Virus crisis and food packaging

The real effects on the packaging industry from the present virus crisis is hard to comprehend. But regarding food packaging in the short to medium term we will see online grocery shopping grow, more focus on hygiene and price without losing the grip of sustainable solutions.

The virus has arrived and not very much is what it should be. Uncertainty and close to standstill are for many the situation and the long-term consequences are hard to fathom. Likely short-term results appear to be a severe downturn in the overall economy with double digit declines of GDP’s and a sharp increase of unemployment. Some of the hardest hit industries, so far, seem to be the hotel/restaurant industry, the travel/event industries and retail.

When it comes to retail this is not a general decline, the grocery retailing is in a much better position than other in that industry. Right now, people are obviously staying put, cooking and eating at home and are using the internet for socializing. Going out is rarely an option and food and beverages are bought from stores rather than restaurants. Also, pharmacies are open for business selling medicines as well as personal care products.

Where is this possibly going then?

On the consumer side the pandemic is speeding up adoption of trending behaviors like remote working but also online grocery shopping. And in the retail industry the situation is possibly increasing demand for retail technologies. The effects of this pandemic for the retail industry could include an increased e-commerce business and cashier free self-checkouts and more.

And for food packaging?

Demand for food packaging as such will be up as people are cooking and eating more at home. Now when many restaurants and food-service outlets are closed this is obvious, but as the crisis creates new behavior patterns some of them will stay, like cooking. Also after the euphoria when things get a bit more normal. There might also be increased interest for stockpiling of essentials. A new normal can very well be to have more than a few days of preserved food in the larder. This also goes for personal care and healthcare products.

Grocery e-commerce has so far been developing at very different paces in Europe. The UK is still in the lead according to an article in Forbes, followed by the Czech Rep. and Estonia. As a result of the virus pandemic the habit of ordering online and receiving, or picking up, your shopping is fast developing and will get a boost from the extreme situation we now are experiencing. This is a clear, and unpredicted, step in consumer acceptance and adoption of the channel. A habit that most likely will stay also when we are back to a more normal world. This needs to be supported by new and better packaging solutions. This is a field where there still is room but new and creative packaging solutions are developed and innovative delivery methods are introduced.

I don’t think that sustainability will go away because of the shifted focus. The consumer demand is too strong, and the concept of sustainable packaging solutions has gotten so ingrained in product and company positioning. Demand might temporary go down but if so, it will surely rapidly bounce back. It could however mean a changed view on initiatives such as not using one-way cups, introduced at certain coffee chains. People are also probably less interested in the packaging-free shops where you fill loose product in a bag of your own.

Sustainability is also related to the expected increase in general focus on health and demand for food hygiene. Packaging might even become appreciated by the consumers. It is visibly protecting and guaranteeing the freshness of the product. This could also be supporting the introduction of track and trace systems to a broader use. Blockchain technology is available, among other solutions, and is implemented as a useful tool in the distribution chain. This crisis could be a catalyst for increased use of technology for tracking and to verify product origin and what it has experienced before consumption. An increased cost for this service is hard to get around and can, in particular now, be a disadvantage.

It will take a while for the world to get back on track and increased unemployment and uncertain employments will make the average consumer more price sensitive than usual. As a result comes as a shift towards consumers demanding more value-products and private labels will have a field day if they play the cards right. Converters and others in the packaging industry will not be spared the general requirements for lower prices.

The future is right now not bright, but it is not a dark abyss either. We will have to adopt and be as agile as we can to survive and succeed also in the new tomorrow.

We want less plastic! And more of… what?

Yes, what do we want instead? We can’t always replace plastic with a renewable material. Then what about recycled plastic, more sustainable plastic that is efficiently recovered and that comes from an organised collection system? Does that sound a bit better?

Coca-Cola is in the news with their new line of bottles entirely made from recycled PET. Fantastic! Coca-Cola Sweden is during 2020 switching to only use PET bottles with 100% recycled material for their leading brands, Coca-Cola, Fanta, Sprite and Bonaqua, 40 SKUs.

This is not a small thing as using recycled material in food contact is a complex mission surrounded by of rules and regulations. The Swedish deposit system really helps here as it makes the recycling stream of PET bottles relatively pure.
Beverage bottles, and cans, are here collected and recycled separately and can in theory be turned back into new cans and bottles. Today around 85% of the distributed bottles are returned and recycled. Normally recycled PET tends to be cloudy due to unintended mixes and potentially tainted by other random plastic in the recycle process. This is avoided in a controlled stream like this.

In a recent report from McKinsey, “The drive toward sustainability in packaging—beyond the quick wins”, this is discussed, among other things. The report concludes that to successfully address the recyclability and waste challenges more collaboration is needed along the value chain. To manage increased recycling new infrastructure needs to be built and more closed system must be employed.

A closed and dedicated deposit system clearly makes recycling more efficient as it is separate and, closed. The Swedish deposit system is managed by Returpack, an organisation owned jointly by retailers and fillers together. When the deposit system was created also packaging converters were involved which makes it a good example of an efficient recycling structure.

Another brand owner who is blazing new trails in this field is Nestlé. The company is seriously investing in the development of new packaging concepts in their effort to have 100% of its packaging recyclable or reusable by 2025. The newly inaugurated Nestlé Institute of Packaging Sciences is unique and aims to support the process. The Institute is going to do its bit of development of functional and environmentally friendly packaging solutions and to address plastic packaging waste.

Nestlé is now investing a staggering €2 billion to explore the possibilities to widen the market for food-grade recycled plastics. The Institute will be involved but the main investment will be in driving the market for food-grade recycled plastics by boosting demand and by being ready to pay a premium.
They are now demanding 2 million tons over a period of time and are willing to pay for it, to create a market. Brilliant!

Plastic is at present needed, especially in the food industry to minimise food waste, and it is possible to create a circular economy also for plastics. To get there a system for collecting and recycling plastic must be in place. But there needs to be a corresponding demand as well. Today it is more expensive to use recycled materials than virgin. But with a higher demand and larger volumes the price should go down and thereby generate more demand.
Hopefully a process that creates a virtuous cycle spinning us towards a circular and healthy economy.

These are great examples of steps in the right direction to increase demand for recycled plastic materials. This will also drive the development of efficient systems for processing.
But, in the end, the consumers are going to do a big part of the job. We must not forget to inform and motivate to sort and return the empty packaging through this efficient system.

E-commerce and logistics – room for new concepts!

E-commerce will continue to grow, and that at the expense of traditional retailing. Online shopping will soon be the norm for shopping. The supply chain needs to adjust to this.

One man’s convenience is another man’s stress
One of the consequences of us shopping from home, or on-the-go using the phone, is a stressed logistics system. The result is visible, congested traffic and overloaded bottle necks.
The logistic system supporting online shopping can be divided in two steps. The first leg is from producer to a Customer Fulfillment Centre or CFC. The second is from the CFC to consumer. This is a very different supply chain from the traditional and we have all noticed the growing number of lorries on the roads. New innovative delivery methods are invented and tried out. Robots, drones and electrical vehicles of all kinds, self-driving and not. These solutions are mainly focused on the last mile delivery, that is from the customer fulfilment centre (CFC) to the consumer. This “last mile” transport can be organised in various ways, it can be home deliveries or to a pack-station at offices, supermarkets or in train stations.

Remarkable last mile solutions

Drones
Amazon introduced the concept of drone deliveries in 2016 and shared a few months ago a project update. They are still developing the concept and now showed us an increasingly sophisticated flying vehicle capable to deliver up to 90% of the packages they are delivering today. And safely too.
Wings has a similar solution but with a different spin.  They offer the same service, drone deliveries, but instead they link consumers to a range of local stores. An order is placed, and the drone picks up goods from the specified shop and delivers, all the way home. On trial in Australia, Finland and in the US.

Robots
Some drones are instead found moving around on the ground. In the UK, Tesco has started to deliver groceries using robots. A pilot test is located to Milton Keynes where Tesco is working with Estonian based robotics company Starship Technologies. A low 6-wheeled cart carries parcels, meals and groceries delivering to homes within a 3 km radius.
In the US Kiwibot is doing very much the same, home deliveries using robots, but in this case the 4-wheeled carts are bringing food from local restaurants. Also this is a concept in the building but it is inspiring to see all the creativity coming out to meet the demand for fast home deliveries.

The first leg of the supply chain
The above are solutions for shorter distances, the second leg of the supply chain. To get the goods from the producer to the CFCs lorries, train and boats are used, creating traffic overflow. That is until now. Until we heard of Magway.

British Magway has come up with the idea of building a network of pipes around the country. This planned grid of tubes, with a diameter of 90 cm, is supposed to carry goods, beneath and above ground. Instead of using trucks on the road, cargo will be sent around in pods in these tubes fitted with rails and powered by magnetism. An electric current will run through a track in the pipe, creating a magnetic wave that will drive the packed pods at speeds of 80 km/h.

Magway is an example of sustainable new thinking for a new era where consumers want their goods and that immediately. The normal distribution chain with goods-in-cases-and-on-pallets will with increasing online shopping soon not be the norm anymore.
Online shopping means that products are sent on their own or together with random other products. New methods are needed, and Magway has come up with a radical e-commerce delivery system that will reduce traffic on the roads and ease traffic congestion. The system promises reliable and predictable deliveries to CFCs and to a lower cost.

The first route planned is an 80 km route from northwest London to Milton Keynes, where large numbers of distribution centres are located. Already this year a 2 km test track will be built and tested.

This is an interesting period in time when online shopping is growing very fast and shoppers are expecting immediate deliveries. New solutions are really needed to gear up the supply chain for the new needs with lots of room for new thinking and developing of new concepts. All the above mentioned enterprises are going to be exciting to follow and I will absolutely keep an eye on all of them.

Is packaging less important for e-retailers?

E-commerce is showing double digit growth year out and year in. We are now on our way into the holiday seasons which will give the trade yet another boost. Clothing and electronics are still the two dominating categories. Food is not quite there, but coming strongly.plain-corrugated-box_10709490_250x250

Sealed Air recently made the results from an e-commerce study available, obviously with a packaging angle. The study was made in the US but there as here or anywhere the first physical encounter with the buyer/consumer is the packaging.

A staggering 66% of the interviewed also hold the view that “the packaging of their shipment shows them how much the retailer cares about them and their order”. I’m not surprised at all, you position your brand with packaging also in this business.

What is then irritating people the most when it comes to packaging and e-commerce? The top two items coming out of this study are concerning recycling and disposal of packaging. Here is room for improvement and a challenge for the innovative packaging industry.

My opinion is that packaging is just as important for the e-retailers. But today it seems forgotten and an opportunity missed by the e-commerce industry. I was at an e-commerce conference and trade show a few weeks ago. There was only one exhibitor who addressed the packaging issue. It was RePack who are offering a great reusable solution but this is a big and fast growing market and there must be space for more alternatives.

I need to go down to the store for some bread and milk. But I can’t find my Google glasses…

Or, are we finally technology mature enough?

Interpreting the results from a new IGD study the answer to the question is probably to be understood as “we are getting there”. We are not quite there but I am really impressed to hear the 43% of the respondents could see themselves using wearable technology when shopping for food and groceries. The respondents are in this case representing the UK but I would like to think of this as an indication.

This is good news for the digital technology industry. But it’s great news for all interested in smart and intelligent packaging. There are many interesting solutions available to get food packaging to communicate with the consumer. But the obstacle and main requirement for this to actually start happen is to have a receiver. That is somebody who is willing to listen to the communicating milk bottle on the shelf.

We can imagine that the shopper today has a smart phone which can be used for communication with smart packaging. The downside is that it involves an active and engaged operator. You cannot expect the average consumer to scrutinize every item using their phone in the supermarket aisles. This is a completely different thing when you have devices like smart glasses, smart watches or similar.

The interviewed consumers say that they are interested in finding better deals using the Google glasses. But printed electronics on packaging will also inform them about best before dates, product content, suggested usage and much more.

Consumers better informed at point of sale will also be good for the food waste problem.

smart glasses

Making stupid packaging smart…?

A bar code reader is not quite breaking news but it can still be used in interesting ways. I think that already in the early 90-ies that Electrolux had a concept fridge where bar codes were scanned and the fridge content was updated and made available. The result could be used for inventory (first in, still here?), cooking or shopping lists.

HikuHiku wants to support your supermarket experience by making the tedious preparing of the shopping list a bit more swift. Now this is an app that reads the bar codes of your empties at home and translates to product names to add to your list. This doesn’t make the packaging smarter but it makes smart use of packaging. This must be second best and is not a bad idea when you think of it. There are so many brilliant concepts and ideas for smart and intelligent packaging out there. Very few of them actually happen. There are many obstacles, cost is one. Then this could prove to be an example of a way to smarten up packaging by introducing and using parallel tools that adds functionality to products. It could even be that you empty the content from a pack into a jar or similar with a built in function. It can be an actual best-before-use time/temperature indicator or anything really. You would avoid the unit cost aspect as you can use my imaginary jar over and over again.

Another app using the barcode in an interesting way is recently introduced by EWG under Ewgthe name Food Scores. This is a bit more controversial as they have rated 80,000 food and beverage products according to what’s inside the stuff. You can with the app scan a product and get, via a very neat interface, a rather detailed analysis of the content and a number between 1 and 10. This might sound all good but is in my view a highly debatable approach. I think you risk over simplifying and worrying people for no reason. There are many ingredients that might sound more harmful than they actually are and then there are several ingredients that are uncertain and hard to classify.

Always remember that in an apple you will naturally find 9 E-numbers, all “added” by nature…

 

 

 

See through Carton

Elopak is together with Sainsbury’s launching a see through Pure Pak carton for juice. Four transparent windows placed on one side of the 1 litre package gives the consumer control over dosing the desired portion. The consumer can also easily visually see when it’s
time for replenishment of the home stock. Plus the more subconscious satisfaction
you get when actually seeing what’s in the package you are buying. http://bit.ly/qnrpUS

Now there is only the beverage can left to have a hole drilled for us to steal a look at the brew.

Beer on the loose…

Whole Foods Market in London is a great place to visit to pick up some quality organic food and beverages. It is also a place for spotting new trendy products and also innovative packaging solutions.

This is an however an example of the opposite. Beer sold “loose”… A variety of the Bring Your Own concept but in this case, bring your own keg. This is not a trend but more an interesting fact and a way for a micro brewery to get a bit of attention.

It might give the consumer a nice brew, but the one who washes up the keg is you.

Crafty canners

According to The Beer Institute 52% of all beer was in 2010 sold in cans in the US but only
3% of the craft beer segment came in cans. Craft brewers or microbrewers prefer bottles and kegs, or has preferred. According to an article in Packaging Digest we can now distinguish a shift towards the use of beverage cans.

More craft brewers than ever are now filling beer in beverage cans for several reasons. The distribution of canned beers opens up new channels like convenience stores and arenas. Also financial and logistical aspects are weighed in.

Still the consumers of craft beers are traditionalists and have gotten used to the idea of drinking from bottles. Using bottles is often an obvious choice for the small brewer with a challenging cash-flow looking for a used filling line. The use of co-packers opens up for alternative packaging solutions. Is this a trend or will the scepticism from consumers hold the can back.