FMCG Brands Reimagining Design and Size

Likewise, people, the retail shelf is also judged by its outward appearance and plays a big role as the moment of an impression that can either persuade or dissuades the customer from buying. Packaging of a product holds many benefits like protecting the nature of the product, highlighting the right information, aesthetic value, durability and strength of the product, and many more. In this era of overcrowded shelves, customer expects more than product safety and durability. At one end where environmental concerns can never be neglected, providing the right packaging which fulfills consumer requirements and managing the cost for the organization is a big challenge too. 

As per the information by the Business Association of Stanford Entrepreneurial Students, the packaging is a crucial communication tool in marketing and FMCG packaging has gained huge importance in the last few years as compared to earlier. 

FMCG Packaging Market Growth report shared, “The FMCG Packaging market was valued at US$ 711.56 billion in 2019 and is expected to reach US$ 935.98 billion by 2025, growing at a CAGR of 4.6 percent over the forecast period 2020-2025.”

Small unit packs are acting as the punch in retail as concepts like ‘try before you buy’ are making industries to re-shape their size strategy. A thought to be explored is small or big, which packaging will bring benefits to brands/ industries. The future of the FMCG sector is very promising because it touches every aspect of human life, thus the concept ‘one size fits all’ doesn’t work in this category too. There are many ins and outs involved in deciding the right ‘packaging and its size’. 

Size Does Matter

The packaging is neither a container to deliver products nor a marketing tool for the industries these days. With the growth of social media and learned customer behavior, opportunities lie in ‘try new things’ with Gen-Z and millennials in the market. 

Dilen Gandhi, Sr. Director & Category Head - Foods, PepsiCo mentioned, “Each price point has distinct consumer and customer requirement - catering to a unique occasion as well as offering convenience”. 

Small packs are easy on consumer pockets with a high reach from rural markets to Tier II and III cities and many FMCG companies are trying to expand their reach for brand penetration through small packs/units. 

Ankur Pahwa, Partner at EY shared his views in one of the articles that “With some e-commerce players looking to expand to Tier-II-III cities by tying up with Kirana stores, the smaller packaging of FMCG products allows them to bundle several products on the supply side at the lower-ticket size, thus improving their margins and offsetting delivery costs. It’s a win-win for both consumers and brands.” 

Organizations are building this size strategy on the principle of ‘affording the small bites with quick consumption and demonstrating value for money’. 

What’s New?

It’s not that the FMCG industry is not enjoying the feator in any unforeseen danger in coming times, but where change is inevitable, the transformation has to begin today with a winning model generating value and building relationships. 

As per the report by IBEF.org, “The retail market in India is estimated to reach US$ 1.1 trillion by 2020 from US$ 840 billion in 2017, with modern trade expected to grow at 20 25 percent per annum, which is likely to boost the revenue of FMCG companies.” 

It’s time for the FMCG companies to proactively get ahead of the new habits of consumers that have developed after living through pandemic. Companies have to ensure the well-being of the environment as well as consumers, by turning more customers into happy shoppers. 

Unilever's decision to change their approach of ‘take-make-dispose’ to ‘refillable to reusable’ is going to be a game-changer. Consumer preferences are changing in terms of packaging, thus delivering a customized functional packaging that offers higher sophisticated quality is the future of packaging. 

As per the report by Ellen MacArthur Foundation, “By replacing only 20 percent of single-use plastic packaging can offer an opportunity of worth atleast $10 billion.” 

Thus, to create brand loyalty a convenient model and attractive packaging can help in increasing superior experience. During the last year, brands of Unilever like CIF- EcoRefill, Tram Refill (Love beauty and Planet), LOOP, Algramo have tested the consumer behavior and its acceptance w.r.t product packaging with refill business model. 

Size of Packaging is an Old Idea

Brands are now responsible for selling sustainability with packaging and FMCG industry should join hands with the government and citizens by unlocking new revenue and cost-saving streams with a refill business model. Products are already available in small/ single-use sachets by offering magnificent value pricing to a huge number of low-pay buyers — however creating huge environmental issues. It is time for FMCG companies to look into the model which can easily be adapted by the consumer in their lifestyles. 

U.K based start-up ‘DabbaDrop’ delivering food to Londoners in reusable lunchboxes is inspired by130-year-old Mumbai Dabbawala. Big and established brands are even generating valuable consumer insights through smart technologies and scaling the concept of reusability. 

As per the report by Energy and Sustainability, “Loop delivers items from Procter & Gamble, Unilever, PepsiCo, Nestlé, Clorox, and Coca-Cola, among others, to consumer homes in innovative, reusable packaging”. 

MIWA partnered with Nestle, Algramo with Unilever, and Nestle is delivering smartly tagged, desirable packaging. 

What Awaits in the Future?

Very soon with the strict extended producer responsibility program, businesses have to be more responsive to the producer rather than the marketer. 

It’s time to redefine packaging, Purav Desai, Recube Pvt Ltd. focusing on solving the single-use plastic packaging crisis mentioned in his story that, “The Government has mandated that FMCG companies should reduce their packaging and take care of its life cycle”. 

Thus, a size or design shift is expected in the coming times in the FMCG sector.