Analysis: EasyFairs brand owner survey shows packaging well positioned for bright 2010

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It is hard to imagine there are many people who are not pleased to see the back of 2009. By any standards it was a tough year and the packaging industry was not immune from economic woes. But as the debate continues around when the upturn will come – or whether the UK is going through a double-dip recession – the importance of packaging in the marketing mix remains unquestioned as brands seek to develop new business in a challenging environment.

Despite continued concerns over credit and consumer confidence, brands will look to steal a march on their rivals during the coming year via new product launches and attempts to break into new geographic areas. The ‘Packaging 2010 Report’, produced by trade show organiser Easyfairs in conjunction with Packaging News, underlines that packaging is still seen as integral to new product development and as quick way to innovate. This is not greatly surprising due to the role it plays in helping products stand out on shelf. But it is heartening to see a majority of brands’ spending on packaging will remain constant or increase over the course of 2010 and, importantly, fewer people than 12 months ago forecast packaging-related expenditure will decrease.

Shoots of recovery?

More than 120 brand managers, packaging technologists, marketers and product development specialists from a range of sectors including food, retail, cosmetics and toiletries took part in an online survey in October. The results show a brighter picture than last year as fewer people suggested operations would contract in 2010 and four times as many predicted expansion.

The biggest change in the brands’ outlook relates to the environmental initiatives on the horizon, which have almost returned to levels of two years ago. This is perhaps indicative that green issues had been put on the back burner in times of financial crisis, but brands will be keen to promote the environmental credentials of their packaging as they launch new products. The survey participants believe there is still work to be done on their packaging’s environmental performance. But at least from the industry perspective the message that packaging does provide environmentally friendly solutions – at the right price – is getting across. Last year, two thirds said it was hard to find products that scored on both counts; the figure has now fallen to 40%.

Packaging’s potential

More companies are looking to adopt new packaging formats or technologies, or even using new packaging materials, this year. But the report shows that while the relationship between packaging suppliers and brand managers is improving, some are still frustrated that development in packaging technology is lagging behind their ambitions. Some 42% still feel that companies in the sector are not innovative, although fewer than last year. Packaging’s place in the marketing mix is secured by the board-level support it appears to have at leading brands. A majority of participants feel that their boards would describe packaging as being crucial to their success, although some admit it is seen a necessary evil. While more than half of brand managers feel new packaging design is expensive, it is increasingly seen as providing a good return on investment.

In the recession, brands are closely monitoring all costs but, it seems, cost cutting is slipping down the rankings as a driver for innovation. Standing out from the competition is, unsurprisingly, the most important factor behind new product development, particularly as brands look to take on supermarket own-labels which have become increasingly important players. While this is not new, it is clear those packaging companies that have genuinely innovative products will benefit from targeting brands on the lookout for new ideas. As for the recession itself, we will only know in 12 months’ time if 2010 proved to be a better year than 2009.

Easyfairs Packaging Innovations, Packtech, Ecopack and Contract Pack take place at the NEC in Birmingham on 24-25 February. A show guide will appear in the February issue of Packaging News.

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KEY FIGURES

24% expect to adopt a new packaging format in 2010 (9% in 2009)

25% would increase spending on packaging to tackle supermarket own-brands

42% say packaging firms are not innovative enough (50% in 2009)

60% say packaging is integral to product development

40% say it’s hard to find green packaging that is commercially viable

(66% in 2009)

More than 120 senior brand managers, packaging technologists and marketers took part in the survey. More than half work for brands with a turnover exceeding £20m and 16% for companies with less than £1m turnover. A quarter of participants work in the food sector.

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