Quarterly Packaging rePOrt

Quarter 2, 2014

Brought to you By

PACKAGING TRENDS IN

LATINAMERICA

INDuStry NEWS AND EVENtS

TRENDS AND DRIVERS IN PACKAGING

GREENING THESUPPLY CHAIN

2 Q2 2014

Packaging Technology Integrated Solutions provides strategic and operational expertise across the packaging value chain, that helps grow your business and position

your brand with maximum impact for people, planet, and profit. Our global reach and resources, category expertise,

and packaging supply chain analytics provide you withaccess to a suite of solutions developed and executed by

a team of experts, using proven methodologies to help you make a difference anywhere from idea to end-of-life.

www.ptisglobal.com

EuropEHAVI Global Solutions Germany GmbHSchifferstraße 16647059 DuisburgGermanyPhone: +49 (0) 203 7090 2600Fax: +49 (0) 203 7090 2790E-mail: info-europe@HaviGS.com

HAVI Global Solutions UK LTD3 Furzeground WayStockley ParkUxbridgeMiddlesexUB11 1EZUnited KingdomPhone: +44 (0)20 8606 3118Fax: +44 (0)20 8561 9850E-mail: info-europe@HaviGS.com

LAtIN AmErIcAHAVI Global Solutions Latin AmericaAv. Garcia del Rio 2477, 9 BBuenos Aires C1429DEAArgentinaPhone: +54 (11) 4519-0690Fax: +54 (11) 4519-0690 ext. 111

OFFICES

North AmErIcAHAVI Global Solutions USA (Chicago)

3500 Lacey Road, Suite 600Downers Grove, IL 60515United States of AmericaPhone: +1 (630) 493-7400

Fax: +1 (630) 493-7599 E-mail: haviglobalsolutions@HaviGS.com

ASIA-pAcIFIc mIDDLE EASt / AFrIcA

HAVI Global Solutions Singapore3A International Business Park

Tower B, #08-10/13ICON @ IBP

609935Singapore

Phone: +65 6895-2100Phone: +65 6895-2105

E-mail: info-asia@HaviGS.com

printed on recycled paper

www.havigs.com

Q2 2014 3

4 Packaging Inside and Out

8 Industry Insider: Packaging Trends in Latin America

10 A Greener Path: Greening the Supply Chain

12 Industry Insider: Packaging Drivers and Trends, Part 2

14 Industry Insider: Promotional Packaging

16 Ask the Expert

18 Trendspotting

19 Vantage Point: itsu New Cutlery Design Narrative

20 In the News

21 On the Road

22 Case Study Focus

23 Beyond Packaging

Quarter 2, 2014

coNtENtS

4 Q2 2014

pAckAgINg INSIDE AND out

Strategic Sourcing

Savings resulting from improved categorymanagement provides the highest rates of return.

Strategic sourcing is the first rung of the ladder. Once it’s combined with strategic supplier management and effective day-to-day purchasing activities, the outcome is true supply advantage.

Buyer interest in stand-alone procurement has fueled a 23% compound annual growth rate (CAGR) in a number of new deals over the last three years, making procurement outsourcing a $2B annual global market.

HFS Research, March 2012

Stand-alone procurement contracts include substantial focus on:

Multi-function and shared services contracts focus on:

The primary focus of CPOs (Chief Procurement Officers) and the value catalyst of this form of deal

STRATEGIC SOURCING

SUPPLIER RELATIONSHIP MANAGEMENT

A key discipline for leading edge companies to extract maximum value from their supply partners.

Provide opportunities to reduce

labor costs and provide global scale

ACCOUNTS PAYABLE AND TRANSACTIONAL PROCUREMENT

HFS Research, March 2012

Supply Advantage

Day-to-day Purchasing

Strategic Supplier Management

Strategic Sourcing

Q2 2014 5

Fast forward to strategic sourcing todayIn many companies, Strategic Sourcing, perhaps more than any other business function, has elements that are wedded to routine. However, overlooking the volatility in today’s marketplace, whether driven by economic and political disruptions, can negatively impact their supply of materials. This requires a higher level of Strategic Sourcing expertise, market knowledge, and long term planning. It also requires looking outside of their established networks of suppliers or sources. But many Strategic Sourcing managers’ skills and outlooks were formed 20 years ago in an era of relative stability and they haven’t changed. Now, however, no company can now allow Strategic Sourcing to lag behind other departments in acknowledging and adjusting to worldwide environmental and economic changes.

Purchasing Must Become Supply Management, Peter Krajlic, Harvard Business Review, September 1983

Key Procurement Processes

Strategic Sourcing

• Spend data management

• Client historical & future demand profile

• Demand management

• External marketplace analysis • Sourcing strategy

• Sourcing event management

• Proposal evaluation

• Negotiation

• Implementation

Procure to Pay

• Day-to-day tactical purchasing

• Asset management

• Procurement help desk

• Accounts payable

• Invoice/receipt match reconciliation

Supplier Relationship Management

• Supplier enablement

• Supplier help desk

• Supplier accreditation management

• SLA monitoring

• Vendor relationship management

Contract Management

• Contract repository

• Contract administration

• Contract template management

HFS Research, March 2012

environmenteconomypolitics

6 Q2 2014

Utilize Marketing InsightspAckAgINg INSIDE AND out

We like to keep our lens wide so we can capture stories and information that might seem unrelated, but are in fact relevant.

The future of proteinProteins are here to stay. According to the NPD Group, 78% of U.S. consumers believe that protein is part of a healthy diet, and more than half would like to increase their protein consumption.

Growth in global salesGlobal packaging sales are projected to grow 4% annually and reach $975B by 2018 according to research by Smithers Pira.

While about half are looking to meet their protein requirements from meat and fish, the other half is seeking non-meat protein options.

Consumers Craving More Protein Sources, www.qsrweb.com, 3/18/2014

The largest portion of global demand (40%) is expected from Asia due to the growth of the consumer class, along with increasing urbanization, development of retail chains, and growing healthcare and cosmetic sectors.

Revealing Key Trends Driving The Global Packaging Market, Jim Butschli, www.healthcarepackaging.com, 1/2/2014

40%

Q2 2014 7

Opportunity awaitsPackaging Matters 2014, a global research studyby MeadWestvaco, has found that consumersfind packaging important to their overall productsatisfaction. However, the research also reveals abig opportunity for packaging, with only 11%consumers reporting complete satisfaction.

Saving with corrugateWith reusable plastic containers (RPC) growing in popularity, the Corrugated Packaging Alliance (CPA) conducted an activity-based accounting study comparing RPCs to corrugated in shipping the same volume of tomatoes. The study demonstrated a 25% annual cost savings with the use of corrugated because of the additional costs associated with RPC backhaul trip requirements, handling at return distribution centers, and washing and cleaning. Corrugated containers are also recovered for recycling after use at retailer locations.

Study Compares Costs For Corrugated Versus RPCs For Shipping Tomatoes, Anne Marie Mohan, www.packworld.com, 10/29/2013

Plastic progressAccording to a new report, the EU recycled 34.7% of all of its plastic packaging waste in 2012, up from 33.6% in the previous year. For the 23rd consecutive year, in 2012 Americans increased the amount of HDPE bottles returned for recycling, a category that includes milk jugs, and bottles for household cleaners and detergents. U.S. gross recycling rates of PET bottles reached 30.8% in 2012, its highest rate yet. Bucking perceptions, even the recycling rates of post-industrial and post-consumer expanded polystyrene (foam) grew in 2012 to nearly 94MM lbs, representing a 31.4% increase.

EU Plastic Packaging Waste Recycling Rate Reached 34.7% In 2012, Waqas Qureshi, www.packagingnews.co.uk, 1/3/2014 Recycling Of HDPE Bottles Increases To 31.6%, www.plastopedia.in, 11/14/2013 US PET Recycling Rate Tops 30 Percent, Jeremy Carroll, www.plasticnews.com, 10/9/2013 Slow Rise In Recycling For EPS, Heather Caliendo, www.plasticstoday.com, 11/19/2013

Only 11% Of Consumers Completely Satisfied With Packaging, Jenni Spinner, www.foodproductiondaily.com, 2/12/2014

While in general packaging seems to do well on-the-shelf, it appears to fall short in terms of functional benefits. This suggests that brands have a major opportunity to increase loyalty and repeat purchases by making the packaging work harder for consumers after purchase.

41% consumers find packaging importantto their overall product satisfaction

60% consumers in countriessuch as India, Brazil and Turkey agree

11% consumers reporting complete satisfaction

Recycled plastic packaging waste in the EU

20122011

8 Q2 2014

Packaging Trends in Latin America

INDuStry INSIDEr

By Brian Wagner

VP consulting services, Packaging Technology Integrated Solutions

Lizbeth Ramirez

Director, packaging services, Latin America, Packaging Technology Integrated Solutions Services, Latin America

Q2 2014 9Q2 2014 9

Latin America is experiencing great growth. According to a report by the World Bank1, 34 percent of the population in Latin America is currently considered in the middle class,

and future projections predict by 2016 the middle class will be the largest segment for the first time ever. Additionally, economists predict that Latin America’s GDP will reach $514 trillion by 2025, led by Brazil, Argentina, Mexico and Columbia.

These changes have created a new consumer class with savings, access to credit and a greater demand for basic durables. While many new opportunities exist for companies producing and selling consumer products in Latin America, more and more international, regional and domestic brands are competing for local consumers, and packaging is proving to be a key differentiator.

consumers are Aspirational: Many Latin American consumers perceive well-known brands to be higher quality and consumers identify and recognize packaging design cues, such as a specific shaped container, unique material or known style of packaging. Brand owners must arm themselves with consumer insights custom-ized to the region in order to better understand what drives purchases beyond the convenience and upscale factors of packaging.

consumers are Brand conscious and Brand Loyal: The most brand loyal country is China, but Brazilians aren’t far behind, with middle class consumers willing to pay a little extra for their favorite brands and the perceived quality they provide. It is important for local shoppers to be able to identify with brands and design plays a key role—the look and feel of a package, its form and how it functions evoke emotional connections to the brand. New designs perceived to be out of place or incongruous with the brand will create disconnect.

consumers are traditional: The countries in Latin America have different traditions. This presents digital print and mass customization opportunities for brands looking to celebrate the unique cultures of each country. One such opportunity for local customization would be to focus on the beer brands that reign supreme in individual countries, such as Corona made in Mexico, Skol made in Brazil and Quilmes made in Argentina.

consumers are connected: Consumers increasingly rely on what they learn on the Internet to shape their buying decisions, and and this is true with Latin American consumers as well. This new decision-making instant is the “Zero Moment of Truth” and there may be stronger opportunities to leverage social marketing and utilize promotions on handheld devices.

consumers are Entrepreneurial: The challenge in Latin America is not finding new technology to address challenges—it is finding answers in existing or emerging technologies. It is important to tailor open innovation programs to fit specific needs by monitoring technologies that can work in select regions.

Consumers are Expecting Affordable Luxury: Across all categories, packaging is becoming central to the product’s value proposition—it does more than contain and protect contents—it communicates a brand message and a brand promise. As Latin American consumers are making conscious decisions to trade up, the packaging must reflect the brand promise of luxury at an affordable price. Brands can leverage package design to drive messages and attributes that help consumers believe they are making the right choice. Personal care and cosmetics brands have an especially big opportunity to capitalize on this trend.

consumers have Experienced urbanization: Consumers’ growing desire for freshness and absence of chemicals and preservatives from their foods is leading them to buy more fresh products with simpler packaging, like loose fruits and vegetables that do not require packaging. Also, as consumers become more urban, they are taking public transportation and living in apartments or smaller homes so the size and portability of packaging becomes important. New channel growth, such as vending, is also playing a role. However, infrastructure challenges with distribution and transport exist. Companies should explore new opportunities around package sizes that can be transported and stored in homes.

From first impression to lasting impression—from getting noticed to creating long-term loyalty—packaging must address a wide range of consumer needs, demands, and expectations. Packaging is an essential part of the consumer experience and an integral component of product value. In Latin America, brand owners and packaging manufacturers who recognize these trends and respond accordingly will gain a competitive advantage.

Article derived from a presentation delivered by Brian Wagner at The Packaging Conference, February, 2014.

i http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/02/24/000350881_20140224141401/Rendered/PDF/851620WP0Box380LB0Social0Gains02014.pdf

Seven significant consumer trends shaping the packaging agendas in Latin America:

10 Q2 2014

A grEENEr pAth

Recycling waste, reducing use of natural resources and reusing materials when possible are all excellent

ways organizations can help minimize impacts on the environment. Organizations looking to make significant systemic progress in meeting their sustainability goals would do well to also focus on optimizing their supply chains. The most effective supply chains are green supply chains because they not only lead to improved revenue and margin, they help reduce waste and curb capital investment needs for manufacturing and warehousing capacity. By increasing visibility, improving planning and forecasting and balancing transportation mode selection with inventory targets, organizations can drive efficiencies in their supply chains and shrink their environmental footprints.

Visibility into the supply chain means knowing where an item is both within and beyond an organization. It also means being able to follow that item at every echelon along the supply chain, from manufacturer to warehouse, to distribution center through to individual store or restaurant location. Visibility at this granular level removes risk and makes it possible to guarantee supply. Fear of the unknown, of the stock-out that might happen because an item could be missing or a truckload may not arrive, is replaced with information that begets confidence. Organizations are able to act boldly, forgoing investments in extra safety stock to protect themselves from the risk of the unknown because they know what is next and can anticipate and plan based on the reality they are able to see. Because it is no longer necessary to purchase or store large

quantities of raw materials or finished goods “just in case,” warehouse space is minimized and environmental benefits—in the form of reduced energy and water usage as well as carbon output—are realized.

Effectively forecasting demand and the planning of sourcing, procurement, conversion, transportation, and logisitcs with suppliers, channel partners, customers and other intermediaries along the supply chain allows for efficient pre-build and phase-out strategies that support product launches and limited time offer (LTO) promotions. By accurately anticipating demand and sharing that view across the supply chain, organizations can work to build the right amount of inventory and place it in the right locations at the right times. The likelihood of unforeseen demand and the bullwhip

Greening the Supply Chain

By Eric Pfeiffer

senior director, supply chain integration, HAVI Global Solutions, LLC

Q2 2014 11

effect it can produce along the supply chain is significantly reduced. The possibility of contingency manufacturing and need for surge production capacity are also minimized. Consider a quick-service restaurant running a LTO promotion that failed to effectively forecast demand or design a contingency plan and now must order a small production run of product to assure supply in stores and maintain customer service levels. In addition to proving costly, the run also is environmentally burdensome since it requires brick and mortar investment and (likely less efficient) energy use.

Creating inventory targets that allow for the selection of transportation modes that enable more efficient movement of product and are less costly is another way to green the supply chain. A truckload, for

Greening the Supply Chain

instance, often is utilized where more sustainable rail or inter-model would be feasible. The reason? Rail lead times are not as reliable as truckload lead times. So the challenge is managing that variability with an effective inventory policy. Because shipments traveling by rail could be delayed, having safety stocks (yes, in this instance, maintaining safety stock is encouraged!) afford supply chain partners confidence they will have the product they need, when they need it. While maintaining safety stock in this instance may seem contradictory to greening the supply chain, the efficiency gained and environmental benefits—less diesel fuel used and greenhouse gases released—achieved by using more variable transportation modes typically offset the negative impact of stock levels. In a similar way,

manipulating inventory schedules by holding inventory at upstream nodes until needed downstream helps green supply chains by reducing the potential of reverse logistics and product obsolescence at retail locations. This is especially important for limited duration items where there is more demand uncertainty and less predictability of forecast.

Organizations committed to environmental stewardship and looking to make significant headway in meeting their sustainability goals ought to closely analyze their supply chains and work toward greater efficiency. Greening the supply chain can achieve significant ecological gains that are also good for the bottom line.

12 Q2 201412 Q2 2014

Packaging Drivers and Trends, Part 2

INDuStry INSIDEr

In the last issue of Quarterly Packaging Report, we highlighted three of the eight key drivers that influence packaging trends. We focused on those most related to and shaped by consumer behavior and demographics – emerging markets, retail, and social media, and personal technology. In this article, we will examine the remaining five stimuli that prompt

visionary thinking and drive innovation in packaging materials, designs and technologies. They are the motivation for today’s trends in packaging as well as those yet to come.

ByJocelyne Ehret

Director, Packaging Technology Integrated Solutions

4 holistic Design The primary role of packaging is to protect product, but as

technology advances and consumers become more discerning, a packaging’s design has become as important as its function. Holistic Packaging by Design™ combines brand image and the emotional and experiential side of packaging with its technical and operational side, and this is spurring innovation across product categories. Consider featuring raised ink textures on a can’s exterior that resemble the look and feel of a football. The cans are not only aesthetically pleasing and reminiscent of a favorite American pastime; they are functional too, affording consumers a better grip regardless of whether the can is wet or dry. Similarly, packaging manufacturer Crown Closures considered function and universal design when it developed Orbit™ Closure, a revolutionary closure that is easy for consumers of all ages to open. The unique design also helps brands stand out on grocery store shelves.

Q2 2014 13Q2 2014 13

5 Sustainability While not a new stimulus, sustainability has

certainly evolved as a driver. Where brand owners, packaging manufacturers and consumers were once focused on reusing materials, reducing waste and increasing use of product concentrates and refillables, today’s trends are focused on big systems. There is greater emphasis on achieving zero waste, composting—both at the consumer and the industrial level—leveraging bio-based materials and efficiently generating energy from waste. Consumer and manufacturer interest in sustainability and reducing food waste has driven recent innovations in food packaging such as re-seal functionality and individually wrapped portions. This reduces waste which, according to the UN Food and Agriculture Organization, “emits the equivalent of about 3.3 billion metric tons of greenhouse gases” each year.i

6 Laws and regulations Legislation, whether enacted or anticipated,

has long been a driver impacting package selection and inspiring advances in packaging materials and processes. In France, the government has banned the use of Bisphenol A (BPA) in all food packaging by 2015, prompting brand owners and packaging manufacturers to find safer alternatives. Germany’s consideration of a national proposal that would limit mineral oil migration from paper and board packaging into foods has led to creation of new barrier materials. In the same way, EU 1169/2011, the directive slated to take effect in late 2014 that will standardize food labeling and require food manufacturers to provide consumers with more nutritional and sourcing information,ii is challenging package designers to find ways to incorporate this additional information on labels and packaging to ensure compliance with the law.

7 Science and technology Advances in science and technology spur

trends in packaging – both functional and fun. New barrier materials that coat disposable cups and plates, for instance, are now as effective and affordable as traditional plastic coatings but significantly more sustainable and easier to recycle. The intelligent packaging trend is another that was born from science and technology developments. Examples include modified atmosphere packaging to prolong the shelf life of meats and produce as well as color-changing technology on packaging and labels to indicate the freshness of foods. Both help consumers avoid wasting food that is still fresh despite the date indicated on a “best when used by” stamp and, conversely, avoid illness from ingestion of foods or medicines that have spoiled before their anticipated expiration dates. Mass customization, such as Coca-Cola’s 2013 promotion in Great Britain affording consumers personalized bottles of Coke, is another trend with its roots in technological advancement.

8 Anticipatory Issues The future is not entirely unknown. By

monitoring local and global developments in Business, industry and the environment while tracking consumer attitudes and sentiment through social media, it is possible to anticipate emerging issues, if not get ahead of them. We found that in every instance, the most prepared organizations have a formal process in place for gathering and processing information and insights. Behind every packaging trend is an impetus that sparked it—whether an advancement in technology, a new law, a more holistic approach to design or a greater interest in preserving the environment. The challenge for brands and packaging manufacturers is not in adapting to trends once they are born, but in anticipating and inspiring their creation through observation and visionary thinking.

i “Global food waste emits more greenhouse gases than most countries, according to the UN.” ThinkProgress.org, 9/11/13, http://thinkprogress.org/climate/2013/09/11/2604811/food-waste-report/ ii European Commission. http://ec.europa.eu/food/food/labellingnutrition/foodlabelling/proposed_legislation_en.htm

Behind every packaging trend is an impetus that sparked it – whether an advancement in technology, a new law, a more holistic approach to design or a greater interest in preserving the environment.

We recently conducted a study to determine how companies across the packaging value chain, from suppliers and converters to brand owners and retailers, get in front of emergent issues.

14 Q2 2014

Promotional Packaging

INDuStry INSIDEr

By Robert Cappalli

Senior vice president, client services, Packaging Technology Integrated Solutions

Increasingly, brands are incorporating promotions and limited time offers as part of their marketing strategies, and packaging is integral to the success of these undertakings. Sometimes the promotion is the packaging itself, as was the case when Coca-Cola offered consumers in Great Britain personalized bottles of Coke or when Miller Lite debuted cans with raised printed ink that looks and feels like a football while also affording consumers a better grip. Build the busi-

Q2 2014 15Q2 2014 15

Build the business case for value-added and promotional packaging. Yours may be a clever

idea that garners media attention and attracts consumers, but if it does not increase baseline sales or deliver return on investment, it is not the right approach. Any marketing tactic—whether it is promotional packaging or a giveaway—should positively impact the brand. If it doesn’t or likely won’t, it is not worth pursuing. Bottom line: Do your due diligence and prove the business case first.

understand your distribution channels. Consider their unique marketing strategies for

promotions and plan accordingly. For example, a big box retailer may require wany new product it carries—from hand soap and toothpaste to pasta and cake mix—feature promotional packaging suitable for display on aisle end-caps while a liquor store may only feature promotions and gift boxes that target specific consumer demographics during select months of the year (e.g., dads and graduates in June and Super Bowl fans in February). Also consider how your promotion will affect the store from an operations perspective. Will backroom storage be impacted? Will the packaging fit on store shelves? Are there customer service considerations? In the case of a frequency card on a coffee cup, for instance, will employees need to be briefed on how the promotion works so they can answer customers’ questions and fulfill redemptions? Who will manage this? It is crucial that you select retail outlets that will maximize the promotion and have systems in place to handle value-added packaging.

consider the end customer. Does the promotion add value for the consumer? Does

it align with or help differentiate the brand? Does it respond to a consumer need, or does it confuse consumers and dilute the brand? A home improvement store that offers a branded moving supplies kit complete with packing materials is meeting the specific needs of consumers in the process of moving. Similarly, BBQ sauce bundled with grilling utensils is a logical pairing of brands and likely to be perceived as useful to

consumers while also promoting a positive outdoor cooking experience. And, sometimes a promotion can simply be fun. Soda in vintage glass bottles, for instance, may not be any more flavorful or convenient than soda in aluminum cans or plastic bottles, but the retro packaging affords a sense of whimsy and nostalgia and may evoke happy memories for consumers. Avoid packaging and promotions that are confusing or incongruous with the product or brand and that could potentially damage consumers’ perception of the brand.

Don’t overlook the importance of quality creative. Successful creative packaging is

attractive, brand-building and functional. Consider, for instance, London-based Nusa Kitchens’ innovative soup wrapsi. The company offered heat-resistant cardboard sleeves designed to look like cozy knitted sweaters that could slide over its to-go soup containers as part of a 12-week promotional campaign. The creative wrappers were eye catching (leading to increased sales) and functional and also aligned with the brand’s association with homemade quality. Just as brands should build the business case for value-added and promotional packaging, they ought to ensure the quality and value of their creative. An eye-catching package that is not functional or aligned with the language of the brand will not deliver return on investment and could potentially confuse consumers or negatively impact the brand.

Assess the impact on the brand manufacturer and supply chain. What are the production

implications of combining an NFL branded t-shirt or drinking glass with a 2-liter bottle of soda? Is equipment along the supply chain able to accommodate this promotion? How will shipping, distribution and warehousing be affected? Consider the costs of the promotion and how it will be marketed, as well as the distribution channel and sourcing strategies. Is there a less expensive plastic or glass that would work as well? Does it make sense to consider a contract manufacturer?

Another consideration that cuts across all of the above is sustainability. What are the sustainability requirements of the brand—baseline and aspirational—as well as its channel partners and customers? Ensure promotions align with sustainability expectations and meet all related targets.

Considered carefully, introduced thoughtfully and executed strategically, promotional and value-added packaging campaigns can boost sales and increase brand awareness and loyalty.

There are five key areas of consideration brands ought to examine if they are thinking about including promotional packaging in their overall marketing strategy:

1

2

3

4

5

i http://www.thedieline.com/blog/2008/3/31/warming-little-things.html

16 Q2 2014

An InteRvIew wIth Dr. Juanita Day SenIoR MAnAgeR – SuStAInAbLe SuPPLy ChAIn, ASIA-PACIfIC MIddLe eASt & AfRICA

ASk thE ExpErt

Sustainable businesses not only reward shareholders or owners, they have the ability to provide innovative products and services, reduce natural resource dependence and pollution and contribute to enhanced energy and food security worldwide.

tell me about yourself. I have more than 20 years of experience in the packaging industry working for packaging manufacturers in a number of countries, mainly in product, process and strategy development roles. I have led the development and implementation of sustainability platforms, consulting to brand owners globally. My academic background includes a double major Bachelor’s degree with Chemistry and Mathematics, a MBA specializing in Technology Management, a Master’s degree in Polymer Science and a Ph.D. in Change Management.

Why is Sustainability important to our industry?Sustainability is important in our industry and every industry that wants to be successful in the future. Sustainability involves considering the long-term consequences of industry and manufacturing. Economic sustainability involves developing long-lasting systems of trade, while ensuring that these systems have a lesser impact on the

environment than previous methods. Corporate sustainability also focuses on the environmental and social impact of business actions.

The economic, social and environmental challenges facing businesses today are unlike any that organizations faced in the past. Governments are legislating to protect the environment as well as to ensure food safety for their voters who, in turn, are becoming more and more educated about the products they consume and their impact. The products in our industry

carry the names of very large brands that want to be seen as trustworthy, upstanding businesses, with a corporate social and environmental conscience.

Sustainable business processes provide a foundation for businesses’ success in this climate. Its techniques enable organizations to be profitable while, at the exact same time, helping people and the environment, resolve tenacious social problems. At first it seems counterintuitive: doesn’t going out of the way to respect people

and planet make it more difficult to profit? The truth is actually the opposite. Companies that invest in sustainability are the ones that can effectively weather resource constraints. They are the ones that survive market head-winds because consumers and employees are committed to remaining with companies they feel match their values.

One of the most important roles packaging plays is the prevention of food loss and waste. Food loss and waste has many negative

Q2 2014 17

Sustainability is not the role of one or two individuals in a company. Every single employee has an important role to play in creating a sustainable business.

economic, social and environmental impacts. Economically, these represent a wasted investment that can reduce farmers’ incomes and increase consumers’ expenses. Environmentally, food loss and waste inflict a host of impacts, including unnecessary greenhouse gas emissions and inefficiently used water and land, which in turn can lead to diminished natural ecosystems and the services they provide.

Sustainable businesses not only reward shareholders or owners, they have the ability to provide innovative products and services, reduce natural resource dependence and pollution and contribute to enhanced energy and food security worldwide.

What is unique about managing Sustainability in the Asia-pacific, middle East and Africa (ApmEA) region?The APMEA region faces a number of challenges. Not all of these challenges are unique to this region, however, APMEA is very fragmented and spread over a very large geographic area. For HGS, it comprises 38 countries, with multiple languages, dialects, cultures, beliefs and levels of socio-economic development. All of the different countries are developing regulations and legislation on a national, regional and even municipal level. It is a challenge to manage compliance to all the diverse requirements, as there is no harmonization. The different laws, combined with different import/export restrictions and costs provide additional challenges to an already complex supply chain.

There are rising societal tensions and widening income disparities in

the Middle East and North Africa and a rapidly expanding middle class in Asia combined with the growing importance of megacities. The explosion of Asia’s middle class is remarkable. The size of this group

currently stands at 500 million and will grow to 1.75 billion by 2020 – more than a threefold increase in just seven years. The world has never seen anything like this before; it’s probably one of the biggest socio-economic shifts in history. It is a privilege for me to manage sustainability for HGS in APMEA because managing sustainability promotes accountability and transparency while addressing the needs of the developing nations in the region, without compromising the environment they operate in. It focuses not only on rewarding business shareholders and owners, but also on protecting consumers of our products and the local indigenous communities and the ecosystems they rely on. What do you see as the top three emerging trends in Sustainability in the Asia-pacific, middle East and Africa region?In addition to the trends of the growing, increasingly savvy middle class and urbanization I mentioned

previously, there is an increased opposition to negative environmental impacts like deforestation and air pollution, increased population growth and an increased focus on food safety and security. This

region also suffers from the worst consequences of climate change in terms of severe weather events like droughts and floods.

This creates not only operational and physical risks, but also reputational risks for non-compliance to local regulations and legislation.

What are the biggest challenges in managing those emerging trends?Fragmentation, complexity and diversity remain the biggest challenges. The balance in making judgments in developing markets can be challenging as well, especially when compared to a Western cultural framework. There are no one-size-fits-all solutions in APMEA.

Is there anything else you’d like to say about your experience or the work you do?I would like to add that sustainability is not the role of one or two individuals in a company. Every single employee has an important role to play in creating a sustainable business.

18 Q2 2014

trENDSpottINg

Packaging Healthfulness

the number of consumers committed to improving their health by adopting healthy eating habits has increased in the last couple of years. This is translating into more shoppers looking to find conveniently packaged wholesome foods and beverages, in particular natural fruits, vegetables, and grains.

From the eyes of the consumer at the grocery aisle, this means delivering packaging design that considers the “healthfulness” of food and beverage products. Smart companies are answering the call with packaging that describes the nutritional value, saves time, and makes healthy living easier.

Translating healthfulness through packaging design is about clearly showcasing and catching consumers’ attention about the quality and freshness of the food, and emphasizing its specific nutritional value. It is about authenticity through simple and trusted dietary quality messaging.

Naturally fresh: fresh juiceNothing is better than freshly squeezed orange juice from your local grocery store’s produce department. The clear container showcases the real authentic juice while visually displaying the fiber content and pulp. No preservatives or added sugars. Just real juice. The label generally includes the time and date it was made, as well as any additional required information.

Visual authenticity: Nature’s Earthly choice Seeing is believing. A well thought out color-blocked design creates a visual window to the contents, delivering a strong healthfulness message—striking a balance between the packaging material and the execution of the graphics. The design connects with the consumer showcasing the authenticity and quality of the food, emphasized by simple messaging of the ingredients and their specific nutritional value. This combination is seen across different product platforms in pre-cooked and uncooked grains, and snacks.

true life photography: Way Better SnacksThese products use an unexpected design execution

that tells a story of real and wholesome food, tagged along with its health benefits. Clearly

white and bare backgrounds are the ultimate expression of simplicity and

clarity of a healthfulness message that elevates the perception of the hero ingredient(s). It takes the guesswork out of eating healthfully. kraft/un-bleached packaging materials:

Stahlbush Island FarmsThis material finish is here to

stay. Not only is kraft/un-bleached material a sustainable selection,

consumers have also elevated its perception to delivering a message of hand-crafted

and high quality wholesome food, prepared with care, that appreciates the geographic origin of the food. In addition, handwritten and carefully “untidy” fonts address the consumer in a friendly and authentic tone.

Q2 2014 19

Today, the shop’s branded smoky grey spoon is ergonomic, sleek and represents a unique blend of European and Japanese style that complements the brand’s Bento boxes and soup cups. The spork mirrors this style in the brand’s whimsical signature color and features the small fork tines necessary to facilitate eating slippery noodles.

To ensure consistency of the look and feel of the brand’s cutlery, our team also developed a fork and knife. Similar to the spoon and spork, both are sleek in design,

ergonomic and reflective of the brand’s blended European and Japanese style. Both are produced in the brand’s signature color. The family of cutlery has become a core part of the brand’s identity and elevates and differentiates the brand among a field of competitors that use stock items.

Consumer response to the new utensils—in terms of design and functionality—has been positive, with favorable reviews reported in shops and on social media sites.

when the founder of itsu, a UK-based chain of Japanese fast-casual shops and restaurants, approached us with the rough sketch of a sleek new spoon he

was envisioning to replace the tired, pedestrian black plastic spoon his customers were using, our design team jumped at the chance to help. He needed something fresh that would align with the qualities of the brand, complement the design of his food packaging and appeal to his customers. In addition to his sketch, the founder proposed that the new spoon should be 70 percent European and 30 percent Japanese in style. The color should be semi-transparent, smoky and possibly grey.

Our team set to work evaluating similar utensils in European cafes and Japanese sushi and noodle shops and assessing industry offerings to determine the feasibility of stock items. We designed samples based on his direction and our own research and analysis, while working with potential suppliers to balance cost and manufacturing realities. We had several design iterations and created multiple concept spoons to ensure every detail of the design was as perfect as it could be, tweaking and refining as we went so that we met each of the client’s specific requests and exceeded his expectations.

Meanwhile, the brand was growing and placing more emphasis on hot food, specifically Udon noodles. The generic black plastic spoons itsu had been using were not only boring, they made eating the shop’s signature soups and new noodle offerings challenging for customers. Our team developed a hybrid spoon-fork, or “spork,” for the brand in its signature color using the same style lines as the spoon.

Our team developed a hybrid spoon-fork, or “spork,” for the brand in its signature color using the same style lines as the spoon.

itsu New Cutlery Design Narrative

VANtAgE poINt

20 Q2 2014

In the NewsBuLLEtIN

A Debut with Swag, package DesignAPRIL 2014

Lisa Baer, Senior director, marketing innovation, Packaging Technology Integrated Solutions, offers her expert opinion on new packaging design from Korean grooming brand Swagger. E VISIT OUR WEBSITE TO LEARN MORE

A taste of the Future, packaging todayAPRIL 2014

Jocelyne Ehret, Director, Packaging Technology Integrated Solutions, tells Packaging Today what she believes are the immediate challenges and opportunities facing food packaging. Jocelyne answers questions around innovative packaging, the relationship between legislation and innovation, future trends shaping the industry, opportunities for sustainability, and more.E VISIT OUR WEBSITE TO LEARN MORE

Speak to your Shoppers, StoreBrandsAPRIL 2014

Jill Ahern, Senior director, consulting services, Packaging Technology Integrated Solutions, comments on the importance of packaging in building store brands, noting that packaging design and function should not only align with shoppers’ needs but also reinforce the brand’s promise. (Page 25)E VISIT OUR WEBSITE TO LEARN MORE

Food manufacturers rethink Flexible packaging, Food processingAPRIL 2014

Mike Richmond, Vice president, Packaging Technology Integrated Solutions, shares insights on the future of flexible packaging and provides commentary on the functionality, package design, and features of new products in the industry. Additionally, in a separate side-bar piece on sustainability, Mike discusses the environmental benefits of flexible packaging. E VISIT OUR WEBSITE TO LEARN MORE

keep it Simple, Store BrandsMAy 2014

Jill Ahern, Senior director, consulting services, Packaging Technology Integrated Solutions, comments on creating packaging for health and wellness related store brands, urging retailers not to go overboard on claims and callouts as images and overall design are more critical in making that immediate connection with the shopper in the store. She says another important consideration is universal design. (Page 29)E VISIT OUR WEBSITE TO LEARN MORE

the Eight Drivers of today’s packaging trends, packaging World June 2014

Jocelyne Ehret, Director, Packaging Technology Integrated Solutions, Europe, speaks with Packaging World’s Anne Marie Mohan about what influences packaging. Jocelyne explains the eight global drivers guiding the trends in today’s packaging that brand owners need to know in order to develop actionable insights for packaging. E VISIT OUR WEBSITE TO LEARN MORE

Verpackungen nachhaltig optimierenMARCh 2014

Jocelyne Ehret, Director, Packaging Technology Integrated Solutions, speaks with Packaging Journal about the vital role packaging plays in reducing food waste and how food packaging is becoming increasingly sustainable. The challenge for brand owners and packagers in Germany and around the world is to achieve balance between the functional and ecological impact of packaging (since minimal, ineffective packaging that leaves food vulnerable to waste is as detrimental to our ecosystem as excessive, synthetically-based packaging that cannot be reused or recycled). E VISIT OUR WEBSITE TO LEARN MORE

A Versatile performer, StoreBrands MARCh 2014

Michael Richmond, Vice president, and Jill Ahern, Senior director, consulting services, Packaging Technology Integrated Solutions, comment on the technical advances that are extending flexible packaging’s uses and capabilities, particularly for store brands. E VISIT OUR WEBSITE TO LEARN MORE

Q2 2014 21

On the RoadpAck Expo International 2014 MCCoRMICk PLACe ChICAgo, IL

noveMbeR 2-5, 2014

PACK EXPO International is the largest, most comprehensive trade show for the processing and packaging industries. It’s where end users from packaged goods companies of all kinds look for the latest, most innovative equipment and materials for improving production efficiencies along the entire supply chain and shelf impact at the store. Packaging Technology Integrated Solutions will be exhibiting in booth E8901.E VISIT OUR WEBSITE TO LEARN MORE

using a multisensory Approach to packaging, Brand packagingMARCh 2014

Journalist Laura Zielinski talks with Jill Ahern, Senior director, consulting services, Packaging Technology Integrated Solutions, about the importance of taking a multisensory approach to package design and development. In the interview, Jill addresses issues like how multi-sensory packaging can help brands connect with their consumer in an age of showrooming and online shopping and the part senses play in purchase decisions, and how packaging may not be living up to its greatest potential for both consumers and brands.E VISIT OUR WEBSITE TO LEARN MORE

the Dieline opinion Series: “I wish they would just tell us what they want!”, DielineMARCh 2014

Jill Ahern, Senior director, consulting services, Packaging Technology Integrated Solutions, talks about packaging design as the inherent tension that spews forth from the intersection of art and science. Jill emphasizes the importance of understanding how packaging design can be as important as an ad campaign in defining the consumer experience and establishing loyalty. When we strike the right balance between form, function and brand alignment, it gets us closer to what consumers really want.E VISIT OUR WEBSITE TO LEARN MORE

common myths related to packaging, manufacturing today EuropeMARCh 2014

Jocelyne Ehret, Director, Packaging Technology Integrated Solutions, talks to Manufacturing Today Europe about the three common myths related to packaging that perpetuate confusion and misunderstanding of packaging’s primary function.E VISIT OUR WEBSITE TO LEARN MORE

high-protein products: the New American Superstars, packaging WorldMARCh 2014

Lisa Baer, Senior director, market innovation, Packaging Technology Integrated Solutions, describes the growth of the high-protein product category and how a holistic approach to packaging can be leveraged to set your product apart in a crowded marketplace.E VISIT OUR WEBSITE TO LEARN MORE

22 Q2 2014

SoLutIoNOur consulting team offered a fresh approach and new insights based on their experience working across the packaging value chain and industry categories, as well as their relationship with CPG brand owners and leading retailers.

The consultants met with the supplier to review its current product spectrum, learn more about the new technology and gather additional information about the client’s proposed investment, manufacturing capabilities and processes, as well as its existing markets and past experience with new market development. They also worked with the client to determine the type of companies it would most like to tap for insights about perceived value of the technology and its applicability.

chALLENgEA Fortune 100 packaging supplier acquired a patented technology with several potential applications; however, the start-up investment required to manufacture and commercialize the technology was very high. The supplier needed to manage its risk in bringing the new technology to market and sought insight on how potential customers would perceive its value and apply it to their business needs. The supplier wanted to identify, quantify and prioritize all the potential applications and non-traditional uses of the technology and incorporate that information into its global business plan and launch strategy.

oVErVIEWA packaging supplier needed help to manage its risk in bringing a new technology to market.

Market and customer research confirms global demand for new technology

cASE StuDy FocuS

Q2 2014 23

The consultants asked questions that helped quantify the value of the supplier’s technology and identify opportunities to apply or extend it among prospective customers.

The team from Packaging Technology Integrated Solutions started with secondary research and preliminary thought leader interviews. They were then able to interview decision makers at target organizations across a variety of industry sectors, maintaining the anonymity of its client. The consultants asked questions that helped quantify the value of the supplier’s technology and identify opportunities to apply or extend it among prospective customers.

The consultants analyzed data from the interviews and from Packaging Technology Integrated Solutions’ proprietary research and trends databases to develop and prioritize market opportunities for the supplier. They also identified industry challenges, emerging technologies and unmet needs that aligned with the supplier’s capabilities and business structure. Additionally, the consultants conducted a market change cycle analysis to identify mature, evolving and start-up industries that supported the client’s business and technology model.

The team incorporated the results of their primary and secondary research plus actionable recommendations into a preliminary business plan and market introduction strategy.

Packaging Technology Integrated Solutions is a division of HAVI Global Solutions (HGS). In this section, we share information we think might be helpful to you from other areas of our business - beyond our Packaging work.

Beyond Packaging

New MarketInsightsIn May, HGS launched a new version of its popular MarketInsights publication. In the publication, now issued monthly, we keep our fingers on the pulse of the industry by exploring trends and innovations that have impact on the businesses of our customers across the globe. In the first edition we focus on restaurant industry & menu trends, analytics applications that help food-service, packaging trends & innovations, the benefits of corrugated, optimization of inventory, and the rise of recycling rates across the board. E VISIT OUR WEBSITE TO LEARN MORE

HGS experts discuss the impact of the growing middle class on the food supply chain in Food LogisticsFeeding the Growing Global Middle Class without Starving the Supply Chain, April 2014HGS’ Kate Schoell, Director, global promotions and logistics, and Brian Benjamin, Senior director, strategic account management, analytics & supply chain services, address the increased demand in food that the growing global middle class has on the food supply chain. They outline key methods that are needed to effectively manage and avoid obstacles that can occur as a result of this increase in demand, and provide solutions to navigate it.E VISIT OUR WEBSITE TO LEARN MORE

Grocery Headquarters features HGS’s Recycling & Waste Solutions President Anthony DiIennoTalking Shop with ... Anthony DiIenno, April 2014 Anthony Dilenno, president of HAVI Global Solutions Recycling & Waste Solutions, says that trash should be viewed as a resource, not waste. In this Q&A piece, Anthony discusses waste and recycling opportunities for retailers and grocery stores. E VISIT OUR WEBSITE TO LEARN MORE

coNFIrmED mArkEt INtErESt The packaging supplier successfully managed the risk associated with bringing a new technology to market by identifying the technology’s potential applications and quantifying its perceived value among prospective customers.

IDENtIFIED SpEcIFIc mArkEt opportuNItIES - The team assessed consumer, market and channel trends, as well as survey data, to develop and prioritize the market opportunities for the supplier, including estimated market size, potential customers, synergies with existing technologies and barriers to entry.

DELIVErED A BuSINESS pLANThe team helped the packaging supplier develop a global business case and market introduction strategy for its technology that included key industry contacts as well as suggested messaging and positioning.

BENEFItS

www.havigs.comwww.ptisglobal.com

printed on recycled paper