Stergios Bititsios, packaging and consumer research leader at Cambridge Design Partnership explains why we need to get more thoughtful, earlier, when it comes to innovation in packaging and says the food and drink sector must learn lessons from other FMCG categories.
When it comes to packaging, we need to take a step back and think about how we approach innovation in the first place.
What problem are you trying to solve, and what benefits are you trying to deliver?
It’s about taking time to understand where the real opportunity lies, and this is the difficult part, and where the food and drink sector has sometimes struggled.
I hear the same story and see the same reaction from consumers. A lot of packaging in this sector is still hard to open, still not re-sealable, still not recyclable enough. Then you have the retailers…there is still a lot of work to be done in utilising more recyclable packaging. Where is the corporate social responsibility in all this?
Also, food and drink is a heavily commodotised sector and there is a lot of risk. The margins are very small and that’s why there’s sometimes not as much innovation in packaging as there is in other sectors. There’s very little price elasticity, and not much room to manouevre. So there’s only so much you can do.
A holistic approach
We have people coming to us and wanting us to help them create something because they’ve seen a trend, but they’re not necessarily thinking about what’s right for their customers, or how to grow their brands and their categories.
There has to be a holistic approach, which includes using a lot more consumer insight at the beginning, then having the right people to translate the research into design and through development.
The difficulties often start from the way in which organisations are structured. In some of the most complex, global organisations, joined up communication can be very challenging and there are often barriers to getting things done – procurement is one for example.
That’s not to say there aren’t people in those companies with vision and a desire to make a difference, but it’s hard to make it happen and they often get stuck in the bureaucracy.
I’m not saying it’s a problem without a solution though and, looking on the bright side, I think things are changing.
When food and drink clients come to us now they are more willing than ever before to sit down and listen and try to understand – and that’s a very positive step. Many of them have restructured their businesses now to have front-end innovation teams. And that in itself is proof that they understand there is a need to change.
However, they don’t necessarily have the knowledge to implement the right processes, which is where businesses like ours come in and can help.
What has sometimes happened in the past is that people go crazy about the latest trends and want to adopt something new in their business, then decisions are made in very subjective ways, without supporting evidence.
Ideas may be developed, then they undergo several iterations, and lots of financial resource is committed only to find later that they’ve been doing the wrong thing and there’s no room in the market for what they’re developing.
But, because they’ve already committed resource they have to find a way of pushing it. If they had invested earlier in really understanding the opportunity, then money and time could have been saved. What’s needed at the early stage is a thorough, solution -agnostic approach.
Knowing when to bring in your consumer insight tools is really important. If you develop lots of ideas, then bringing the consumer in to tell you if they like them, well, that’s a little bit too late. Probably 70 per cent of drinks businesses still work like that.
Household brands do it very well. But, take dishwashing tablets; there’s a lot of margin in those prices, so there’s more scope for packaging innovation.
Why other sectors are leading the way
Personal care is another sector where things do change and there is quite a lot of innovation in packaging. Take shampoo: there’s lots of development there all the time, whether it’s the opening and closing mechanics, the texture, the shape.
Dove changes it’s structural packaging on certain products about once every three years. And that frequency is incomprehensible to other sectors. It’s about knowing that they have to reward and retain their customers – and that you don’t necessarily have to change the formulation of the product to do that (which is a more expensive exercise than changing the packaging.)
And a brand like Dove wants to attract new people to the category and the brand. If you want to grow your customer base then you need you need to invest, and packaging is an obvious way to do that.
Lynx also changes the structure (the system and device rather than the design) of its packaging every 2 – 3 yrs and that’s because they understand that the whole experience of the brand is wrapped up in their packaging. And that’s a whole different mentality from what happens – all to often – in food.
Look, it’s unbelievable that we can still buy food in a can that doesn’t have a ring pull! But this is partly about the value that the consumer applies to the category. With personal care it is different as we’re all prepared to pay a bit more for something that makes us feel clean and beautiful. There is a lot more emotionality in that category than there is in food.
Where is the innovation in food and drink in packaging?
A few years ago pouches were the thing – we started seeing a lot. But very often pouches are just not practical.
Dealing with commodity products
Nestle is one example of a large company that does innovation extremely well. It is big for a reason – and it’s not based on luck. It’s partly because they know how to utilise rigorous consumer insight, market insight and strategy work at the front end of the innovation process.
This is a business that has been doing a great job with its packaging – you can see there’s a lot of thought and care that goes in to it. Because it’s a heavily commodotised category, you’re rarely going to see anything very ‘Wow’. But they’ve been working hard on improving coffee jars – not just the aesthetics but the usability, the open-ability – just making it easier for everyone. Those small innovations make a difference to the end user and allow Nestle to charge a premium.
Take Nespresso. How do you decide to create a single serve coffee machine that goes with a closed-loop system, together with unparalled customer service? Yes, it takes time (Nespresso had been in development for years before it launched, and it’s a continuing process). But, crucially there is method in coming up with that and that’s why it’s so successful. It’s about bringing together all your stakeholders – including the consumer, right at the beginning. That’s how you come up with new ideas that have longevity.
Nespresso has been disruptive, in a good way. Now everybody’s trying to copy it and it is very hard to do. Nespresso remains more expensive than the others, and can command that premium pricing because they are confident that they address particular needs and fill gaps – and they know they are good at it.
Why the emotional follows the functional
Functionality in packaging is hugely important, and that’s where we do a lot of our work. It’s hard to talk about brands in terms of emotional engagement when the basic functionality isn’t there.
But there is still lots that can be done, even in the very commodotised areas where there isn’t much margin to play with. Small incremental changes can make a difference. For example, we’re working on the lid of a pack for someone. Just the lid. It’s a heavily commodotised food product and category with very low margins, but still the company understands that it needs to stand out because of that.
For them, the way to do that is to work on the structure of the pack, not just the graphics. They haven’t got much margin, but because they are so focused on one small area, they can make it work, even within the inherent restraints that exist. They’ve asked: ‘How can we add value to the experience of interacting with this product, just by changing the lid a little bit?’ It’s a complex thing to do but there will be reward in the end.
In my view, every other company has to start thinking in that way if we are to start to see some real change.
Cambridge Design Partnership are currently recruiting for a Market & Design Insights Researcher. To find out more about the role – click here
If you are interested in the latest packaging roles in food and drink – please click here.
You can also sign up for job alerts and get them delivered direct to your inbox within 24 hours of them going live on our site.