Click to edit...
How packaging can add to the non-alcoholic sector boom
The non-alcoholic drinks sector has always been very busy and competitive, with manufacturers trying to meet consumer needs on many levels. Packaging is a key element that can provide differentiation and added-value. Using research from GlobalData, Callum Tyndall takes a look at the influential trends in the sector and the packaging opportunities available.
According to GlobalData’s 2018 Q4 global consumer survey,
48% of global consumers are willing to pay more for better-quality hot drinks and 43% of them will do so for better-quality soft drinks.
As consumers, particularly the millennial generation, increasingly turn away from alcohol and the adult soft drinks sector rises in response, non-alcoholic drinks are in a strong position to grow their market size. Packaging has an important role to play in helping products stand out; as with many other categories, the premiumisation and on-the-go trends are driving format innovation. Formulation will be key to developing the market, but it will be packaging that plays a crucial role in differentiating products from rival brands.
Given the sector’s rapid growth, there is likely to be large consumer interest in new and diverse products. Making a notable first impression at retail will thus be a significant purchase factor, particularly if aligning with either of the aforementioned trends.
In the March report from GlobalData, Category Packaging Opportunities: Non-Alcoholic Drinks, packaging analyst Pawel Urban explores these key trends impacting the non-alcoholic drinks category and the role packaging can play. Drawing from research detailed in the report, we take a look at the key opportunities for packaging manufacturers to explore in this category.
Category Packaging Opportunities:
Non-Alcoholic Drinks - Identifying pack formats and features that make a brand worth paying more for
Bringing new experiences to the non-alcoholic market
Although the soft drinks market is largely dominated by well-known brands such as Coca-Cola, the growing consumer demand for ‘adult’ soft drinks is showing a desire from consumers to try new and different varieties of soft drinks.
GlobalData’s 2018 Q4 global consumer survey found that 44% of respondents at least sometimes like to try new or different varieties of hot drinks and 40% at least sometimes like to try new or different varieties of soft drinks. With a movement towards greater appreciation of the ‘experience’ of a product, packaging can help to define this newness or create new qualities for the brand to sell on.
The report highlights, for example, Smart Cups’ self-stirring, 3D-polycapsule printed cups. Filling the cup with water produces an energy drink in a novel format that could easily be replicated with hot drinks or juices. In a similarly innovative manner, the Lookas 9 Reserve Drip in Stick coffee provides a measured dose of coffee for hassle-free brewing. With a coffee pad sandwiched between two layers of board spatula, users simply need to place it in a mug and add water. Both products show ways in which manufacturers can add new dimensions to established products.
The emphasis on this approach is prioritising consumer engagement. Whether creating a product that is new in and of itself or developing packaging that creates a new experience for an established product, manufacturers should be aiming to embed their product as an experience for consumers. Doing so can help to not only provide the initial excitement of novelty, but establish a ritual around the product that sustains consumer interest.
By developing packaging that looks to connect with the consumer on this level, brands are well-positioned to generate loyalty, and thus repeat purchases, from consumers.
Convenience and sophistication drive innovation
Addressing newness does not simply mean bringing novel formats to customers, however; it must also involve manufacturers addressing the demands of changing customer lifestyles with those formats.
The trend towards on-the-go products is perhaps the clearest example of this: as consumers’ busy lifestyles increasingly push them towards products that can be consumed on the move, brands must be willing to adapt and innovate in response. This trend rewards maximal functionality; products should be designed with the greatest efficiency in mind and an assumption that consumers may be looking to use them with reduced concentration.
One example provided by the report is the Caffè Lattesso coffee drink. The product is designed much like several on-the-go coffee drinks, but has had modifications to the lid that allow a consumer to open it with one hand. Additionally, a thin protective foil, in combination with a narrow drinking spout, ensures that the entire drinking area remains clean. The product goes further however, to nod towards the premium trend; beneath the foil, consumers can also find a biscuit, providing unexpected added value.
While on-the-go designs can help cater to consumers’ busy lives, premium packaging helps to elevate what may otherwise be a fairly routine product. Offering a more upscale design can increase the likelihood of retail engagement, playing further into consumer desire for variety. Such designs can often be more sensory as well, with varied physical textures and aesthetics providing an enhanced experience for the consumer.
With GlobalData’s 2018 Q3 global consumer survey finding that more than 40% of consumers globally are interested in sophisticated/"adult style" soft drinks as alternatives to alcoholic drinks, it is time for manufacturers to take their offerings to the next level.