Strategy & Innovation in Packaging

Dimensions 2006, Melbourne

Poh Len Pek GM Strategic Marketing

© Copyright Amcor Packaging (Australia) Pty Ltd, 2006

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Presentation

1. Trends & Drivers 2. Conclusion

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6 Innovation

1 Environmental & Legislation

5 Consumer

Trends

4 Retailers

2 Supply Chain

3 Globalisation

Packaged Goods

Trends & Drivers

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Environmental Pressures/Legislation Pressure to reduce environmental impacts of packaging

• Product stewardship, Sustainability Australian Government’s Agenda

• Recycling • Reducing waste to landfill • Resource reduction

Metallic Ink

HOW Recyclable? Biodegradable? Eco-friendly? (renewable resource) Re-usable?

• How do consumers interact with packaging post usage?

• Act as toy? Re-use container?

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Australia Pioneer in recycling paper & cartonboard Instigated curbside collection Industry leader of the National Packaging Covenant Recycler of industrial cartonboard and paper

Global PET recycling operations in USA and Europe Aluminium cans: Key contributor to recycling Flexible packaging: Global innovator in lightweighting

and restructuring of materials for waste minimisation

Environmental Pressures/Legislation Amcor Initiatives

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Consumer

Supply Chain Technology driving change

Entire supply chain linked

Real time info

speed of response

Flexibility required

Retailers exerting dominance over supply chain to reduce cost

Robust packaging Fit end-to-end purpose without over-engineering Role of transit & protective packaging

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Globalisation Borderless world

• 3 Regions: Nth America, EU, Asia • Global retailer scale & buying power • Emergence of BRIC as economic drivers • Off shore-manufacturing (low cost markets) New suppliers, new competitors Cost pressures local production

Mergers & Acquisitions Consolidation & Rationalisation

Food and Beverage market: 60% packaging industry • Consumer goods market drives packaging future • Retailers increasing influence on packaging future

Source: Pira

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Globalisation Corporate terrorism

• Forced Vs Suspected tampering • Copycat Tampering

Counterfeiting

How to move beyond tamper proof or tamper evident?

How would packaging validate authenticity?

How packaging would help inspire confidence and trust?

Multi Tamper Evidence closure 1. Tamper evident overcap

2. Induction seal 3. Slit band

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Retailers Retailer dominance a global phenomena

Retailers’ dominance on supply chain (SC)

SC cost reduction programmes driving packaging changes

• Retail Ready Packaging • RPC, Roll cages • Shelf Ready • Display Ready • Private Label

• RFID

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Shelf Ready Packaging & Multi Packs

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"The brands in the market have certain common design elements suggesting this is a pasta sauce, or this is spaghetti or whatever. You should be able to identify what kind of product it is when you look at the package design,"

"You can't offer something the customer hasn't seen before. If you come up with a green cola bottle, nobody will buy it. It would feel strange. You've got to have red -- that signals it's cola."

- Aldi MD

Private Label Positioning

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I WANT TO LOOK AND FEEL GOOD Personalisation, Rewards, Indulgence Individualisation: “ME”

Consumers Demographic, social, technological & lifestyle changes

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‘I CAN GO ANYWHERE’ On the-Go! Mobility, Portability More travel, more eating out, snacking

Consumers Demographic, social, technological & lifestyle changes

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Consumers

Longer working hours, More working mothers/women Richer Rich, Poorer Poor High quality time poor, Info rich multi-media Do it for me, Cook it for me

TIME POOR

Demographic, social, technological & lifestyle changes

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‘ GENERATION BLUR ’ ‘ GENERATION BLUR ’ Aging, Healthier but some Fatter Baby Boomers, Generations X, Y, Z and now W Family structure changing Single household

Consumers Demographic, social, technological & lifestyle changes

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Consumer Trends Convenience

• Lifestyle oriented

• Simple easy to understand convenience

• Convey convenience

• Extreme portability

• One handed eating & drinking

• Easy opening, Resealable

• Single serve, portion serve

• Fridge packs

EasyShape • Easy disposal

• Lightweight

• Both small & large formats – multi packs

Stand Up Pouch

202 SuperEndTM

Opening for attached straw

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Heat & Serve

Eat and No Mess Disposal

Breakfast, Lunch, Dinner “Cook it for me”

Consumer Trends

VentValve -BirdsEye Fish

Easy Dinners Convenience

Pre-Packaged Meal Solutions

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Consumer Trends

• Easy open • Easy re-close • No wastage • No spillage • Easy store

Convenience: Resealability

TapeTop Reclose CT Version + Hot Melt

EasyPackTM

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Consumer Trends

Snacking, grazing

Easy to eat On-the-go

• Breakfast Cereals/Drinks • Snacks

Travel Packs

• Tissues, Wipes

Extreme Portability

Flexcan TM

Liquid FlexcanTM

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Consumer Trends

Smaller Serving Size Indicator Portion Control

Portion

Tray & Lidding Tear Stick Portion Control

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Packaging Impact

• Glass associated with premium • Premium associated colours: metallic, gold, black, red • Sleeves • Event packaging • Interactive packaging • Embossing, shaping

Trends •Ethnic, Exotic • Novel, Fun • Indulgent Premium • Momentary rewards • Rewards for ‘good behaviour’ • Want higher quality F&B • Trading Up

Image Source: GNPD & Amcor

Consumer Trends Premium Branding: Pleasure/Indulgence

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Consumer Trends Health & Wellbeing: Good for you

Image Source: Mintel GNPD

Trends

• Health & nutrition awareness • Body image emphasis • Organics & Fresh • Nutritional labelling • Functional & fortified F&B

Packaging Impact • Convey product goodness • Maintain product goodness • Inform & educate nutrition • Visible content/product • Wholesome image presentation • Enviro Friendly/ Recyclable

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Consumer Trends

Freshness Indicator Shelf-life extension Pre-sliced ready to eat F&V , Fresh veg snacks On the Go

Health & Wellbeing: Fresh, Organic

Ripesense (Smart label)

I’ll tell you quality, you can choose

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Consumer Trends Food Safety

Pre-packed F&V

• Concerns on food safety & environment

• Product visibility

• Tamper Evidence

• Evidence of Contaminants (eg allergens)

• Evidence of Shelf-life Quality

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Innovation

New packaging material science

• High barrier films

• Active component

• Intelligent component

• Nanotechnology

• Digital printing

• Adaptable to changes in pack content and environment

• Extend shelf life

Ink development

Technology Push

202 SuperEnd™

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Consumer Trends Technology Push

Unique Serial Coding

Unique serial coding inserted into packaging promotions

Product animations giving character to products

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Innovation

An efficient way to bring NPD to market

with reduced risk and speed

Market Pull

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Innovation “Don’t innovate for the future” – Peter Drucker

• “Unless there is an immediate application in the present, innovation is like the drawings in Leonardo da Vinci’s notebooks - a ‘brilliant idea’”

• “In pharmaceutical research there are long lead times but no company would dream of starting a research project for something which does not, if successful, have an immediate application as a drug for health care needs that already exist.”

“Innovation is conceptual and perceptual” • “Look, Ask and Listen”

• “Look at trends and observe people on where and how to satisfy an opportunity”

• “Look at your customers and their consumers and see what their expectations, values and needs are

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2 Shelf Ready

Amcor 1 2 3 Innovation

3 Display Ready

1 Primary Pack

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Strategy & Innovation in Packaging . . . Conclusion • Check your Market Pulse & Trend best poised to Leverage

• Consumer Trends & Retailer Initiative Intimacies

• Speed to Market Innovation Process • (Fast) Speed to market Vs (Shorter) Prdt/Mkt Life Cycle

• Integrate packaging solution & fit for SC purpose

• Ideas: Look, Ask & Listen • Where and how product is used/consumed • Include end-to end cost effective supply chain

robustness

• Keep it simple

Thank You

Poh Len Pek GM Strategic Marketing