Low-cost packaging will support competitive prices in Spanish supermarkets
24 March 2014
According to a report from Canadean, low-cost packaging innovation will allow discounters and private labels to continue to take share from brands by offering more competitive prices. Lightweighting and using alternative materials are among the solutions that will minimise production cost for manufacturers in the highly price sensitive Spanish market.
Lightweighting and other innovations help keep down manufacturing costs
Manufacturers are under pressure to reduce costs and work with smaller budgets as Spanish consumers spend less. Lightweighting, downsizing, and innovative low cost packaging have become more important in recent years.
Advancements in packing technology also help boost productivity while minimising costs. Cargill for example, a Spanish manufacturer of edible oils, has installed an in-house SIPA SincroBloc system, which is capable of creating lightweight PET bottles, while retaining the visual appeal and functionality.
With a direct connection between blowing and filling, SincroBloc allows to produce lightweight packaging and bottles. (Source: Packaging Europe)
Changing the types of packaging materials used will also help lower costs, for example, changing from glass or rigid metal packaging to cheaper alternatives such as rigid plastic. As a result, demand for glass packaging, as a more expensive material, will decline from 9.2 billion packs in 2012 to 8.9 billion packs by 2017.
Private labels and discounters will drive packaging innovation
Spanish supermarket chain, Mercadona, has introduced a new plastic triple pack for ambient fish and seafood products. The retailer changed the industry’s traditional anchovy packaging from a metal can to a permeable plastic tri-pack. With this change,Mercadona should see cost reductions of at least EUR0.22 (US$0.30) per pack, which means EUR3 million (US$4.04 million) in annual savings.
“While consumers have always sought the best deals, the importance of value for money has been compounded in recent years by the persistent weak economy. This means manufacturers need to both evaluate current packaging to look for cost savings that can be passed on to the consumer, but also evaluate how effective their current packaging is at showing consumers that the product offers them good value for money” says Ronan Stafford, Senior Analyst at Canadean. “We expect to see more low-cost packaging innovation, particularly from Spanish discounters and private labels, as they look to communicate quality at competitive prices.”
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CPG: Consumer Packaged Goods
Rigid Plastics: Freestanding plastic tubs and bottles, among others.
Rigid Metal: Freestanding metal cans, bottles, and tins among others.
Glass: A hard transparent material that is brittle and can be easily broken. All bottles, jars, and other containers made of glass should be included. Also, thinned glass, coated glass, and glass with a plastic shield outer cover should be included.
Canadean has a long-held reputation for providing valuable and in-depth market research initially built up in beverages, and now operates across the FMCG market and related industries, including packaging, ingredients, soft drinks, beer, retail, food, foodservice, wines & spirits and cosmetics & toiletries. Canadean specialises in conducting online survey panels, producing in-depth market insights reports through qualitative and quantitative in-country analysis as well as offering clients a bespoke consultancy service. For more information please visit www.canadean.com
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