The Fourth Age of PackagingWritten by Mike Webster 01 May 2020
We are in a time of unprecedented change.
The world is converging and barriers blurring. Technology is changing the way we perceive, engage and consume the things that surround us. We are displaying new attitudes, behaviours and expectations causing our relationship with brands to constantly evolve. Most pressing of all, climate change threatens our very existence and is driving the demand for more responsible approaches to how we live our lives.
According to David Galbraith in ‘Our world in flow change’, we are witnessing something as profound as the shift from agricultural to industrial society.
The core driver of this change is technology.
From the very first ‘knife’ made from a broken, jagged rock to the complex science and engineering underpinning the Hadron Collider and our attempts to unlock the secrets of the universe, we have created technology to empower, protect and ultimately advance ourselves.
There have been many technological advances in our history, each one heralding a new era for civilisation. Today we are in the midst of what is commonly referred to as the Fourth Industrial Revolution, and the convergence of the physical world with the virtual world through the deployment of the twin digital and ICT (information and communications technology) technologies.
It began with the launch of the first microprocessor chip by Intel in 1971. Since then the application of ICT has grown at such a rate that nearly every aspect of our lives has been impacted or in the process of being so. The way we communicate, the way we work, the way we travel, the way we express ourselves, the way we experience things and now, the way we consume things.
This is only the beginning. The true potential of this technology has yet to be realised. This technological revolution is following the same evolutionary pattern as those that preceded it according to economist Carlota Peres:
"In the history of technological revolutions, there is a moment
in each revolutionary surge of development when the wild period of Schumpeterian creative destruction has collapsed, and the future promised by the new technologies looks both uncertain and threatening.
We are at this juncture today. Ten years after the 2007-08 crash, tenuously out of the subsequent recession, we face the point in the cycle when something must occur to foster investment, employment and innovation.
The saviour in the past has been demand and an important source of that demand has often been a change in lifestyle: a new aspirational ‘good life’, underpinned by the new technologies."
For Fast Moving Consumer Goods (FMCG) companies, this will mean radical transformation, the likes of which has not been seen before. Packaging in particular will be disrupted and reimagined in a new light that will challenge the very semantics of the name. We call this packaging’s Fourth Age, or The Exceptional Age, when the current packaging paradigm of standardisation and commoditisation is replaced by one of fast materiality, mass customisation, smart adaptability and systemised sustainability.
Although still nascent, we have seen signs of its emergence, some of which have been shared by fellow contributors in this edition of Cue magazine. Furthermore, some of these signs are being catalysed by the Covid-19 pandemic engulfing the world.
The progression of packaging’s first three ages was cumulative; rather than disappearing with the emergence of the next, the needs of each age were carried forward.
Pack 1.0: The Functional Age
This age was driven by the replacement of local craft production by mass manufacture and wide distribution of goods. The focus of this age was efficient standardisation, structural reliability in safe transportation of goods and base recognition of the brand by shoppers in retail. This could be described as The Functional Age and spanned the late 1800s to the 1940s.
Pack 2.0: The Promotional Age
This age was driven by the proliferation of brands, extended product ranges, the growing strength of own label and the rising cost of mass media advertising. The focus of this age was driving awareness, facilitating range navigation and above all to compete for preference on-shelf. This could be described as The Promotional Age and spanned the 1950s to the 2000s.
Pack 3.0: The Experiential Age
This age was driven by the continuing slow growth, marginal product differentiation, low consumer loyalty and increasing concern about the environmental impact of packaging. The focus was on building deeper engagement between brand and consumer, more rewarding experience and nascent acknowledgement of the need to reduce harmful impacts. This could be described as The Experiential Age and spanned the early 2000s to today.
Pack 4.0: The Exceptional Age
Four key thrusts are accelerating and converging to usher in The Fourth Age:
- The rise of conscious consumption
- The shift from sustainable mindset to sustainable behaviour
- The increasing need for market agility
- The mass adoption of Industry 4.0
The rise of conscious consumption
We are reaching a tipping point in our mainstream consumption behaviour.
The steady rise in consumption over the past seventy years has culminated in a culture of fast disposability, where the products we buy, including the packaging, are used and discarded without much thought as to the consequences. Terms such as ‘planned obsolescence’ (consumer appliances and devices), ‘fast fashion’ (fashion and accessories) and ‘branded pollution’ (FMCG) have become part of the lexicon of this unsustainable culture.
It began in The Promotional Age when choice was more limited and consumers accepted what was being offered to them. Packaging design was used to create stand out on shelf and differentiate brands from competitors in the drive for sales.
During the early Experiential Age, the choice offered to consumers expanded, fuelled in part by the emergence of brand alternatives (more ethical, more premium etc.) and the growth of retail own brands. Packaging design played an important role in differentiating respective brand positioning (e.g. value to premium) and providing better or proprietary experiences to build and retain brand loyalty.
The introduction of the smart phone ten years ago in combination the with the proliferation of digital ‘fulfilment’ ecosystems amplified this further. With information at our finger tips and connectivity to anyone, anywhere in the world, at anytime, the world literally revolves around us to offer a cornucopia of choice, instant gratification, personalised experiences and self expression to suit our busy lifestyles and eclectic preferences.
The result: digitally empowered consumers looking for fast, seamless shopping experiences and personalised products.
We are awakening however to the devastating impact of this behaviour and the reality that it cannot be sustained without irreparable damage to people and the Earth. From ethics to climate change, we are becoming more conscious in our purchase decisions.
We are increasingly looking for brands with a strong sense of purpose who are actively demonstrating that they are doing the right thing. We increasingly reject those that do not.
Our expectations from the products we buy are also changing. Clients are asking for help in developing ‘plastic free’ alternatives to reflect the aspirations and desires of their consumers, who in turn are looking for greater transparency from brands.
The shift from sustainable mindset to sustainable behaviour
In November of last year we were issued a stark warning by scientists that we
are at ‘risk of an existential threat to civilisation and in a state of planetary emergency’. Earth is heating up - we are already 1°C warmer - and expected to continue doing so because of emissions from the past and the rising level of greenhouse gases. They called for urgent international action.
Sustainability is one of the most pressing challenges of our time. The UN’s 17 sustainable goals consider poverty and hunger, inequality and more beyond climate change.
For packaging, the core concerns for many FMCG businesses are carbon footprint and plastic waste. Their focus up to now has been navigating the minefield that is consumer perception through material choices and their use of resources.
The war on plastic is a good example, with consumer’s expectations for no-plastic alternatives potentially more harmful in certain situations. As we have a plastic recycling infrastructure in the UK (however efficient or inefficient it may be); there is a risk that adoption of alternative materials may not be
as recyclable or contribute a much higher carbon footprint. The packaging industry is beginning to talk more loudly about this. It is a delicate balance, compounded further by the variation in ‘waste’ infrastructures around the world. What may work in one country may not in another.
Herein lies the root cause of the deadlock we are in at the moment. Is plastic good or bad? What are the feasible alternatives? We are looking at packaging through the lens of the old paradigm; what something is, rather than what it enables us to do.
Dematerialisation and sustainable sourcing are not enough on their own to solve the problem we face. The value exchange must change, and we have to consider what actually happens to these materials once they have been used, and packaging ‘disposal’.
This will not be easy. A JW Thompson survey of sustainability attitudes in the UK from last year highlighted the gap between a “I want to be sustainable” mindset and actual behaviour, making the comparison with giving up alcohol or smoking. Good intentions abound but following through with the necessary action can be difficult.
The good news is that we are seeing a greater focus from brands on addressing disposal behaviour head on, and the emergence of packaging solutions and systems that encourage re-use rather than just reduction and recycling... a nod back to the past!
The increasing need for market agility
The go-to-market strategy for FMCG businesses has traditionally been based upon three core principles; creating recognisable brands, mass marketing the products and building relationships with the bricks and mortar retailers found on high streets and in malls.
Markets are becoming fragmented though. The growth of e-commerce channels and a lower cost of entry to markets has seen a plethora of disruptive new brands and products competing against established incumbents across different channels. The result is a greater breadth of products and experiences to address the expanding needs and expectations of consumers.
Furthermore, markets are becoming more ‘localised’ to reflect the specific dynamics of individual countries or regions. The impact of these new market dynamics on product offerings, price points and gross margins requires businesses to be increasingly reactive and agile in order to respond quickly and compete effectively.
Established brands who have spent the past decades optimising their supply chains to offer good quality products at competitive prices now need to resolve an emerging tension between supply and demand; how best to balance the need for market agility, in the form of product variation and personalisation, with the need supply-side for reduced complexity and SKUs and global harmonisation, in order to achieve realistic packaging costs and remain competitive.
Covid-19 has only acerbated this tension by highlighting the benefits of localised supply chains.
The mass adoption of Industry 4.0
Industry 4.0 describes the application of ICT to the production and distribution of goods.
Although the face of the ICT revolution is the computer and smart phone, its true potential lies beneath the human interface within the complex world of digital platforms, systems and logistics; where the unbridled flow of information and data powers today’s connected world. Multiple sectors have been disrupted, from books and music to banking and travel. Manufacturing will be next.
The past 100 years has seen the consolidation of the high-speed manufacturing and assembly line as the benchmark in mass production. Before the First Industrial Revolution, products were made by hand by workers with different specialisms.
The late 1800s and early 1900s witnessed the introduction of the first assembly lines by the likes of Eli Whitney and Henry Ford. Since then lines have become faster and supply chains more efficient, with production ‘off-shored’ to the Far East, eastern Europe and South America to minimise labour costs. The result: the production of millions of identical yet affordable products on manually operated lines, many of which are quickly disposed of after a single use.
A new paradigm of manufacture is emerging with a number of core ICT technologies at different levels of development beginning to converge.
The Internet of Things (IoT) will enable connectivity between physical products and their real-time tracking throughout the supply chain. It also promises ‘smarter’ interactions with consumers both in-store and in the home.
Additive Manufacturing (or 3D printing) builds up material to form components, making it less wasteful. Material development continues to expand with some materials displaying superior properties than with traditional processes. Developed initially for prototyping, it is now used for small scale production, most noticeably in the health, aerospace and rail industries. The scale of its application is expected to increase exponentially in the coming years.
Smart Factories and Supply Chains will combine manufacture automation, connectivity and data exchange to enable the virtual control of physical production lines and streamlined supply chains. Advanced Robotics in combination with Artificial Intelligence (AI) will enable more productive autonomous manufacture coupled with the capability to learn on the job and optimise or customise parts in real time while still on the line.
What does this mean for the future
The paradigm shift will bring new perspectives and expectations of packaging. Where today packaging offers minimal intrinsic value beyond protection and distribution of the products it packs, in The Fourth Age it will become a product in its own right to inspire, amplify and evangelise people’s experiences and optimise businesses’ operations.
Packaging will change. More importantly, the way we value and interact with packaging will change through four major shifts:
- Fast Materiality
Current production lines are slow and costly to build, set up and run. Failure
can be costly so businesses are typically risk adverse.
This will all change; the cost and speed to market will reduce dramatically in The Fourth Age with the shift to automation and additive manufacturing. Forget a timeline of months even years; new pack solutions will be implemented in weeks without the need to design and build tools.
Furthermore, bespoke packaging solutions will become accessible and financially feasible to all businesses. As automation becomes widespread, labour costs will no longer be a decisive factor in the location of manufacturing and the cost of installing new technology will fall. Localised micro manufacturing will become the norm.
- Mass Customisation
Mass production has served us well for decades but its inflexibility to adapt quickly to the changing needs of markets and consumers means it is unfit for purpose in The Fourth Age.
Instead, we will see the transition from specialisation to customisation through flexible manufacturing. Packaging lines in the future will allow a pack to be modified as it is being made. Filling lines will mix or prepare personalised products for consumers. Customisation at scale will be enabled by banks of connected 3D printers controlled by AI, blockchain and autonomous robots. RIP one size fits all.
- Smart Adaptability
Despite the best efforts of brands to engage consumers through their packaging, it is still generally treated as an ‘invisible’ commodity off the shelf by consumers rather than a useful tool and amplifier of experiences.
With the continued acceleration of materials technology and penetration
of IoT, packaging in The Fourth Age will become indispensable at all touchpoints in its lifecycle: smart, connected and adaptable. It will inform consumers of the status of the products inside and add tangible value to their consumption or function. Blockchain will enable consumers to access information through packs, such as the origins of manufacture, materials and carbon footprint, and upload instructions for use and disposal.
In return, packs will send data around purchase and usage behaviours along with its performance back to brands and manufactures to inform real time physical upgrades to the pack’s design as they are being produced on the line.
- Systemised Sustainability
In the same way it no longer makes sense for us to use natural resources to make cars that sit unused 90% of the time, it no longer makes sense for us to produce packaging that is discarded after a single use.
Through the deployment of connected supply chains, individual packs will become a trackable cog in a broader machine. The Fourth Age will enable brands to be truly circular and ensure resources are maintained and waste designed out through service-based ecosystems and reusable packs. And for those packs that do reach the end of their useful life, additive manufacture can use their shredded materials as feedstock so the loop can be closed.
Pack 4.0 in action
- Adaptable attributes
Flexible manufacturing will enable packs and products to be tailored on the production line to meet the exact needs of consumers, from the size and shape of packs to the formulations and ingredients of the contents inside. This could be shampoo packs sized to fit neatly on a shelf in the shower or liquid soap packs shaped, finished and coloured to match the décor and style of a bathroom.
- Immersive interfaces
Immersive interfaces Packs will become interfaces for consumers to access brand worlds and ecosystems via their smart phones. They will enable consumers to explore the brand or product ranges, order and purchase new products or reorder that particular product. They will also enable consumers to track and validate the product’s origins and sustainability credentials, be that where the product was grown or how the pack was produced and should be disposed of.
- Smarter Communication
Packs will offer greater reassurance to consumers by directly communicating to them. This will include inspiring the purchase through anti-counterfeiting features that confirm the product inside is genuine and has not been tampered with, to monitoring the status of the contents once purchased and informing consumers accordingly.
Get in touch with our team to explore how your brand could benefit within The Fourth Age of Packaging.