CPP INSIGHTS - JULY 2021 by creativeprintandpack

Issue 5 | July 2021

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CPP

INSIGHTS World's First Concept-Oriented Print and Packaging Magazine

AN EFFECTIVE HANG TAG Know how it grab your customer attention

TRENDING Sustainability in Packaging, Worldwide coverage

LEADLINE

Packaging is a life line to your product

CPP INSIGHTS

World's First Concept-Oriented Print and Packaging Magazine

EDITOR IN CHIEF Raghu Kacharagadla raghu@creativeprintandpack.com

FOUNDER AND MANAGING DIRECTOR KONDAIAH CHOWDARY P

WRITER CPP Insights Team insights@creativeprintandpack.com

GRAPHIC DESIGNER CPP ID Team design@creativeprintandpack.com

DIGITAL TEAM Think Beyond Creativity tbc@creativeprintandpack.com

CONTENTS SUSTAINABILITY : P2 -P25

Sustainability in Packaging, Worldwide coverage

AN EFFECTIVE HANG TAG : P27-P36

Know how it grab your customer attention

LEADLINE : P37-P41

Packaging is a life line to your product

INTR’O’ CPP INSIGHTS A UNIQUE PLATFORM OF PACKAGING

CPP INSIGHTS BUILD BRANDS We are a house of creators, thinkers, artists, and scientists. As an extension of your team, we’ll work with you to build an innovative brand that gets meaningful results. We know great design, and we believe that inspiration and creativity come from anywhere. We never stop challenging ourselves to think differently and produce compelling ideas. From packaging to brand identities, we thrive when we are able to flourish alongside our clients.

THE BUSINESS OF BEING CPP INSIGHTS Since 2007, we’ve been known for our top-notch packaging and branding skills, our passion for meshing strategy with creativity, and our willingness to take risks. We don’t believe in cookie-cutter packaging and branding solutions and our service is truly customized to meet the unique needs of each client. We thrive when we are able to grow alongside our clients and watch them succeed.

THE DESIGN & PACKAGING From full brand identities and package design to Branding, we’re known for delivering quality creative services. Here’s a glimpse at what we can design and manufacture for you...  Mono Cartons  PP & PET Boxes  Corrugated Boxes  Paper Bags  Hang Tags  Rigid Boxes  Barcode Tags  PDQ Boxes

Start Love with us: insights@creativeprintandpack.com

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SUSTAINABILITY IN PACKAGING: INVESTABLE THEMES Mapping five industry-shaping trends uncovers specific investable themes for participating in sustainable packaging.

IVE KEY TRENDS are emerging that will shape sustainable packaging and related investable themes over the next few years. First, consumers are highly aware of sustainability issues, with their concerns accelerating, but they remain confused. Second, in response to public outcry, sustainability regulation for packaging is now both global and increasingly ambitious, but it has become a complex landscape for corporations to navigate (with accelerating consumer sentiment also making it harder for companies to plan reliably). Third, across regions there are critical gaps around waste collection, recycling systems, and technology, limiting significant changes in the packaging value chain over the near term. Fourth, leading fast-moving consumer goods (FMCG) companies and retailers remain committed to transforming their portfolios, but large-scale market adoption of innovations is slow. Lastly, until further notice, plastics are here to stay, with an emerging green premium on the recycled raw material. Additionally, sustainability in packaging needs to be managed to reflect regional differences and in conjunction with megatrends. In response to this emerging outlook, specific investable themes across the full packaging value chain can be seen. In order to avoid missing out on any of these themes, we suggest starting with a few questions regarding materials and processes.

IVE KEY INDUSTRY-SHAPING TRENDS IN SUSTAINABILITY

What is in store for the packaging industry over the next three to five years in terms of sustainability? What are some emerging theses for institutions looking to invest in the space (or for current players in the packaging value chain looking to diversify beyond their current portfolios)? To find answers, we conducted extensive interviews and discussions with FMCG companies, retailers, and packaging industry executives and experts in major end-user markets across regions. We also applied the findings from our ten-country survey to capture

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consumer attitudes around sustainability in packaging. Our analysis has identified five major industry-shaping sustainability trends (exhibit).

CONSUMERS ARE HIGHLY CONCERNED, YET THEY ARE CONFUSED Global consumers are consumers rank plastic packaging increasingly worried about the that is either made from compostable environment and the impact of materials or is recyclable as quite packaging leakage. While buyers sustainable, yet they simultaneously claim to have high willingness to pay rank plastic containers and bottles for more sustainable packaging, made from such recycled materials as purchasing choices are still largely among the least sustainable. Going driven by other factors (such as forward, given the current situation, brand, quality of products, and we expect consumers to remain economics). For example, US concerned while various stakeholders consumers rank overall such as FMCG manufacturers, sustainability relatively low as a retailers, and packaging companies buying criterion among end-use ramp up their educational campaigns. factors; they regard price, quality, In the coming years, we would also brand, and convenience as more expect that brand owners will important. We see a similar pattern address the carbon intensity footprint for global consumers. Moreover, of the product as well as its packaging consumer attitudes are not always in a more transparent way by scientifically consistent: for example, implementing “carbon intensity our global survey finds that labels.” First movers of such labels

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are already present in areas such as

consumer electronics.

INCREASING AND ACCELERATING COMPLEXITY OF THE REGULATORY ENVIRONMENT HINDERS PLANNING New regulation is expanding on accelerating and becoming more multiple fronts and is becoming ever ambitious. Beyond plastic bans, stricter. At the same time, regulatory plastic taxes have started to be focuses and approaches vary introduced in Europe, with recovery considerably by region and diverge schemes to be developed on a even further when looking at country, national level.1 Taken together, these county, and city-level regulations. trends limit companies’ ability to plan Understanding this variation will reliably and make navigating the require a granular approach. landscape even more complex, Meanwhile, the number of new especially for multinationals. sustainability regulations is

CRITICAL GAPS IN THE VALUE CHAIN EXIST, LIMITING NEAR-TERM MAJOR CHANGE With demand for packaging low recycling rate of plastics are showing strong, global growth, several critical gaps in the value chain leakage or unmanaged dumps of around recycling system capabilities packaging have increased. In and economics. For example, current particular, plastics have low overall sorting technology cannot effectively recycling rates: globally, only about handle approximately 30 percent of 16 percent of all plastic waste is plastic packaging. In reprocessed to make new plastics, addition, coordination across the and the majority is either incinerated value chain is complex to scale, with or sent to landfill. In the United recycling operations fragmented States, for example, key drivers of the across geographies.

FMCG companies and retailers remain committed, but market adoption of innovation is slow With consumers increasingly made strong commitments to aware of and more vocal about their sustainability. However, transforming sustainability concerns, and with the packaging portfolio has proved to growing regulatory pressure, leading be challenging, with the need to FMCG companies and retailers have manage complex trade-offs

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encompassing multiple implications for sustainability—for example, achieving high recyclability versus a low carbon footprint. Meanwhile, options can be restricted because of often slim margins and important branding implications. In addition, what is

technically and economically feasible to realize will vary by geographic region. Nevertheless, despite these challenges, FMCG manufacturers and retailers continue to deliver innovations in a bid to achieve their own sustainability commitments for packaging in two specific areas:

 Recyclable or alternative materials. Recent years have seen a steady introduction of new materials, technologies, and coatings to help address the sustainability challenge.  Markets for reusable or returnable. Circular systems of packaging are not new; several countries still have a national system for managing returnable packages such as beverage bottles. However, extensions of this concept are now emerging whereby consumers also return packaging and refill on the go (examples include food service and in-store dispensing systems), and there also are new options for return and refill at home (for example, ecommerce packaging or refill pouches). While these innovations are moving us in the right direction, broad market implementation has yet to break through. Instead, implementation has mainly been seen among a limited range of SKUs

and within country-specific pilots. One challenge is that the majority of innovations to date are typically far less cost effective, efficient, or convenient than incumbent packaging.

UNTIL FURTHER NOTICE, PLASTICS ARE HERE TO STAY, WITH AN EMERGING GREEN PREMIUM ON THE RECYCLED RAW MATERIAL With current infrastructure new plastic resin usage, and gaps and technical challenges in accelerating the use of other recycled transforming packaging portfolios, materials. Globally, there is increased leading brand owners seem not to be demand for recycled plastic materials making big shifts away from plastic in not only packaging but also textiles packaging—for now. Instead, they and other applications. With low are working on improving the use of global recycling rates of plastics, gaps plastics by consolidating the types of in infrastructure, and continued plastic used (with a focus on expansion in demand, there is a improving recyclability), decreasing growing green premium for access to

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high-quality volumes of recycled plastics. This is likely to remain as long as there is a supply–demand

gap, but it will differ according to region.

MPACT OF OTHER MEGATRENDS AND REGIONAL DIFFERENCES Not surprisingly, sustainability is not the only trend affecting the packaging industry. Trends such as the shift to e-commerce, rapidly changing consumer preferences with high price sensitivity, consumers focused on health and wellness, and digitalization are here to stay. In particular, we have seen food safety and hygiene grow as a key concerns for consumers in the COVID-19 pandemic alongside an increased share of packages sold via e-commerce channels. Additionally, reasonable cost and convenience continue to be “musthaves” for packaging. At the same time, the strength and pace of these trends can differ significantly by region: our research has revealed common global themes, but also sizable differences in perception. Similarly, the regulation strength differs by country and region, just as much as recycling infrastructure does.

NVESTABLE THEMES AND HOW TO START TO ADDRESS THEM Against this backdrop of increased pressure from regulations and consumers, we see several specific investable themes relevant to the sustainablepackaging agenda. IMPROVE PACKAGING RECYCLABILITY. This concerns packaging and raw and board producers have developed materials that are more conducive to fiber-based materials such as molded recycling or enabling technologies pulp or functional papers to replace that improve recyclability. For polymers. Finally, improved example, we have seen numerous packaging recyclability also R&D efforts to develop recyclable, encompasses technology that high-barrier mono-materials (such as enables improved sorting and all-polyethylene materials or subsequent recycling of the components). It could also include packaging (such as digital bar codes). nonpolymer substrates; several paper INCREASE USAGE OF RECYCLED CONTENT IN PACKAGING. An investable theme could include capacity beyond polyester (PET) either supporting infrastructure to cover emerging recycled system development or polymers such as polypropylene (PP) expanding current recycling and polyethylene (PE). Similar to

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the theme of recyclability, enacting digital technology changes could also enable increased usage of recycled Scale up usage of compostable packaging. This theme includes implementing raw materials or packaging that can be composted, often based on using renewable resources such as fiber- or starch-based raw materials. It could be interesting to look at opportunities that would enable athome or community composting schemes given the few industrial composting facilities that exist

materials (for instance, to improve sorting).

globally. One challenge is the limited barrier properties of some compostable packaging that inhibit large application areas. Another area to consider could be innovating new coatings or adhesives that would enable the composting of the material and support scaling this application to other end-use areas.

INTRODUCE REUSABLE AND RETURNABLE PACKAGING. An investable theme could center (even though they are a proven around systems for using returnable concept historically). The rise of eor refillable containers and commerce specifically can lead to an packaging. However, scalability is yet increase in reusable and returnable to be proved for many of these packaging, pivoting from the mostly models, and refill-and-reuse one-way flow of packaging currently approaches are still in their infancy in use. DEVELOP NEXT-GENERATION LIGHTWEIGHTING. One of the evergreen packaging materials to replace current trends, light weighting is expected to packaging with lighter materials. accelerate further based on two Moreover, while previous light factors: first, it will allow for less weighting trends have spurred the material usage and, second, it may rise of multilayer materials, we would lead to lower transport-related expect increased focus on highemissions. Investments could be barrier mono-materials to allow for centred on technology to enable this both lightweighting and high approach or on innovations in recyclability.

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LOWER OVERALL CO2 FOOTPRINT AND MAKE THE CARBON INTENSITY OF MATERIALS, PACKAGING, AND PRODUCTS MORE TRANSPARENT. Previous research has shown stand to benefit from the global trend that packaging material can account to reduce greenhouse gas emissions for more CO2 than the actual product and can become differentiators. This contained. In light of this and their can be fueled by ambitions from sustainability commitments, FMCG some FMCG players to increase manufacturers and retailers are emissions transparency by printing exploring switching toward lowerthe carbon footprint on the emission substrates—and players packaging. Such carbon-intensity operating in substrates with typically labels that create transparency for higher emissions are exploring more customers could have a large impact carbon-neutral packaging via shifts to on the packaging value chain and green-energy usage or even carbonresult in a need for packaging offset or storage options. Thus, redesign and further shift substrate technologies or packaging products usage to lower-carbon-footprint that offer a relatively lower carbon materials (which may not necessarily footprint now or in the future be recyclable). compared with incumbent packaging Opportunities arising from these themes can be applied across the packaging value chain—but investors will need to be aware of regional and product differences because these might drastically change the outlook for potential investments. Given different regulatory regimes and consumer behaviors, regional differences might indeed change the business outlook, with packaging solutions facing significant variation in terms of consumers’ willingness to pay for sustainable solutions. This complexity cannot be overestimated and requires indepth analysis. To get started with addressing investable theme opportunities, we suggest a few material questions:

HAT GRANULAR SUSTAINABLE-PACKAGING OPPORTUNITIES ARE AVAILABLE? We suggest conducting a rapid but broad scan of companies offering the most promising sustainable solutions for the regions and applications in focus (without forgetting to address regulatory developments).

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HAT ARE THE BIG BETS ON FUTURE MATERIALS AND PACKAGING? Based on the sustainability scan, categorize what are the most feasible and actionable opportunities to capture a premium from sustainability innovation over the short term versus the long term. It will be important to understand the actionability: that is, how rapidly companies’ innovations can be scaled, as well as their potential cost competitiveness and barrier performance versus incumbent materials.

HAT ARE THE OPPORTUNITIES BEYOND INNOVATIONS IN PACKAGING AND MATERIALS? This would include opportunities to facilitate the circular business case around infrastructure and other technology to advance the recovery, reuse, or recycling of previously used materials (for instance, chemical recycling). It could also include scanning and understanding solutions to minimize leakage into the environment (such as digitally enabled technologies in sorting and recycling). Sustainable packaging is a rapidly evolving area. Multiple attractive investment themes are available to achieve large-scale improvements toward more environmentally friendly packaging with an attractive growth profile. However, it will require a granular approach and deep understanding of actionable solutions to identify attractive themes that are truly scalable.

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SUSTAINABILITY IN PACKAGING: CONSUMER VIEWS IN EMERGING ASIA

Rising sustainability concerns within developing Asia, a key growth vector, make understanding the consumer perspective critical to capturing the growth opportunity for packaging companies.

ith China having displaced the United States as the largest global packaging market, Asia remains packaging’s top growth market. As the use of packaging in Asia continues to soar, so too does the ecological burden, with significant leakage of packaging materials into the environment— often as a consequence of lack of waste collection and recycling systems at a scale needed to match strong growth in demand. How are these impacting consumers’ views on sustainability in packaging? To understand this better, we launched a survey across ten countries, including three fast-growing emerging Asian economies (China, India, and Indonesia), to explore consumers’ attitudes. Our findings built on prior work focusing on consumer sentiment globally and an earlier deep dive into consumer sentiment in the United States. Survey respondents revealed both overarching and more country-specific findings. Three key highlights can be observed. First, consumers in China, India, and Indonesia all feel more strongly than most others about sustainability problems. They also claim to have the highest willingness to pay for green. Second, in all three countries, consumers’ top concerns are centered around water and air pollution and less so around waste production, which is viewed with more concern in other surveyed countries. Echoing our global findings, consumers also perceive sustainable packaging to be a top priority for food-related products; however, the specific food sub segments viewed as most important differ by country. All three generations of consumers surveyed across the three countries are highly concerned about the environmental impact of packaging. Overall, Generation X demonstrates the highest level of environmental concern across www.creativeprintpack.com

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different sustainability issues, followed by Gen Zers, millennials, and baby boomers, respectively; however, there is some granular variation. Third, while surveyed consumers align on their perception of the most unsustainable packaging material, country-specific views differ on the most sustainable—similar to global findings. Looking ahead, what consumers wish to see more of is recyclable or compostable plastics films, as well as more fiber-based packaging. Emerging Asia remains the key growth market for many packaging companies to target. With a strong increase in concern around sustainability, it will become critical to think through the “green narratives” of any growth strategy along with related strategic options. In order to seize the opportunity, we recommend considering three factors in your strategic planning.

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EMERGING ASIA REMAINS THE KEY GROWTH MARKET FOR MANY PACKAGING COMPANIES TO TARGET.

SUSTAINABILITY CONCERNS RISE STRONGLY IN EMERGING ASIA Over the past decade, the global packaging industry has enjoyed steady growth, with the economic boom in emerging Asia being a key growth driver. Headline changes include strong growth of organized retail and increased use of packaging to accommodate consumer demand

for convenience. This strong growth in packaging has led to an increased environmental burden due to a frequent lack of the fully developed packaging-collection and recycling systems at a scale needed to manage increased waste.

This has not gone unnoticed in the region. Pressure to reduce packaging waste has risen sharply, along with actions by fast-moving consumer goods (FMCG) manufacturers, retailers, and legislators. Despite these measures, consumers in our survey continue to be highly concerned, with respondents in China, India, and Indonesia, together with respondents in Brazil, demonstrating www.creativeprintpack.com

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the most concern globally—concern that has increased since the COVID-19 pandemic (Exhibit 1).

There is a similar finding when it comes to consumers willingness to pay for green packaging: significantly higher willingness to pay for sustainable food packaging is observed in China, India, and Indonesia compared with other surveyed countries around the world. Similar to those countries, Brazil also shows a high willingness to pay for green compared with the other surveyed countries. This demonstrates the relatively high level of consumer awareness in these markets and the critical need for stakeholders to take action. Two further questions related to the above findings then follow: what are consumers in emerging Asia concerned about, and who is driving that increased concern? On the first question, views across the three countries in focus are quite www.creativeprintpack.com

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aligned: consumers perceive water and air pollution as key areas of concern. This differs from other surveyed countries, such as Japan, and in Europe where marine litter is perceived as a higher concern. Consumers in the United States and the United Kingdom also point out that waste production is a major concern, while India and Indonesia ranked this as one of the least important issues. The categories in which consumers consider sustainable packaging most important differ somewhat between countries—although all focus on food-related products. In China, priority centres on fresh fruit and vegetables, fresh meat, and dairy products. In India, the highest importance is given to fast-food packaging, followed by dairy products and pet food. Indonesia ranks beverages highest, followed by dairy products, and fresh fruit and vegetables.

When looking more closely into the second question—who is driving the increase in concern—we find that actually all consumer groups are concerned. Overall, Gen Xers show the highest levels of concern, followed by Gen Zers and millennials, and baby boomers (Exhibit 2). Looking at the two key areas of concern—air and water pollution—Generation X is particularly concerned in Indonesia, while there is more variance in China and India.

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McKinsey survey indicates that consumers around the world disagree about what they see as the most sustainable packaging materials; however, there is more consensuses on what they regard as the least sustainable materials. Among our focus countries, consumers in China and Indonesia perceive plastics that are either compostable or recyclable as being more sustainable (a view similar to that of Brazilian consumers). This differs from consumers in India, who perceive paper and glass as more sustainable. Overall, consumers are looking for more recyclable or compostable plastic films and more paper-based packaging (Exhibit 3). Recyclable, rigid plastics rank quite low, and so do both glass and metal.

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Many packaging companies target emerging Asia as a vital growth vector, and they also need to develop strategies for success. Examples include identifying opportunities to serve the target market (for example, high-end market versus mass market); determining which customers to target (multinational versus local); adopting the best strategy (such as unit-cost leadership versus innovation leadership); and approaching growth strategy (organic growth versus acquisitions). However, with a strong rise in sustainability concerns in the region, this will not be enough. Accordingly, packaging companies should consider three further elements:

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 First, understand how local consumers use products and dispose of the packaging. Our findings show some common regional themes around sustainability, particularly linking high awareness and willingness to pay. There is also an emerging wish among surveyed consumers to see more recyclable or compostable plastic films and paper-based packaging in the future. Inevitably, when looking at a more granular level, there are multiple differences between the countries and among end-use segments, which require a deeper understanding of the focus markets. Therefore, there isn’t a collective regional solution for determining what packaging will work best and what sustainability levers to pull. In most cases, we suggest using the emerging cross-country themes as a base view supplemented by granular field research to further inform strategic planning. This should include comprehensively mapping out cradle-to-grave packaging journeys from filling to usage and disposal. Such insights will serve as a starting point for understanding the strategic options that exist around the fit of the packaging for a given value chain and the range of improvement levers available.  Second, take an incremental approach, and act sooner rather than later. Even with the indicated high willingness to pay for green, this doesn’t necessarily translate into real consumer action. On top of that, consumers may not always know what to expect or exactly what they want. Given the high urgency to act, we therefore suggest considering available “lowhanging fruit” actions initially. These should be actions that can be taken with little to no impact on operating costs or capital-expenditure needs, functionality, or attractiveness of the packaging. For example, decrease complexity, remove unnecessary use of packaging, conduct a light redesign to improve recyclability, and, where possible, consider material substitutions for more mono-materials. Once these actions have been successfully implemented, companies can then consider addressing systemlevel changes that require in-depth value-chain collaboration.  Third, ensure clear communication around sustainability narratives for both product and packaging. It is apparent from our survey that consumers would be willing to buy more sustainable products if they knew what they were buying. Ensuring that the packaging can communicate the

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sustainability narratives relevant to local consumer concerns will be essential. Also, in the context of increased local and global regulation around sustainability, using packaging to further inform consumers about how a product can be recycled will be vital. Viewing sustainability issues as a key factor in strategic planning will enable packaging companies to determine how sustainability can be used as a differentiator to attract consumer interest and drive growth. Environmental concerns are top of mind for consumers in emerging Asia. Viewing sustainability issues as a key factor in strategic planning will enable packaging companies to determine how sustainability can be used as a differentiator to attract consumer interest and drive growth.

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SUSTAINABILITY IN PACKAGING: INSIDE THE MINDS OF GLOBAL CONSUMERS

In the wake of the COVID-19 pandemic, some global themes regarding consumer sentiment are evident. But perceptions and priorities regarding packaging differ by country and require a granular response.

ustainability remains a key topic for the packaging value chain, but there are few (if any) insights into consumer perceptions globally—especially now that the COVID-19 pandemic is also influencing consumer sentiment and behaviour. To better understand this influence, we launched a survey across ten countries to explore consumers’ attitudes toward sustainable packaging, building on our earlier work focusing on consumer sentiment in the United States. Consumers who took part in the survey have uncovered three main findings. First, as a result of the COVID-19 pandemic, consumers now place significantly more value on food safety and hygiene. This is a key element of the next normal in packaging, whereby packaging suppliers will have to rethink materials and design requirements. Second, consumers see sustainability as being increasingly important as we emerge from COVID-19: marine litter is top of mind in Europe and Japan, while pollution is more of a concern in other Asian countries and the Americas. Across the globe, a vast majority of consumers claim to be willing to pay more for sustainable packaging. Third, consumers around the world disagree on what packaging type is most sustainable; however, they do agree on what are the least sustainable options. Thus, to respond effectively to these evolving consumer sentiments, a granular view will be needed. In this article, we suggest three critical questions that

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packaging players need to answer to get started on creating an actionable fact base on which to build their future strategy. To better understand this influence, we launched a survey across ten countries to explore consumers’ attitudes toward sustainable packaging, building on our earlier work focusing on consumer sentiment in the United States. COVID-19’S IMPACT ON SUSTAINABILITY IN PACKAGING Ahead of the COVID-19 companies responding to the crisis, sustainability was top of mind regulatory push had a profound across the whole packaging value impact on upstream players in the chain. Consumers were becoming packaging industry: they were acutely aware of the packaging expected to help meet commitments. sector’s environmental footprint, However, during the early stages of and, in turn, rising public awareness the pandemic, hygiene concerns took sparked responses from legislators priority over the drive to eradicate around the world. With sustainability single-use packaging in several increasingly part of their value jurisdictions. This evolution in proposition, fast-moving-consumerconsumer sentiment is also reflected goods (FMCG) and retail companies in our survey, which indicates that promised swift action and made bold the pandemic has heightened commitments to improving the concerns around food safety, recycling potential of their packaging. especially in the hardest-hit countries This combination of downstream pull (Exhibit 1). from consumers along with FMCG

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THE NEXT NORMAL OF SUSTAINABILITY IN PACKAGING As we enter the next normal, pressure on sustainability is building once again. FMCG manufacturers and retailers continue to innovate with new packaging formats designed to improve recyclability—notably with the use of recycled content such as post-consumer resin (PCR)—as they approach their own sustainability commitments and also respond to consumer expectations, critical nongovernmental organization voices, and regulatory pressure. New regulation is currently expanding on multiple fronts: no longer is it confined to just a few countries or regions. Today, sustainability regulation has become much more of a global phenomenon, even if the level of regulation varies. At the same time, consumer concerns remain: when we asked consumers about their perceptions of packaging sustainability compared with pre-COVID-19 times, only 4 to 11 percent of consumers globally said that they are now less concerned. Consumers are generally more concerned in developing economies such as India (87 percent of consumers are more concerned), Indonesia (80 percent), and Brazil (65 percent). Nevertheless, consumers in more developed economies are also

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showing higher awareness around sustainability issues: for example, 48 percent of US consumers are more concerned. However, what consumers are concerned about differs depending on region (Exhibit 2).

In all countries surveyed, the overwhelming majority of respondents claim to be willing to pay more for sustainable packaging across end-use areas. In food service, for example, highest willingness to pay is in China, where 86 percent of consumers say they are willing to pay “a lot” or “a bit more” for sustainable packaging, followed by Indonesia, the United States, and Brazil (75 percent, 68 percent, and 66 percent, respectively). In Germany, Italy, India, and the United Kingdom, around 56 to 59 percent say they are willing to pay “a lot” or “a bit more” for sustainable food-service packaging. Willingness to pay more for green in food service appears lowest in Japan and France, where 48 percent of consumers are willing to pay more for sustainable packaging. At the same time, better labelling on the packaging (explaining its sustainable attributes) and increased availability would encourage 23 to 61 percent of the surveyed

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consumers to buy more green packaging. Taken together, these facts plainly suggest that a clearly communicated sustainability benefit is a strong value proposition for packaging suppliers.

SUBSTRATE VIEW: WHAT DOES THE GLOBAL CONSUMER PREFER? It is often wondered what packaging substrate is seen as the most sustainable by consumers. Our survey indicates that consumers around the world disagree about what they view as the most sustainable packaging materials, but their perception is quite aligned on what they regard as the most unsustainable materials (Exhibit 3).

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Paper-based cartons rank quite high for sustainability in the United States and among surveyed countries in Europe, as does glass. However, this is not the case in Brazil, China, and Indonesia where both types of packaging are ranked much lower. Compostable plastic films have a strong global recognition as being sustainable.

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Packaging combining plastic, paper, and aluminium foil (for example, flexible packaging) ranks lowest from a consumer perspective across all surveyed countries. Additionally, aluminium foils, plastic bottles (even with recycled content), and metal containers rank on the lower part of the spectrum. THREE CRITICAL QUESTIONS TO CONSIDER Packaging suppliers should take a strategic look at their portfolios and assess them with three key questions in mind:  What are the substrate shifts you can foresee in your focus markets based on anticipated consumer perception and regulatory changes?  What is the resulting value at stake (that is, where are you most exposed given this and your market position)?  What are the potential growth opportunities for which you would be uniquely positioned to provide winning solutions? Answering these three questions will help to create an actionable fact base. Based on this, packaging suppliers should update and enhance their product- and technology-strategy road map with relevant sustainability narratives. Doing so will help to identify growth opportunities and the partners needed to deliver them and provide insight into areas of risk in instances where volumes might move to alternative substrates if no solution can be developed. Consumer sentiments seem to be shifting continuously, most recently with heightening focus on food safety and hygiene. Understanding consumers’ sentiments and preferences around sustainability at a granular level will be a key early indicator for the value chain as to future regulatory pressure and instances where large packaging-substrate shifts could occur. Proactively identifying these sentiments and potential shifts could allow packaging suppliers to stay on top of trends as they develop and to become a thought partner by supporting customers in revamping their packaging portfolio—ultimately creating significant growth opportunities.

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DID YOU KNOW The Chinese takeout box with its Japaneseinfluenced origami folds is actually an American Invention. On November 13, 1894, in Chicago. Inventor Frederick weeks Wilcox patented his ‘paper pail’ a single piece of paper creased into segments and folded in such a way as to create a leak-proof container which he secured with a wire handle. ------------------------------------------------------------------------------

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AN EFFECTIVE HANG TAG

angtags are the labels attached to clothing that usually contain the basic information about the item. Size, price, brand… all this can be found on the hangtag. But what is now becoming more prevalent in the industry is the practice of using hangtags as another weapon in the battlefield of marketing. Although many people think they are just there to tell the customer how much the item costs, hang tags are a branding opportunity that is often overlooked in the retail industry. Not only are they important for the end-user, but they can support brand identity and increase awareness. From what a hang tag means to the consumer to the different finishes available to further your branding, learn about the importance of the underestimated hang tag.

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 What a Hang Tag Means for the End User of Your Product  A Famous Hang Tag That Demanded Attention and Broke Through the Noise  More Important Than Ever: Eco-Friendly Retail Hang Tags  Different Finishes Can Create a Distinctive Effect for Your Branding WHAT HANG TAG MEANS FOR THE END-USER OF YOUR PRODUCT Hang tags are beneficial for the details that are important to a customer such as sizing, pricing, and brand. But they are so much more than that in today’s bustling retail industry. Here’s just some of the information you could include:

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Care information - Advises the customer on how to wash their garment and makes your brand feel more credible. Material details - This is especially important to environmentally conscious shoppers who want to shop sustainably. Unique selling points - Differentiate your garment from the rest and flaunt its best attributes. A high-quality branded swing tag ensures the customer that the product is of the same standard and adds to its credibility. Also, it gives you the space to demonstrate why they should choose your garment over any other brand. Whether you’re showcasing the standout features that are a major selling point for the garment or including important material information, customers will resonate with this and take notice that the design includes these details that are often neglected. Connecting with consumers has never been more important. A FAMOUS HANG TAG THAT DEMANDED ATTENTION AND BROKE THROUGH THE NOISE Innovative hang tags can be a selling point for your garment and in some cases, will be left on to showcase value, quality, and the brand itself. For example, Off White’s iconic industrial zip tie paired with the black and white striped hang tag. It contrasts with the luxury and expense of the fashion brand and everybody thinks twice about cutting that prestigious tag. This bold statement has created brand loyalty and customers will buy most things with that famous hang tag. It shows that hang tag designs don’t have to be overly complicated and that a well-made one can establish itself as an industry leader. Breaking through the noise isn’t easy, but creating something with the potential to do so is made easier with the creativity hang tags give you. MORE IMPORTANT THAN EVER: ECO-FRIENDLY RETAIL HANG TAGS The fashion industry is one of the major contributors to pollution in the world. People are quickly becoming more educated about the brands they purchase from and their environmental impact. This includes the sustainability of the fabrics used right down to the material of the hang tag.

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Opting for an eco-friendly alternative such as sustainable papers for hang tags and vegetable inks is a step towards reducing the harmful impact fashion has on the environment. Taking a position on sustainability ensures a place within the everchanging industry. DIFFERENT FINISHES CAN CREATE A DISTINCTIVE EFFECT FOR YOUR BRANDING When your product is competing amongst others in an oversaturated retail environment - you need to stand out. Hang tags play a vital role in brand awareness and you’re missing the chance to extend your narrative if you’re not utilizing them. You’re no longer restricted to the traditional rectangle hang tag with the usual plain font price, sizing, and logo. Bespoke clothing branding specialists can give you the tools to make truly individual garment trims. Using cutting-edge printing techniques, you can create compelling designs for your retail hang tags that not only make an impact but are in line with your branding. Matte Lamination - Create a soft and subdued look with this technique that works well with a minimalistic design to really create a sophisticated hang tag. Foil Stamping - Enhance the look of your hang tag by bonding metallic foil to create a highly visual and attention-grabbing finish. Embossing - Using heat you can accomplish a raised effect which works especially well to make logos stand out against an intricate background. These are just a selection of innovative printing techniques that you could use on your hang tags. But as you can see, you really do have the power to create totally unique tags. ARE YOU OVERLOOKING THESE INNOVATIVE TAGS, BADGES, AND TICKETS TOO? So you know the importance of hang tags now. But are you neglecting the other important garment trims that could elevate your branding further? We’ve created an all-in-one guide that covers everything you need to know about adding a fashion-forward finish to your garments.

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DESIGNING A HANG TAG? HERE’S WHAT INFORMATION TO INCLUDE Why hang tag your custom apparel? 1. They draw attention: In a retail setting, people come into contact with a lot of brands, often displayed close together with similar products. Anything you can do to differentiate your apparel will help get your brand noticed. 2. They tell a lot about your product and your brand: Any marketer will tell you that a customer's buying cycle goes something like this: emotional decision, rational justification. Hang tags provide you the valuable opportunity to appeal to both considerations. The color or material choice, your logo, or tagline may all evoke a feeling for a customer, while your highlighted features and benefits can add the validation necessary to justify their purchase. 3. They add perceived value: Among the more tangible advantages, when it comes down to it hang tags also just look great and give a certain oomph to your apparel that customers will notice. In marketing terminology, a hang tag adds to your apparel’s perceived value, the customer’s evaluation of a product’s ability to fulfill a need and provide more satisfaction than a

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competing product. Luxury brands are built on this. It’s the perceived value that justifies the price. So, what information do you REALLY need? In this case, need is a pretty relative term. Unlike custom relabeling, where certain information is legally required, hang tags can be as varied as the apparel itself. Since there’s nothing you absolutely must have--though your brand name would probably help--there’s a lot of potentials to be creative with what information you decide to include. A great place to start is to consider the questions a customer might ask before purchasing your apparel. Are there special features of the product that aren’t instantly recognizable? Or there a mission statement or a company ethos that would resonate with your audience? Your hang tag is valuable, but small, a bit of real estate. Choose what will actively work to sell your product, engage your customers and create return buyers. Here are a few different things you might want to include.

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Brand name and/or logo: Your brand name and your logo are probably the closest things to a must-have. After all, if someone can’t tell whose product they are buying, the chances of them becoming a return customer are pretty slim. It’s important to keep on-brand here, avoiding inconsistent typography and making sure your logo scales well without being significantly altered. Tagline: Your tagline sums up your company vibe in a concise, catchy way. What could be a better addition to your hang tag than that? A brief “About Us”: If you’ve got a manifesto, a back story, or a cause that a tagline just won’t cover, it’s worth including a lengthier message. What your company is passionate about matters to your customers and if it’s something unique to you, they definitely want to hear it. This is especially important if the part of the proceeds of their purchase goes toward a charity or fundraiser. Your customers will feel good about contributing to a bigger cause, and statistics show it can even be a deciding factor when making a purchase. Point of contact: Whether it’s your website, social media handle, email address (even physical address!) by including an avenue of contact, you open yourself up to return customers. It will allow them to see your other products, learn more about your company, tell their friends and, hopefully, stay in touch. And if they already liked your tee enough to buy it, there’s a good chance they’ll like that hoodie too.

Product information: If your apparel has benefits or qualities that aren’t immediately apparent, you’ll definitely want to include some additional product information. Don’t assume everyone can tell your garment is sweat-wicking, has a special hidden pocket, or will stay magically wrinkle-free. Choose to highlight the specific qualities your target audience will care about.

Call to action: A call to action asks your customer to do something. Whether it’s tagging or following you on social media or viewing a specific promotion or website, always consider what might motivate someone to follow through. Your call to action can also function as a thank you by providing a discount code customers can use on their next order.

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Care instructions and fabric compositions: These bits of information are important if you’re selling an entirely bespoke garment or if there’s a quality of your fabric you’d really like to emphasize, like “100% organic cotton”. If not, consider leaving this off. Your manufacturer’s tags, or custom relabeled replacements, will already have this information listed.

Price and UPC: If you see your apparel in a bigger retail setting, you’ll want to include a price and maybe even a UPC. A UPC, or Universal Product Code, is a 12 digit code assigned to retail merchandise that identifies the product and the vendor who sells it. You don’t need a UPC code to sell in a retail setting, but if you’re planning on selling a lot of garments, it may help keep things running smoothly.

Photo or illustration: When you include a hang tag, your garment becomes a branded package. Because of this, an effective design is not only informative, it’s visually engaging. While we’ve focused a lot on what your hangtag says, don’t underestimate the benefits of featuring a photo or illustration. An image can tell a customer a lot about your brand, the lifestyle its wearer might embody and will be more eyecatching than an overly text-heavy design.

Stand out on the rack: Products, especially garments in crowded retail stores, can easily get lost on the racks. Having a distinctive hangtag that’s strategically attached to your product can make it stand out from the crowd. A distinctive logo, bright colourful designs, or even a strange and unique shape; these are all things which draw attention, and as a result, make your product stand out from the rest and help customers identify your product.

Help customers invest in your brand: By using a hangtag to share your brand’s unique story, you allow customers to become attached to your brand, and to foster a sense of loyalty. This is especially true in the case of eco-conscious, locally made, or one-of-a-kind pieces. Explain your mission statement and fair trade policy on a hangtag, and this will allow customers to feel part of something bigger. People are becoming more and more environmentally conscious and are happier to pay extra if there’s a good reason to, but they need to see that reason!

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Give easy access to care and pricing information: Presenting this information on the hangtag makes your brand feel more transparent and helps your customer make an informed purchase. Many of our clients’ pricing strategies account for the cost of ethical materials and their own labour, making their products appear pricier than mass-produced products in the same store. Asking a fair price (alongside your brand’s story) can help educate customers on the true cost of consciously designed products. If there’s too much information for the space available, then a QR code will allow customers to go directly to a webpage, where you can explain in detail exactly what has gone into the product they are holding in their hands. Promote your business: Think of a hangtag as a business card. Use it to not only sell the product it’s attached to, but to advertise your business at the same time. Print information on there that draws people to your website. Advertise your social media channels like Facebook, Twitter, or Instagram. Use the hangtag to offer discounts on the customer’s next purchase. It’s an opportunity for promotion as well as simply communicating basic information. ADVICE ON CREATING A HANGTAG If you are an emerging designer and would like to create a hangtag that does more than simply give the size and price, then we have these suggestions:

RESEARCH OTHER BRANDS Look at other brands in your similar market space and assess what you like and don’t like about the branding.

THE DEVIL IS IN THE DETAILS Make sure that every detail of your hangtag is well thought out: your typeface, brand colors, paper texture, and method of attaching the hangtags must match your overall brand identity, and appeal to your target customer. GRAB THEIR ATTENTION You are competing in a sea of other apparel brands and you want to impact your customer immediately.

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LOGISTICS PLAY A PART If you are wholesaling, make sure to leave space for the retailer to include their SKU and pricing information.

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REMEMBER THE GOLDIE LOCKS RULE Not too much information, but just enough to make a memorable impression. USE IT FOR PROMOTION Include your website and social media usernames on the card, so customers can find you later. Maybe offer discounts or advertise specials.

FIRST IMPRESSIONS COUNT If a package is expensive, there’s a perception that the garment is of a higher quality. If you go that extra mile with your hangtag, the customer will notice.

THINK OUTSIDE THE BOX You can combine different materials, such as hang tags, price tickets, barcode tags. Show your uniqueness and add an extra eyelet, a gold diamante, or something special so your customers remember their purchase. Whichever design you come up with for your hangtags, Image Label Systems can create them. We take the time to get to know your specific requirements and create solutions that work for you. Product packaging is the face your brand presents to the world, so it always pays to put your best face forward.

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LEADLINE PACKAGING IS A LIFE LINE TO YOUR PRODUCT Every year, 95 percent of new products fail. The reason is simple: Most customers don't have the time or energy to weigh the advantages and disadvantages of the products in their shopping carts, so they use a shortcut to make their decision. That shortcut is your product's packaging. First impressions are very important, and your packaging is often a consumer’s first introduction to the product. As such, product packaging is a factor that manufacturers should never overlook. The importance of product packaging is multi-faceted and can go a long way in securing a good first impression and lasting brand loyalty.

ATTRACT BUYERS

When considering the importance of product packaging, it’s crucial to consider the wants and needs of the consumer. The main goal of creating any product, after all, is to attract customers and encourage them to buy your product. Because first impressions are so important to the buying process, well-designed product packaging can go a long way in putting your product into the hands of buyers. Choosing a style and colours that will appeal to consumers and encourage them to pick up your product is very important, as is choosing high-quality packaging materials. The product packaging is a reflection of the product inside and the brand as a whole. Therefore, when designing product packaging, many brands conduct extensive research into the wants and needs of consumers to ensure their packaging is attractive and compelling. PACKAGING IS A LIFE CELL OF YOUR PRODUCT

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Packaging counts key part of the product brand and marketing. A unique packaging can increase the product attractiveness and thus affect to the willingness to buy the product. Packaging is as important as the product itself. Its purpose is to stand out from the shelf or website, enhance sales, provide relevant information on the product and augment interest. Two thirds of people say that the packaging has an effect on their buying decisions. A packaging can also tell a whole story about the business behind the product and the product’s environmental, social and economical impacts. It is a tool to communicate company’s values and great benefits that the product brings to the consumer.

GREAT PACKAGING IS ESPECIALLY SIGNIFICANT FOR GROWING STARTUPS BECAUSE IT CAN HAVE A DIRECT IMPACT ON SALES AND A COMPANY'S OVERALL APPEAL.

MAKING YOUR PRODUCT THE STAR The colours used in your product packaging play a key role in consumer buying decisions. Your brain reacts to colours in different ways, so choose your packaging colours accordingly. For example, products with white packaging convey simplicity, safety and purity. Colour experts cite that the more colour added to a product’s package, the less sophisticated the product is. Other colours, like blue, convey many different meanings. A light sky blue colour is considered more playful, while a dark navy is considered much more professional. Worldwide, blue

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is the most liked colour, but that doesn’t mean you should automatically choose the likable colour. It’s important to study your target demographic before deciding on a colour scheme for your product packaging. A product’s packaging should highlight its positive attributes, accentuating the elements that will get a consumer from “thinking about it” to ‘purchasing it’. It should be consistent with your overall branding efforts, from color scheme to fonts and images used. It should also send a clear message – is your brand all about luxury, or having fun, or being environmentally responsible and all-natural? The types of materials, colors, and images you use in packaging should all point to your overall branding theme. Packaging designs that incorporate clear plastic windows into cardboard designs or rely on clear plastic folding cartons have the added advantage of literally showcasing your product, displaying it while the same time being able to highlight key features with text and illustrations.

…IT DIFFERENTIATES YOUR BRAND FROM OTHERS There are thousands of products on the market vying for your customers’ attention. According to The Paper Worker, one-third of a consumer’s decision making is based solely on product packaging. To succeed, your brand packaging has to stand out and look different from your competitors.

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PRODUCT PACKAGING IS A MARKETING TOOL You know what makes your product exceptional and unique, but the average consumer in a retail venue might not. The goal of marketing is to develop your brand and make it appeal to consumers, and the packaging you choose plays an integral role in this process. Nothing defines the image or solidifies a consumer’s impression of your product more than its packaging.

Your product’s packaging can be a helpful marketing tool through instore advertising. Branded products are easily recognized, so designing packaging with your logo front and centre helps consumers remember your product next time they are shopping. Consider what your packaging is saying about your product and your brand. Is it good? Can it be better? It’s also wise to think about what messages your product’s packaging is conveying to shoppers and consumers.

STAND A PART AS A LEADER IN YOUR CATEGORY When your brand is one in a sea of competing products, standing out on the shelf is of the utmost importance. Visual appeal plays a key role, but the packaging

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design itself can also set your brand apart. An elegant, durable, or convenient packaging design will stand out from the crowd, and by extension will make your brand seem like it, too, is on the cutting edge of innovation and design.

PACKAGING TO MATCH YOUR BRAND’S QUALITY AND RECOGNITION Subconsciously, consumers will associate the qualities of your brand’s packaging with the products themselves. Whatever your branding goals may be, CPP is committed to finding unique and creative packaging solutions that allow your brand to put its best foot forward. Don’t risk your brand’s image with packaging that misses the mark – contact CPP Insights at insights@creativeprintandpack.com for a consultation on your packaging needs.

Take a moment to think about some of your favourite brands. They all have one thing in common: they are memorable. Over the decades, brands like Coke have made minor changes to their packaging and stayed true to their original look. Keep in mind that recognizable brands should not change a thing because many successful brands that changed their logo, colours or packaging have seen a sort of backlash from shoppers after making a big change.

Consider eco-friendly options. Packaging that's recyclable or reusable is always a reason for a consumer to choose your brand over your competitor's. In fact, 52 percent of people around the world make purchase decisions partially due to packaging that shows a brand making a positive social and environmental impact. Remember, your product's packaging is meant to communicate a purpose: what your brand stands for and what it means for your customer. Don't miss this opportunity to create a lasting impression on the shelf and in the minds of your customers.

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The Complete Print and Packaging Guide

SCAN AND WATCH

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