Retail trends & priorities. What does this mean for packaging?

Retail trends & priorities What does this mean for packaging? 03 | 12 | 15 Background ~20 yrs in retail Joined ASDA in 2007 as first Head of Corpora...
Author: Maud McCormick
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Retail trends & priorities What does this mean for packaging? 03 | 12 | 15

Background ~20 yrs in retail Joined ASDA in 2007 as first Head of Corporate Sustainability ➔ ➔ ➔ ➔

Created and ran Sustainability Department Wrote and managed Asda’s strategy and policies Responsible for external engagement – governments, NGOs, media Responsible for internal alignment – Board to stores across 180,000+

Regularly co-managed by Walmart ➔ ➔ ➔ ➔

Created and co-directed the Global NGO Management Network Wrote policy and delivered global sustainable palm oil procurement Subject matter lead on timber & wood fibre sustainability Embedded into US Team on regular basis

Tesco 10 yrs - last position Head of Regional Corporate Affairs ➔ Led Tesco’s local engagement across a third of the UK ➔ Responsible for all local stakeholders – MPs, Councils, other traders ➔ Media spokesman on local issues

I set up ETANTE ETANTE set up in June 2014 with clear aims & principles ➔ ➔ ➔ ➔

Deliver value through sustainability Unlock competitive advantage Mitigate future risks to operating model World class communications & engagement

➔ Unique position having ‘been there and done it’ in-house ➔ Supports FMCG brands, retail, food service, government, academia, finance & certification

Member of PEFC Council Board Member since 2011 – now on 2nd appointment Fill the retailer seat on the Board Help to advise & support around ➔ ➔ ➔ ➔

New strategy development & direction of travel Engagement with corporates Branding & identity Fund raising

Inside the mind of retail

The sector & current challenges

Key themes today Put you inside the mind of major retailers

➔ What is the market like? Who is winning? ➔ Where is their strategic focus today and next 5 years? ➔ What are their sustainability plans?

UK consumer behaviours & expectations ➔ What are they demanding from their shops? ➔ How much do they care about green issues ➔ Are they demanding green products?

New product development & packaging trends ➔ What is the current focus of activity? ➔ What kinds of packaging trends are emerging? ➔ How can PEFC gain advantage?

Retail is changing & fast New marketplace • ALDI larger than Waitrose • Discounters = 10% • Discounters growing fastest • Pound shops expansion • C-stores now ‘destination’ shops

New Challengers • Collection when it suits you • Amazon Fresh & Google Express • New concept stores

New markets • Emerging markets needs • Westernised diets growing • £45m gov funds to encourage exports • More lucrative than UK / EU?

New ways to shop • Omni-channel growth • Smaller baskets prevalent • Top up shops normalised • Click & collect common

More power to producers • Grocery Code Adjudicator • Consolidation = more power • New contractual terms likely • Greater competition for security of supply

New Product Development • War on sugar • C-stores growth in fresh • Use of certification by Discounters • On-line packaging needs

Sustainable development case is made

In UK by 2080

By 20203 need

Will hit profits

4° higher summer temps

50% more food & energy

Higher agri-chemical prices

1/4 less rainfall

30% more fresh water

Water reflect real cost

1 metre higher sea level

~8.3 billion people

Soil health! Costly mitigation

UK retailer environmental goals Key Goals • Reduce direct emissions by 50% by 2020 • 75% reduction in fleet emissions by 2020 • Reduce water usage • Support supply chain to reduce emissions • ZWTL & prioritise food waste reduction

Key Goals • Reduce direct emissions by 10% by 2015 • Reduce fridge leaks to 90% today

Sustainability is a rising topic • ~3% in 2011 rank ‘a lot’ • >11% today rank ‘a lot’ • >80% talk about being green

Provenance ranks highly • 77% question food sources & sustainability

Sustainability drives buying • >70% make this claim (all things price & quality being equal)

Food waste • >90% waste food and so money • ~85% want retailer’s help

US research backs this up Natural Marketing Institute (NMI) has a 13 yr study that in 2015 included 3,000 US adults Their segmentation showed 22% 21% 24% 18% 15%

LOHAS Naturalites Drifters Conventionals Unconcerned

Strongly care Care about buying green products Newer to green but see benefits Cost is king! No interest in eco or society

1. Eco friendly product makes me think its higher quality 2. More likely to try products from companies who care 3. 54% will no sacrifice anything in buying eco: • 71% will not sacrifice quality • 63% will not sacrifice price • 46% will not sacrifice convenience

NPD & Packaging

What are the trends?

External factors are starting to bite WRAP in the UK are thought leaders on sustainability affecting products:

Types of NPD underway Emerging new work stream referred to as Sustainable NPD Developing to benefit from the higher consumer demands 5 Common themes • • • • •

More energy efficient cooking methods Packaging that’s fit for purpose Greater shelf life & freezability Seasonally grown with less waste Lower GHG production methods

How can wood based fibres support this innovation?

Packaging opportunities Optimisation • Less is more! Thicker weight just means more waste • Ease of recyclability – paper simpler than plastics

Enhanced profitability • Shelf ready packaging • Cube optimisation • Temperature indicators on tertiary packs

Consumer benefits • Embedding of freshness / date code indicators • Re-sealable packs & longer life, e.g. TetraPak • Natural & chemical free

Thank you for your time

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