Low-cost packaging supports competitive prices

24 Mar 2014

private label CVS

According to a report from Canadean, ambulance 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 markets.


Lightweighting and other innovations help keep down manufacturing costs

Manufacturers are under pressure to reduce costs and work with smaller budgets as consumers spend less. Lightweighting, buy 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 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.

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.


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 discounters and private labels, as they look to communicate quality at competitive prices.?

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