Forget ‘Horsegate’ – How to avoid ‘Packaging Gate’

Hughes said one of the worst hit retailers was Tesco which spent 30 years building its brand only for CEO, Philip Clarke to apologise to customers saying at the time ‘Trust is hard won and easily lost’.

'Packaging Gate'

“It will never be comfortable telling as many people as we can that our products have fallen short, that we are investigating how that happened and will show them what we find​,” he said.

The apology came as a reported £300m was wiped off Tesco's stock market value.

Speaking at the ProCarton/ECMA (European Carton Makers Association) conference in Sorrento, Italy, last week, Hughes discussed how to ‘turn global food and drink industry trends to your advantage’.

“Let’s make sure we don’t have a ‘Packaging Gate’ issue​,” he said.

“Shoppers today want to know much more where their food and packaging comes from - it ups the risk management in the food industry​.”

Speaking to guests he said key trends and concerns in packaging include contaminant migration assocaited with microwaving, print ink and growing concerns on green issues where the consumer wants more information and expects more to be done to protect the environment.

Less loyalty

In his presentation, Hughes said consumers were less trusting of government, industry, “Big” science, foreign sources of food and the speed of social media was both a blessing and a curse but, irrespective, a game changer in the industry.

“Consumers are becoming less loyal and in turn increasingly becoming a promiscuous shopper​,” he added.

“Emerging countries are catching up with the developed world and increased income. Climate events, natural disasters will increase and bring huge economic instability with a knock-on effect on our own emerging economies​.”

According to Hughes, the African population will increase from 1bn to 2bn in 2050 and Asia will double in the next 40 years, 4bn to 5bn but Europe will remain the same.  

“In the first six months of 2014, the UK saw year-on-year grocery sales decline across all supermarkets by 1.2% in value and 3.2% by volume – the biggest decline since The Second World War. The implications for the packaging and containers sector is margin pressure on your customers which is passed back onto the manufacturer​,” he said.

“China will eat a lot more packaged foods. But manufacturers will have to get the target audience right, for example, the first time Mondelēz launched Oreo cookies in China it was initially a failure but when it switched to a green tea flavor which was less sweet it was a great success​.”

In conclusion, Hughes added the decision on packaging should be an integral part of the new product development decision-making process.

“No packaging decisions are generally taken at the last minute with cost minimisation being the driver and product benefit enhancement an after-thought​,” he added.