SDI JUL09.qxd - Soft Drinks International

38 MARKET ANALYSIS
Soft Drinks International – JULY 2009
Packaging
innovation
in a weakening economy
Contrary to
economic
instincts,
innovation may
offer brand
owners much
needed product
differentiation,
writes
Dr Benjamin
Punchard.
In a weakening economy consumption levels
are seeing growth rates slashed and in some
cases consumption dropping overall as consumers
turn off high cost soft drinks. It is at
times like these that packaging's abilities to communicate
with consumers and sell the product
come into their own – now is not the time for
products to be hiding away! The need to innovate
is highest in those high margin categories
that are now weakening, such as energy drinks,
or in economy categories where consumers can
save by switching to tap water.
Despite this drive, many brand owners are
choosing not to innovate, preferring to wait for the
crisis to ease and taking the short term benefit of a
reduction in development costs. Where budget is
still being spent there is a clearer drive towards
product innovation and marketing, squeezing yet
further the opportunities for novel beverage packaging
to hit the shelves. Euromonitor predicts that
it is those brands that continue to develop their
packaging in tune with consumers changing
lifestyles and priorities that will best ride out
these turbulent times.
Liquid cartons offering an
economic option
One pack type that has benefited from the recent
squeeze on the consumer wallet is liquid cartons,
in 2008 achieving over 5% growth globally on
2007 retail unit volumes, rising to 10% in dynamic
Latin America. Consumers have long been
aware of the health benefits of fruit and vegetable
juice, a category driving much of the growth. Now
that price has become a significant factor consumers
are looking again at the benefits of ambient
juices in liquid cartons over fresh, and with
this we are seeing uptake of brick liquid cartons
Stand-up Pouch Forecast Regional Performance – 2008-2013
Source: Euromonitor
grow. Within the chiller cabinet the cost conscious
are spotting the price differential between
PET bottles and the gable top liquid carton and
making the switch. Though PET bottles have the
benefit of a reclosable top, use of liquid carton closures
on retail packs has reached 25%, adding
ease of opening and resealability to the benefits of
gable top and brick liquid cartons alike.
Pouches favoured for new launches
Whilst still a relatively underused pack type,
accounting for just under 1% of unit retail soft
drinks packaging in 2008, pouches continue to
post strong growth. A lightweight package, often
with a resealable closure, that offers a good print
surface and stands out on shelf, it is no surprise
that new launches in many sectors are utilising
this format. It is within juices that pouches have
particularly come into their own as they are perceived
as 'fresh' by consumers looking to fruit
juices for a healthy beverage but also combining
this with extended or long shelf life for convenience.
Over the past year we have seen pouches
used for the brand extension Perricone Sports
Juices in the US, the launch of new brand Yomy
Yomy juice in South Korea, similarly for Fruite in
France, and the extension of the Vimto brand into
an on-the-go pouch format in the UK.
Glass suffers as consumers 'cocoon'
Cocooning – where consumers switch from going
out to spending more time and entertaining at
home has many drivers; concerns about terrorist
activity, public smoking bans in many countries
and states, and, increasingly in the current economic
climate, the high cost of entertaining out.
With beverage sales seeing a switch from foodservice
to retail, glass bottles are suffering as a result.
Glass has managed to leverage the public perception
of it as a premium pack type for beverages to
retain a strong position in foodservice. Higher
price points mean that consumers have higher
expectations of quality when drinking out.
However with the growth in cocooning and enter