Consumers are increasingly interested in smaller portion sizes of snacks and sodas, as well as affordable combo packs. These changes in size can have an impact from production to recycling. While CPG's packaging strategy is much more complex than Dr. Seuss's book, the general principles are correct. As more companies adjust or increase package sizes to meet changing consumer preferences, there are new impacts from production to recycling.
Jonathan Quinn, vice president of marketing and sustainability at Accredo Packaging, said: "They're going to have to revamp their production lines and their equipment. No matter which direction you go, there's a waterfall effect."
But consumer goods companies don't shy away from changing package design and size, a practice known as price package architecture. This year, Coca-Cola launched its latest packaging innovation in the United States, the Sliim can, which has the same 12-ounce capacity as the standard can, but is taller and slimmer in shape. Classic Coca-Cola, Diet Coke, Fanta and other beverages are sold in these cans across the country.
A Coca-Cola spokesperson said in an email that this is part of the soft drink giant's strategy to meet "rapidly changing consumer preferences." "Many consumers are interested in smaller portion sizes, while others are trying to stock up on larger multi-piece packages," the spokesperson said. We will continue to evolve to meet people's preferences."
01 Reduce the size
With the introduction of different options for consumer products, packaging design will not change dramatically. Food and beverage manufacturers want their brands to be recognizable on shelves, regardless of package size. But experts say that, in general, individually packaged goods tend to be less sustainable from a scrap perspective.
Small, high-volume, low-cost packages often require mixed material packaging, Quinn said. The manufacturing equipment is designed to run fast, producing large quantities of supplies using mixed material packaging, making single-material packaging uncommon in salty snacks. "Whether it's a chip bag or a goldfish... None of these packages have the current capabilities of a single material, "Quinn said.
Mixed materials are often of limited value to recyclers, so these snack wrappers often end up discarded. With rising inflation, smaller package sizes are becoming more popular. Some manufacturers resort to deflationary inflation, while others raise prices. But FMCG found a gap in the market when it raised prices, and there were no longer low-priced products to meet the needs of cash-strapped consumers.
Consumer goods companies then face a key question, says Jane Allen, a partner at Simon-Kucher, a consultancy: "How do you make new, smaller packages to complement some of the trial or open price packages?"
So some companies are moving to fill the gap. Hershey introduced Dot's pretzels in 9.5-ounce size. The company describes it as an entry-level price point. Dirk van der Put, CEO of Mondelez, which makes Oreo and Triscuit products, said at an investor conference last month that Mondelez is "innovating in small packages." Howard Friedman, CEO of chipmaker Utz Brands, said on an earnings call in February that he was "highly focused on our price pack architecture strategy, evaluating smaller package sizes at key pricing thresholds."
Cost is just one of the trends driving consumers to opt for smaller packages. Vinky Ramesh, vice president and head of business consulting for consumer and service industries at EPAM Continuum, said Generation Z (born between 1997 and 2012) prioritizes healthy food and beverages. The smaller sizes cater to this generation's desire for moderation and portion control, such as smaller cans of soda or mini packs of snacks, Ramesh said.
Van der Put said that more than 55 percent of Mondelez's snack revenue comes from "portion size snacks." This is either the size of the individual package or the package with the serving size recommendations printed on the package.
CPG also uses small packages to introduce their brand to potential new buyers. Taja Dockendorf, founder and creative director of branding agency Pulp+Wire, said that if a consumer hasn't tried a product before, "the one-time, grab-and-go approach makes perfect sense." For example, Conagra Brands, which makes Slim Jim, has expanded the single-serving packaging of its meat snacks. "They put it at the checkout so it can drive impulse purchases," Ramesh said.
02 Value for money
Value-conscious consumers, on the other hand, continue to seek out as many products as possible. Instead of choosing low-priced individual items, they are choosing the lowest price per ounce for a family pack or multi-pack. "Everyone is trying to find the sweet spot," Mr. Dockendorf said. "They want to be able to offer consumers multiple sizes to suit their needs."
These FMCG products, which produce smaller package sizes, are also expanding the scale of composite packages. Conagra introduced the Slim Jim in 14, 26, and 46 packs. Hershey's package sizes now include a 35-ounce family pack of Dot's, as well as a combination pack of popcorn. This multi-piece pack is popular at club stores like Costco and contains several bags of mini popcorn brands, including SkinnyPop and Pirate's Booty. "There are so many occasions for snacking that you need mini-packs," Ramesh said.
Increasing size may require more functional changes to packaging due to the need for an outer box or container, but it also provides opportunities to improve sustainability. For beverage packaging, Pepsi began switching from plastic rings to cardboard to hold the cans together, and some Coca-Cola bottlers also opted for paper packaging instead of plastic rings or shrink packaging. Another trend is that companies are increasingly using fibre-based packaging in their composite packages.
Household size has also benefited from changes in packaging design. While single-serving packs can only be used once, home packs require a resealing option. "A lot of brands are using corner pouches," says Dockendorf, pointing to products like granola, snacks and cookies. "We're seeing more resealability... To keep it fresh, easy and convenient."
Whether CPG expands, shrinks, or both, they must consider the entire design process. Introducing new SKUs may require upfront costs and equipment changes. If there is a wide variety of sizes, it may also reduce manufacturing efficiency. Quinn sometimes says that the Marketing Department makes the decisions and communication with the packaging team is an afterthought. "Then it's about finding ways to conjure up rabbits to make that happen," he said.
But Jane says the process is beginning to change. Manufacturers start to think about the key price they want to achieve in the market and then think about how to change the packaging to meet that price point. It creates what Jane calls a feedback loop between marketing, sales, supply chain and packaging. "It's a mindset shift to let me design the product and then I'll set the price, '" she said.
