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Top trends in the beverage industry

Canadean has analysed the impact of major trends on the beverage industry. Beverage Packaging Innovation looks at the top three trends by 2018 value and number of occasions, to give a clearer picture of where the largest opportunities lie for producers.

Canadean has analysed the impact of major trends on the beverage industry. Beverage Packaging Innovation looks at the top three trends by 2018 value and number of occasions, to give a clearer picture of where the largest opportunities lie for producers.

There are three top consumer trends leading the market at the moment, and packaging manufacturers must lean into these trends if they wish to succeed through the current economic climate. Following is a breakdown of these three keys factors for packaging players worldwide.

Indulgence
The most valuable trend by 2018 will be indulgence, which is forecast to be worth more than $390 billion by 2018, influencing over 700 million daily occasions and the consumption of more than 88 billion litres of drinks.
There are three subtrends within the indulgence trend:

 

  • Self-indulgence: irrespective of the array of need states customers might have, indulgence is ultimately the primary motivator when it comes to consumption, and they are unwilling to compromise on this, particularly in the long term. Consumers seek out indulgent products regularly for reward and escapism, especially in times of continued economic uncertainty. Premium products offered by FMCG categories are seen as genuinely affordable even when money is tight, with consumers reluctant to compromise on indulgence for health or convenience. This results in consumers seeking products that offer maximum indulgence, therefore trading up to even more premium offerings.
  • Uncompromised moments: despite attempts made by the FMCG industry to persuade them otherwise, consumers still tend to believe that the most indulgent products are also the unhealthiest – particularly in food and drink – and that any product with a ‘better for you’ positioning instantly means a compromise on the enjoyment. Consumers will, therefore, ignore guidance and advice around excessive consumption of certain ingredients, believing that if they lead a healthy lifestyle overall, they can justify the occasional treat. They will prioritise indulgence without paying attention to other needs, and seek out products that push the boundaries of excessiveness and indulgence.
  • Rewarding and treating: an ongoing sense of entitlement means that even during a recession, consumers will still make small nonessential purchases. This is particularly true as consumers feel increasingly time-scarce, stressed and fatigued. Many people will monitor their spending on big-ticket items as they juggle and struggle with everyday living costs, but still turn to small daily indulgences that they see as affordable. This behaviour is a coping mechanism for many consumers, who turn to more emotion-orientated products for small indulgences. These feelings of self-entitlement mean consumers will continue to make impulsive, nonessential purchases for reward and escapism.

According to Canadean’s research, the following actions should be observed in packaging development to realise the most value from the indulgence trend:

  • premium design
  • quality packaging materials
  • packaging that provides pleasant tactile and visual sensations
  • indulgence-related claims.

Changing lifestyles
The next most valuable trend will be changing lifestyles, worth $325 billion in 2018, influencing 750 million occasions and 103 billion litres of beverages.

There are three subtrends under the factor of changing lifestyles:

  • Delaying responsibilities: consumers are breaking traditional life patterns and age-related stereotypes to delay responsibilities until later in life. More people are spending longer in education and, combined with an adventurous and ambitious mindset, delaying settling down and getting married in favour of travelling, enjoying a hectic social life and climbing the career ladder. This is particularly true as rising costs and levels of debt prevent people from buying houses or starting a family. This means consumers are increasingly seeking out products to help facilitate their lives, and suit their compact and solo lifestyles, so product formulation and packaging need to be rethought.
  • A shifting household structure: the traditional nuclear family is in demise around the world, with the number of single people, single parents and cohabiting couples – with or without children – on the rise, while the number of married-with-children households is declining. Additionally, more couples and families are living in different households to each other. The implication for this is a greater demand for convenient products that help facilitate busy lifestyles, and cater to smaller families and living arrangements, such as products in smaller pack sizes.
  • Family-home adults: rising property prices mean it’s now more acceptable for adult children to stay in the parental home longer than in previous generations. At the same time, they are delaying taking on responsibilities in favour of staying in education longer. Rising divorce rates and higher numbers of single people mean there are fewer people with partners and, therefore, dual incomes, so adult children are either returning to the parental home or have never left. These consumers tend to have few responsibilities and favour convenient products so they can spend time doing more favorable activities, compared with the things they see as a chore.

For packaging that ensures the greatest targeting of the changing lifestyle trend, Canadean recommends:

  • convenient and on-the-go packaging structures and functions
  • easy-to-carry designs that allow products to be taken with consumers wherever they go
  • resealable packets so that items can be used as and when needed
  • smaller portions (or multipack options) so that consumers have the ideal amount of liquid to take with them.

Personal space and time
The final top trend is personal space and time, although there is a marginal difference in value between this and the previous changing lifestyle trend. Also worth $325 billion, this trend accounts for 760 million occasions each day and 102 billion litres of consumed goods.

Many people will monitor their spending on big-ticket items as they juggle and struggle with everyday living costs, but still turn to small daily indulgences that they see as affordable.

This trend is likewise supported by the shifting demographics affecting the changing lifestyle trend. In today’s hyper-connected world, where there are more people and fewer resources, consumers are working harder, later and longer. When they have breaks, they want to enhance their personal time to make the most of it and enjoy it.

There are four subtrends in this area:

 

  • Escapism: as a result of daily pressures, consumers are looking for regular moments of escapism where they can retreat, relax and recuperate from the stresses of everyday life. These moments of escapism can be short periods – such as a ten-minute break during the day – or longer, sustained periods during the day or night, where the consumer looks to shut themselves away from the pressures of life. The focus on relaxation and recuperation means that moments of escapism tend to be facilitated with small indulgences for reward and comfort, with some products seen as coping mechanisms. When it comes to these moments, consumers will again prioritise products that are positioned around indulgence and unwinding. With consumers feeling more rushed and pressured in life than ever, they will continue to seek out moments of escapism.
  • Cocooning: as consumers look for moments of escapism from everyday life, they view their home as a fortress in which they are able to shut themselves away to rest and recuperate. This trend is manifesting itself in two ways. First, consumers are looking to replicate more out-of-home activities inside their own homes. This includes socialising with friends and family at home instead of eating or drinking out, or adopting high-end personal care occasions at home instead of salons. Second, consumers are looking to cut themselves off from the outside world and temporarily hibernate – even designating rooms in the home to be special areas, such as "man-caves", for these occasions. This is driving demand for products that assist with at-home socialising and unwinding.
  • Nostalgia: in times of increased stress and pressure, consumers seek out moments of comfort and, in particular, brands and products that remind them of simpler times. The desire for nostalgia has intensified in recent years, as time-scarcity and daily stressors leave consumers feeling anxious and fatigued. Individuals therefore seek out products that remind them of the past to elicit feelings of comfort. This also leads consumers to shun new, experimental products in favour of retro, traditional and simpler products. As stressful feelings linger, so will the demand for nostalgic products, particularly if they combine indulgence and comfort.
  • Simplicity: consumers are suffering from a ‘paralysis of choice’ as they are exposed to wider arrays of products and marketing communication than ever before. They therefore want to declutter the overwhelming levels of information and choice they are exposed to in order to lead a simpler life. While consumers are becoming more demanding when it comes to meeting their needs, and are appreciating trends like globalisation and wide ranges of product availability, some are put off by too much complexity in the decision-making process. Too much choice can result in ‘choice paralysis’, while product information that is deemed cluttering can confuse consumers. These consumers want products that offer simplicity and shorten the decision-making process.

Suggestions for embracing the personal space and time trend in packaging development include:

  • highlighting taste on packaging labels – not health claims
  • using premium packaging to convey decadence
  • making packaging lightweight and on-the-go-friendly.