This presentation was given at Pack InnoTech Conference (22-23 May), part of ThaiFex, organised by Koelnmesse

1. Packaging Innovation and
Challenges for Business Success
Mayuree Paklamjeak
23 May 13
Pack Innotech Conference , 22-23 May 2013

2. Agenda
• Realizing importance of packaging
innovation for business success
• Understanding packaging requirements for
efficiency
• Inspecting packaging that leads to
competitiveness
• Identifying packaging challenges for brand
owners and suppliers when AEC comes into
effect

3. Realizing importance of
packaging innovation
for business success

4. Research vs Innovation
Research is the transformation of money to knowledge
Innovation is the transformation of knowledge to money
Ref : Bayer, Germany

5. Criteria of Packaging Innovation
Consumers
Preference
Technology
Readiness
Business
Need
• Some innovation need Research
to get technology readiness,
some do not
• Some innovation are simple ,
some are not and need
Engineering & Manufacturing
before commercialization
Innovation is an important index of global competiveness

6. Packaging Innovation Objectives
• For new product launch to gain market share / profit
• For improvement of current products to extend product
life cycle
- better packaging quality & consistency
- adding functionality value
- brand enhancement/ differentiation
- promote sales
- retailer preference
- total competitive cost
- higher supply chain & logistics efficiency
- reduce environment impact/sustainability
- etc

7. Consumer Product Life Cycle
Packaging innovation is needed to extend product life and
meet business result (profit).
Why Packaging Innovation Is Needed?

8. Consumer Product Life Cycle
Phase Characteristics Packaging strategy
New product
introduction
(launch)
high budget, low sales, low
market share, no or less
competitors
- create product image and attack
consumer attention by packaging
differentiation , segmentation, benefits
communication
Growth higher sales, higher market
share ,more competitors,
higher profit
- more pack sizes and types to cover
more segments and sales channels
- create special pack for marketing event
Saturation sales stable, market share
stable, serious competition
- promotion pack, refresh by changing
packaging design or adding value
Decline sales drop significantly,
market share loss
- reduce packaging cost, cut all un-
necessary elements
Die little sales and market share - too late to use any packaging strategy

9. Packaging design to support marketing events
Growth Phase
Speed
Quality
Premium

10. Growth Phase
New pack size & type to cover new segment
Tablet Dispenser

11. Saturation Phase
Refresh by adding value (easily open and reclose-able)
NEW RESEALABLE PACK

12. Understanding packaging
requirements for efficiency

13. Packaging Design Outcome : Packaging Specification
Production
and Quality
Purchasing
and Finance
Warehouse
and Logistics
Rules &
Regulation
Product
Marketing
and Sales
Packaging
Specification
SuppliersBrand Owner

14. Good Packaging Specification
Shall meet all relevant needs “Efficiency”
 Product quality and shelf-life
 Packing /filling/capping/labeling efficiency
 Distribution efficiency (warehousing included)
 Retailers preference
 Consumers preference
 Less environment impacts
 Acceptable cost (profit)

15. Efficiency requires many steps,
many testing and time
1. Information collection & packaging requirements summary
2. Multi designs , selection, prototype(s) making
3. Prototype test & validation
4. Design adjustment, prototype , making, retesting
5. Structure and graphic designs finalize
6. Cost and demand finalize
7. Production tooling (die-cu, moulds, printing
plates/cylinders) and test
8. Complete packaging specification and quality criteria

16. Packaging Requirement for Efficiency
Efficiency Packaging Requirements Testing Requirement
Product quality &
shelf-life
Packing/filling
efficiency
Distribution
efficiency
Retailer
preference
Consumer
preference
Safe when direct contact with
food, protection against
moisture, gas, oil, etc
Proper shape & dimension
and performance
Proper transport packaging
design & property
Maximize space utilization ,
stable on-shelf, easy shelf
replenishment
Outstanding on-shelf, clear
communication, reasons to
believe, convenience
Aging test, migration test ,
solvent retention, WVTR, OTR,
etc.
Physical test and machine test
Simulation shipping test,
rub resistance
Dimension and stability check.
SRP design test
Consumer test, shelf test,
convenience function test

17. Packing / Filling Efficiency
High output
Minimize waste
Minimize finished goods defect

18. • Easy loading/unloading
• Maximize space utilization
• Minimize goods damage
Losses in Distribution
• Handling & storage 45 %
• Accident 19 %
• Water damage 17 %
• Theft and pilferage 19 %
Distribution Efficiency

19. Reduce Distribution Damage

20. Good SRP design
needs complete
distribution information
to maximize space
Distribution Efficiency

21. Inspecting packaging that
leads to competitiveness

22. Packaging for Competitiveness
Best on Shelf
• Understand consumer needs
• Link needs with key packaging attributes which convince
consumers to choose our brands
• Ensure shoppers choose our brands in the store by
outstanding or differentiation design when displayed on-shelf
Packaging Attributes : packaging elements which
consumers can see and perceive
• Packaging shape, color, picture, aesthetics
• Brand name, logo , pictures, highlight of product benefit
• Brand sense
• Brand endorser

23. Consumer Needs
- Senior citizen (Aging population)
- Target consumers

24. % senior citizen (> 65 years old) of total population
Country 2010 2020
Japan 23 28
USA 13 16
India 4 8
China 8 12
Thailand 10 (12% in 2012) 14 (20% in 2042)
Senior Citizens
Aging Society

25. Expiry date is hard to
read
The packaging is
hard to open
Small, fuzzy text
Too less information
the content
What annoys you the most regarding product packaging?
(Germany)
Several answers are possible, N= 354

26. Rising Health & Safety Awareness

27. Rising Health & Safety Awareness
Tamper evident cap
Safety button
Tamper evident shrink sleeve

28. Rising Health & Safety Awareness
Clear Benefit Communication

29. Guideline Daily Amounts (GDA) Label
on front panel
Amount of key concerned component (Energy, Fat ,
Sugar, Salt, Sodium ) per package in % of maximum
consumption allowed per day
>>> Nutritional Facts on back/side panel
Nutritional information per one serving
Rising Health & Safety Awareness
Nutrition Communication

30. Guideline Daily Amounts (GDA)
Widely used due to easily understood by consumers

31. Jasmine rice
5 kg in big flat bag (210-230 Baht)
Cereal mixed Ca & Fe fortified
450 g (31 Baht) 500 g (48 Baht)
Healthy Food Awareness Rice Innovation
Stand up zipper pouch

32. Butterfly Pea Rice with benefit information
1 year shelf life
O2 Absorber
ข้าวสมุนไพรดอกอัญชัน
Healthy Food Rice Innovation
Vacuum pouch with O2 absorber

33. Canola Oil Rice bran oil Palm oil
Healthy Food High nutrition edible Oil
Canola, Olive, Rice Bran Oil
Premium design of
clear PET bottle
Olive oil

34. Convenience
& Fun

35. Very easy to
open
Easy tear and
straight cut
Tab

36. UD Easy to
open

37. Safety and Convenience
Safety and injury
prevention
Instant noodle cup with 2 layers lid
Hot water in
Hot water out
UD

38. Noodle cup
Paper coated with PE
Corrugated paper for
insulating effect
Coated paper for
good printing
Triple layers paper cup for
excellent insulating effect
The cup automatically equipped
with an insulating function on its
side soon after pouring hot water
into the cup, easy to hold and
difficult to slip from hands
Safety and
injury
prevention
UD

39. 2012 Packaging Idea Award, Japan
More Convenience
•The cap and the PET bottle stay together even after
the water bottle has been opened
• Consumer can move more freely without worry about
losing the cap
• The cap has a common shape and can be used in an
existing filling line.

40. Non pigmented HDPE bottle with bag
inside , bag made of high flexible thin film,.
After squeeze to pour, the bottle easily
back to original shape
Cap has 2 pieces valve for
preventing product flow back
The hole at bottle is for releasing
the air between bottle and bag ,
helps maintain bottle shape and
enable to adjust product poured
hole
-Table top bottle for soy sauce (200 ml)Convenience
Keep soy sauce fresh for 90 days after opened

41. 2 bags sealed together on top
- inside bag is clear film , low
rigidity, high barrier
- outside is printed film, high rigidity 1/3 of resin consumption vs PET bottle
for stand up, low barrier
- Soy sauce in stand up pouch (500 ml)
Opening area is very thin film for easier
tear. When stop pouring, films will be
stick together ,protect outside air flow
in. This spout design can prevents
reflex of O2 protect against oxidation
and deterioration
Convenience
Keep soy sauce fresh for 90 days after opened

42. Convenience
Cap-n-box : FDA approval board coated with
PET on both sides,, tight seal , reclose-able
Supplied by Continental Packaging(Thailand)

43. Frozen Vegetable in Microwavable Pouch
3 methods of heat
- in microwave oven
- hot water tap
- in boiling water
When heated in microwave oven
Center seal open to release hot air from the pouch

44. 250 ml 500 ml
Aseptic Carton
Convenience and Longer Shelf-life

45. My Own Made Starbucks Coffee

46. Small Household
Single Serve Packaging
Standard size 200 g &100 g
Single serve size 20 g

47. Convenience : Food Take Away Packaging
Take-away meals for city life people

48. On-the-Go
Beverage bottle for sport men
Sandwich box for drivers

49. Outstanding or differentiation design
when displayed on-shelf

50. Consumer Behavior
Consumers have become
 More complex
 More demanding
 More educated
 More willing to think twice or even
3 times before making a purchase
Packaging is the product
Printing makes the product
Printed pack represents brand
70 % of product purchased are unplanned and shoppers
made buy decision in the store
Ready Meal Frozen Food
 Big segment and high growth
 Vertical freezers more popular
 Flexible and rigid plastic packaging biggest consumption

51. Differentiation by Unique Shape , Material
and Good Graphic

52. Brand Enhancement
by good graphic and high quality of decoration
Normal segment
Premium segment

53. Continental Packaging
(all designs patented )
Differentiation-Fancy Box
Selling price
380 Baht

54. Outstanding On-Shelf
by shape, form, graphic, printing

55. Brand Endorser
Consumer can see, perceive and remember

56. Identifying packaging challenges
for brand owners and suppliers
when AEC comes into effect

57. AEC in 2015
One Vision, One Identity, One Community
วิสัยทัศน์เดียว อัตลักษณ์เดียว ประชาคมเดียว
Big market size of 600 million people of 10 countries

58. ASEAN Brand Owners & Suppliers
• Opportunity
- Better economic
- Higher GDP/ person
- Bigger market
- More collaboration
- More harmonized product standard

59. AEC: Opportunity for ASEAN Economic Growth
2015 Estimate
EU China ASEAN ASEAN
in 2012
GDP
billion USD 18,783 10,581 3,126 2,248
Population
million 504 1,375 645 590
GDP /Capita
USD/head 37,236 7,694 4,844 3,810
Packaging industry is approx 0.7 % of GDP = 0.7 billion USD in 2012
Ref : World Bank

60. Challenges for Brand Owners & Suppliers
Stronger competition on cost and quality
• High competition especially mass consumer
products
• Most consumers make buy decision based on
price, rather than quality
• Skilled specific professional will move around,
how to keep them in our organization?

61. Packaging Challenges for Brand Owners & Suppliers
• Know your organization
- Do SWOT - capability, technology, people, etc
- Identify your strength or uniqueness  keep it
- Improve your weakness  urgently
• Know your major competitors
- Strength & weakness
- Benchmark , how to compete them
• Know your cost structure in your supply chain and logistics
- Cost structure elements of your products (+packaging)
- Identify causes of waste in supply chain & logistics  improve
- Partnership with your raw materials & machines suppliers
• Know your price structure (quoted by supplier)
- Understand price structure of each packaging item ordered
- Work with them on how to reduce price without reducing quality

62. Packaging Challenges for Brand Owners
• Know your target market & consumers
- Understand target consumers behavior , varied by culture,
religion, life-style, education, etc
- Identify consumer needs & preferences
- Design proper packaging to serve their needs & preferences
- Make it easy for consumer to know what „s benefits of that packaging
• Know your target retailers
- Understand their preferences
- Design proper packaging to serve their preferences
- Partner and support them e.g. shelf space management , special
events

63. Packaging Challenges for Suppliers
• Know your key customers (brand owners)
- Each has different requirements & demand, understand them
- Keep major customers, fully support them
- Seek new customers for business expansion
- Networking or joint investment with other suppliers locally or in
the region to serve specific brand owners with competitive pricing

64. How to Turn Packaging Challenges to Success
• Packaging innovation is the solution (knowledge money)
• Innovation resources : people, equipment and budget
• Priority of innovation based on business need, target
consumer/customer preferences and technology readiness
• Innovation areas focused
- differentiate from competitor  uniqueness
- value added for consumers
- green packaging (hot trend)
- competitive overall cost
- consistent quality , minimize rejection
• Collaboration among value chain parties
for updated information and technology transfer
Speed to market
Acceptable selling price

65. Success of Packaging Innovation Needs
Value Chain Collaboration
Material Suppliers
Packaging
Suppliers Brand Owners
Additives and Ink
Suppliers
Machine Suppliers
Supporting Organization

66. For the trade
Packaging represents
Space saving
Shelf appearance
Reduced damages
For the consumer
Packaging represents
Safety
Convenience
Comfort
For the business
Packaging represents
Profits
Survival
Future of Sustainable Packaging for
Consumer Products
END