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In the face of mounting environmental concerns and ever-evolving consumer purchase behaviors, the packaging industry is undergoing a profound transformation with a new list of requirements and expectations. Engaging in discussions surrounding the challenges, solutions and future opportunities is more crucial than ever before for both packaging buyers and suppliers.
At a Forest Products conference earlier this year, we invited a panel of packaging buyers to discuss their perspectives on:
The discussion between the three packaging buyers centered around the challenges of supply assurance, the necessity of agility and responsiveness, and the importance of innovations in affordable sustainable solutions.
The aftermath of the pandemic prompted the need for supply assurance. Companies need agility and flexibility to adapt to the evolving market dynamics and supply chain challenges that persisted beyond the pandemic.
They also believe that being able to respond to sudden market changes is also crucial for success in today’s highly competitive and dynamic market. One example of this is the profound impact of social media trends on consumer behavior. The so-called “TikTok effect” saw products rising and falling in popularity in an erratic fashion, with anticipated sales often being overshadowed by unexpected breakout stars. The ability to swiftly launch new products, embrace frequent brand refreshes and accommodate brand turnovers are integral to business success in an ever-evolving marketplace.
Another challenge for us is sustainability and its communication. It’s about educating our customers and internal stakeholders about paper products, using a language they understand.
Sustainability is another key area of focus, not only due to ESG needs but also in response to a growing interest from our younger, more environmentally conscious audience. Clear communication about the recyclability of paper-based products is vital for educating consumers and stakeholders.
Our packaging buyers’ visions for the future of primary packaging are clear: more sustainability, and less waste.
For many sectors, there is a shift away from traditional plastic packaging towards paper-based alternatives. There are commitments to ensuring recyclability, using more recycled materials and reducing excessive packaging. One of the examples given is the phasing out of gift boxes for products below a certain price point, as well as making sure that all packaging materials are made to be fully recyclable and not mixed.
For our brands dealing with liquid products, such as shampoos and perfumes, using fiber-based primary packaging is a real challenge. The packaging must meet specific requirements, such as ensuring durability throughout its shelf-life, integrity during transportation and resilience in the humid environment in which they are often used and stored.
Despite the challenges, our packaging buyers are enthusiastic about the possibilities and are eager to explore creative solutions in this area with willing partners.
Where secondary packaging is folding boxboard or cartonboard boxes, the challenge lies in making recycled material boxes as visually appealing as those crafted from virgin materials. This is especially true of more high-end products, where there is a certain expectation and perception of how the products should be presented, said our panelists.
Besides aesthetics, the printability and resistance of recycled paper boxes have posed challenges. One of our speakers said that they found that they had to increase the grammage of their boxes to achieve the same resistance with recycled materials. With targets to reduce their packaging intensity, they found little incentive to transition their folding boxes from virgin to recycled material.
Where secondary packaging, or in some cases tertiary packaging, is corrugated boxes, all three buyers said they generally accept both virgin and recycled material-based options. The choice of which to use may vary depending on local market preferences or the characteristics of the product. For instance, heavier products often opt for kraftliner boxes as they provide better structural integrity and durability.
We have started challenging ourselves about excessive packaging and whether it is necessary to have secondary packaging in every case.
But do we need the corrugated box? When speaking about the necessity for secondary packaging in transporting products, some companies have already started to challenge themselves as part of their attempt to remove excessive packaging.
One option they have explored is establishing a closed-loop system where plastic boxes are sent to and returned from retailers. They are also working with their partners on a project to develop a robust solution that eliminates the need for a corrugated box when selling to retailers.
Molded fiber technology presents an exciting frontier in packaging solutions for our group of speakers. This technology allows for experimentation with various shapes, designs and finishes, adding an element of aesthetic appeal to the eco-friendly package.
Given that existing product bottling lines are already functioning efficiently, the speed and efficiency of these molded fiber packaging production lines will play a pivotal role in their adoption. Being able to scale up production is also key to this becoming an accessible and practical solution.
Molded fiber packaging also has potential in secondary packaging, where it could replace or combine inserts and dividers that are currently used in boxes, with indentations at the base to secure products. A panelist shared their experience of developing a custom molded fiber folding box for a limited-edition product. This innovative design incorporates 3D printing for aesthetics and practicality during transportation.
All of our panelists feel that they have a good level of understanding of the complexities within the supply chain, including the fundamental costs associated with materials, labor, energy, and more. However, they feel there is a need for greater transparency in the supplier-buyer relationship.
For example, while they recognize energy costs as part of their operational expenses, they are unaware of the full extent to which energy impacts their suppliers’ overall operations. As a result, the sudden increase in energy costs last year caught them by surprise. By improving transparency within the partnership, they can gain a deeper understanding of the factors that influence costs and subsequent price fluctuations, as well as anticipate future challenges. Being able to help with forecasting and anticipating risk, they said, is extremely important for packaging buyers.
The transparency goes both ways. When we have a close relationship and clear communication, that’s when we can really work together.
The conversation needs to extend to having a mutual understanding of the cost drivers for both parties. This involves analyzing the effects of inflation on consumer spending and revenue, exploring strategies to examine end-to-end costs and finding innovative ways to reduce costs and optimize operations.
With the abundance of sustainable packaging options and definitions in the market today, it can be difficult to determine what it really means. For example, while some are moving towards substituting plastic packaging for paper-based options, others suggest that recycling and reusing existing plastic materials could also be a more viable option.
For this reason, paper packaging companies should be mindful that there is a risk of being out-competed by other packaging materials, said our panelists. Industries like glass and plastic, which are actively pursuing sustainable innovations, are also striving to develop eco-friendly solutions. While fiber-based packaging is certainly a viable option, it’s just one of many choices available to companies today.
They also believe there is no “one correct answer”. Instead of completely eliminating certain types of packaging material, looking at sustainability holistically and being open to different solutions is key. As with any new technology or innovation, the challenge lies in finding a balance between cost, speed of adoption and widespread acceptance.
Interested in more insights from packaging buyers? Head to our dedicated procurement hub for more articles and learn more about how we are helping those in the FMCG industry to overcome the business risks associated with volatile packaging markets.
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