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Groomed for global expansion

Changing demographic structures such as more single-person households, longer life expectancies, rising environmental awareness and growing urban populations are set to shape the next wave of innovations in health and beauty packaging. Canadean gives Packaging Today its insight.

Pressure on pricing is driving demand for cost savings in packaging
Packaging is a key area for health & beauty marketers to target reducing costs, as pressure on health & beauty retail pricing, driven by the poorer economic circumstances and restricted consumer spending generally, is creating an intensification of competition in the marketplace.

A Canadean survey of key packaging industry experts found that 91% of respondents ranked product price as an important factor in influencing consumer choice when buying health & beauty products, with 55% citing this as very important. This finding comes as no surprise given the recessionary state of the economy in recent years.

In spite of this, respondents thought that attractive and innovative packaging was even more critical to success, with 96% of respondents considering it an important factor in influencing consumer choice.

However, whereas consumers might previously have paid a premium for innovative new packs, the expectation now is that this must now be achieved with little or no on-cost. So it is this, perhaps more than anything else, which is putting pressure upon and driving the search in health & beauty packaging for new, lighter, and higher performance materials.

Packaging is being designed around "Renew, Reuse, Recycle"
Linked to both cost reduction and the increasing consumer interest in sustainability, much of the recent focus of packaging innovation over the last five years has been aimed at the more efficient use of scarce resources through developments in material specifications and the reduction of pack weights.

When considering the disposable nature of pack materials, it comes as no surprise that sustainability and the 3 ‘R’s — Renew, Reuse, Recycle — are frequently found alongside descriptions of packaging innovation, and there are many examples of new pack materials that either use renewable resources, such as plant materials, are biodegradable, or that can be recycled.

Consumer Convenience & Functionality
In spite of the strong, unrelenting downward pressure on product and hence packaging pricing over the last five years, the need for greater consumer convenience and functionality continues to drive packaging research and development. The result of this is a plethora of new packaging materials, container and closure shapes, sizes and designs aimed at easier handling, opening/closing, and dispensing.

This is not a new but a long term underlying trend, itself driven by core demographic and social changes such as aging populations, urbanisation, and more ‘on-the-go’ consumption. The main difference in the last few years of more difficult economic conditions is that whilst previously, convenience and functionality were perhaps the primary drivers of packaging innovation, cost and sustainability are now almost as important. In practice this means increased convenience and functionality continue to be primary drivers of packaging change, this now more often has to be achieved with little or no on-cost, putting enormous technical and commercial pressures on packaging development.

Smaller households = smaller pack sizes
Today, more people than ever before live alone. This is true of older consumers and also many young adults, who continue in education for longer, and choose to marry and settle down later in life. According to Canadean Intelligence’s latest report, the increasing number of smaller and single-person households worldwide will have direct consequences for product pack sizes.

This group of independent individuals are looking for ‘on-the-go’ products and flexible packaging. The need for smaller and lighter packs comes in many shapes and sizes, from credit card-shaped sachets that fit perfectly in the pocket of a pair of jeans, through to the innovative recloseable combination packs, such as those containing two treatments in one.

Research reveals that flexible packaging already owns the majority of the market, with a volume share of 58% in 2012. The demand for flexible packaging has grown fast at a compound annual growth rate (CAGR) of 9% between 2007 and 2012. The trend towards on-the-go products, lightweight packs and greater flexibility in pack design suggests the use of flexpack and other lightweight plastics will continue to grow. Smaller pack sizes will, of course, further impact upon overall pack volumes because it follows that, as the average pack size falls, the number of packs used per kilogram/millilitre packed increases.

Anti-aging segment evolves as people live longer
The desire to look younger for longer and the anti-aging concept of beauty products has long been a major focus of the health and beauty industry. The report shows there has been an increased desire among more mature consumers to ‘look good for your age’.

The desire to look good is not just a social pressure; the research shows that many consumers believe the signs of aging, and related effects such as the appearance of fatigue, will have an impact on their opportunities in the workplace. This is a particularly poignant factor considering a number of mature economies are currently experiencing periods of high unemployment, plus the fact that retirement ages are being pushed ever further back.

Today, the anti-aging industry is shifting from a curative to a more preventative position, particularly in terms of skincare. A greater knowledge of the causes of aging, such as the damaging effects of the sun and a call for more natural product ingredients, have extended the concept into new categories.

Marketers in the non-BRIC regions are already adjusting to aging populations as a result of longer life expectancies and larger numbers of people entering retirement. Those in China and Russia are also beginning to adapt to changing demographic structures. In China, more than a fifth of the population is over 50 years old. The same goes for many European countries; for instance, roughly a third of the French and British populations are over 50. These changing demographic structures will increase the demand for health and beauty packaging up until 2017.

Top innovators: skincare and haircare
Canadean estimates that by 2017 the retail value of the global health and beauty packaging market will be $450 billion. This value will be spread over 200 billion primary pack types, 25 billion outer packs and almost 100 billion closures.
Packaging innovation in the health and beauty market will be driven by skincare and haircare. These two categories account for 40% of the market, and will continue to witness steady growth up until 2017.

Design comes before costs
Creating a visually attractive pack design continues to be important in health and beauty packaging. While tough economic times have rendered cost reduction a more prominent driver in other packaging markets, such as food and beverages, visually appealing pack design is still deemed to be more important than pure cost reduction in the health and beauty industry.

Booming markets: Asia and Latin America
The report recommends that marketers look to Asia and Latin America for new market opportunities. Due to an expanding population and growing numbers of affluent consumers, Asia was ranked as the world’s largest market for health and beauty products followed by Latin America.

People in these regions now have more money to spend on luxury items, and have been buying health and beauty products more frequently during the last five years. In particular, the demand for premium, high-end, good-quality products has skyrocketed and will continue to do so towards 2017.

Sustainability tops consumers’ wish lists
Eco-friendliness and sustainability continue to be important to many consumers, and the use of recycled plastics in packaging can massively improve a product’s sustainability profile. One company that has enjoyed success with its corporate social responsibility strategy is Marks & Spencer. The UK retailer’s ethical and environmental code of conduct has seen an increase the amount of packaging made from more sustainable raw materials such as recycled plastics. For example, in its Essential Extracts personal care range, Marks & Spencer used a 300ml PET bottle, a type of packaging that consists of 30% post-consumer recycled materials.

Using renewable materials is another method of improving the sustainability profile of a particular packaging design. Typically, this will include replacing polystyrene (PS) with polylactic acid (PLA) or using plant based materials. L’Occitane has worked with plastics packaging manufacturer Promens to launch a new bottle made from plant based plastics. These Bonne Mère bottles are recyclable and made from renewable plant-based plastic, using the raw material sugar cane.