can check out http://weburbanist.com/2010/09/05/great-in-the-sack-15-weird-wonderful-shopping-bags/ for more fun examples.
Reuse in general is very popular, and very important in the sustainability market. Another example of this is a 2010 initiative by eBay, where 100,000 durable shipping boxes meant for reuse were given away. These boxes featured a fun design, as well as being made purely of recycled content. The eBay Green Team claimed that if boxes were reused five times, 4,000 trees and 2.4 mil-lion gal-lons of water would be saved and enough energy would be con-served to power 49 homes for one year.
In addition, companies such as TerraCycle, based in Toronto, are now helping consumers organize around these concepts for larger scale benefits. An example of a TerraCycle project is the collection of Kool Aid Jammer packs to be made into lunch boxes. Traditionally these would be individual projects, thus not attaining a high impact. However, with some organization around the concepts the site reports that to date over 2 million packs have been collected!
To finish off the category there are some other fun examples brought to us by designers in the furniture category. Tom Ballhatchet designed a TV box, turned TV stand. Not only is the box easier to transport because he added wheels, nothing is thrown away. Another example is Adrian Candela who created a nightstand design out of Ikea cardboard boxes. You can watch the video to see how easy it is to assemble.
http://www.tomballhatchet.com/
http://www.adriancandela.com/

Smart packaging

Perhaps the must futuristic of the categories in this article is smart packaging, sometimes also referred to as intelligent or active packaging. This type of packaging typically features a specialty ink or chip that allows it to fulfill a variety of functions far beyond just containing the product. Smart packages can monitor freshness and quality, make the package safer and/or more convenient as well as provide a multitude of benefits within the supply chain.
James Lee, the Director, Technology and Innovation at Jones Packaging spoke on the topic at the Ryerson Colloquium in March. He shared that a smart package can be viewed as data point, a switch, or a data collector. Further, he qualified that printed electronics are not meant to replace traditional electronics, but rather can be viewed as a paper enhancement.
There are many exciting applications of smart packages. One that you may have seen in stores is the use of thermochromic (temperature sensitive) inks to identify if a product is at the correct temperature. An example of this is the “cold certified” Coors cans. However, it can get even more impressive with well-integrated printed electronics as we have the ability to identify a variety of environmental factors. A recent partnership with Bemis, a flexible packaging supplier, and Thinfilm, a printed electronics leader, is taking these concepts further, developing the ability to customize how this collected information can be communicated wirelessly and with whom.

Smart packaging technology is also popular in anti-counterfeiting efforts. Smart labels can be used to identify a product’s authenticity. This can be used to protect the product brand and the consumer. There are a variety of anti-counterfeiting technologies in the market. Printed electronics is one of those options. Overt or covert strategies can be used to identify the product’s authenticity. While it is important to make sure that your newly purchased bottle of vintage wine is authentic, authenticity becomes absolutely critical when it comes to pharmaceuticals, for example.
Extending anti-counterfeiting concepts are track and trace initiatives. One can imagine that products are sold at different prices around the world, adjusted to the cost of living. Likewise the manufacturing, safety, and distribution requirements differ between countries. One problem faced in the consumer goods sector today is the illegal rerouting of products for profit. For example a product that is suppose to be sold in the Asian market ends up in Europe. Not only does this cost the brand owner money, it can also be unsafe. As such, smart packaging technology can be used to identify where a product comes from and where it is sold, thus alerting the brand owner to attempted rerouting.
Of course, perhaps the most fun look at smart packaging is from a marketing perspective. Packages have the ability to light up, make sounds, and grab attention in all-new ways. There are many experimental campaigns in the market from Cheerios cereal to Bombay Sapphire gin. Often, these concepts are paired with smart shelf technology that activates the electronic functionality of only the first row of products on shelf. In addition to the marketing standout value, these shelves can be used in a practical way to manage inventory, display price, etc.
While the hype of smart packaging is certainly focused on printed electronics, it is important to note that other technologies that bring the package to life have been around for a long time. The ability to buy NFC and RFID chips which are then applied to products has been used for inventory control and anti-theft for some time. I had the opportunity to speak with Mike DuBois, printed electronics champion, about PDIM (Pre Deposited Images in Metal) technology, which has a 30-year history. Here the metal particles are deposited onto a thin and completely flexible film. In addition to offering flexibility, there are fewer inconsistencies with manufacturing as conductive inks are not used. Further, the product is food safe. In fact you may have unknowingly used PDIM while using a microwave oven to heat up a pizza that promises a crispy crust.
While Mike agrees that the possibility of these technologies can offer endless new opportunities, he shares that one of the biggest obstacles facing the market is simply a lack knowledge from brand owners and designers. Educating these key stakeholders about the availability of this technology is critical to its adoption. There are many organizations that can help everyone involved attain more information. Organizations such as IDTechEx, which hosts a printed electronics conference and the Active and Intelligent Packaging Industry Association are a couple. Further, the APEX Expo is also a good event, and if you needed more incentive the 2014 show is in Las Vegas!

Social packaging

One cultural movement that cannot be ignored in any industry is the proliferation of social media. After all, packaging can be seen as another form of communication. In 2012 the McKinsey Global Institute released a study assessing the social economy and making recommendations on how to unlock its productivity potential. One of these reports (The social economy: Unlocking value and productivity through social technologies, Consumer packaged goods) addresses packaging specifically.
One of the claims of social media is that it has the ability to gather people at enormous speeds and scales. Thus, companies can reap the advantages of better communication across the supply chain. This is important in the packaged goods sector because the supply chain can be quite sprawling. More importantly, however, social media can be used to generate consumer insights. We already discussed the proliferation of SKUs in the market. New products enter the market very frequently, and social media has the ability to predict their success. In addition social media can be used to generate new product ideas, adding to the SKU rat race. The study estimates that currently only about 3% of new products released into the market are blockbuster successes, with a 75% fail rate for the others. One can begin to imagine the impact of information gathering from the masses drastically changing this landscape. Social media has created the focus group of the future.
Further, not only can social media be used to solicit information about new products, it also has the ability to track the health of existing products. Thus, companies can be quicker to market, choosing to eliminate brands where necessary prior to carrying large losses, or bolstering marketing efforts of those that are just a bit off track.
The irony of social media is that with the number of users in the billions, it has in fact made the world smaller, breaking down communication barriers between regular consumers, corporations and governments, as well as improving access. There has been a power shift, so to speak, within which consumers can voice their applause or concern on a massive scale. Thus, brands need to be equipped to respond appropriately.
The immediate impact in packaging can be seen from companies soliciting consumer advice to create a new product or flavour. An example of such a campaign is the new Lay’s “Do Us a Flavour Canada!” in which consumers are asked to create a new chip flavour using the company’s Facebook page as a communication portal. Creating marketing buzz is another avenue for the technology with examples like the Doritos Crash the Super Bowl campaign in which consumers submitted commercials they made and the winners aired during the Super Bowl.
Lastly, another possible use of social media is to appeal to the consumer’s conscience. A great example of this is the President’s Choice “Free From” meats program, which supports local farmers and event places their pictures on the packages themselves (you can watch the commercial on YouTube of course http://www.youtube.com/watch?v=I-ItIkOf0eg )! So while it is not always obvious how social media can be used to make or save money, at this point we can all agree that there is plenty of opportunity hidden in this market.
We have covered a broad spectrum of concepts and technologies that increase the functionality of packaging today and in the future. As we move forward in this promising sector you are likely to notice packages that fit in with at least one if not many of these categories. This movement toward packaging that can “do more” will be highly beneficial to stakeholders. A world of opportunities awaits!