In the packaging market, the fast-growing flexible packaging segment has shown itself to be a proven winner in recent years as brand owners increasingly transition to its use.

The Flexible Packaging Association (FPA), the leading trade association for converters of flexible packaging and industry suppliers, recently commissioned the Flexible Packaging Transition Advantages Study to quantify the impact of switching from non-flexible packaging to flexible packaging. The study integrates insights from brand owners surveyed online in September 2016 by Packaging World magazine and insights from consumers surveyed online in September 2016 conducted by Harris Poll.

Insights from both packaging professionals and consumers suggest the flexible packaging industry will experience steady growth, continue to innovate and outpace rigid packaging. Brand owners using flexible packaging benefit from increased savings, improved sales and strong business results while also satisfying consumers’ needs for packaging that fits their lifestyles.

In an interview during the recent FPA annual meeting, new FPA president and CEO, Alison Keane, said:  “Most brand owners and retailers will tell you that what is driving them is the consumer, but we also need to look at what retailers are looking for. How do you display flexible packaging, reconfigure shelf space and how much will that cost them? Another component is if it’s easier to stock and takes less manpower to get it on the shelf. Then they will be much more open to change.”

Brands Making Transition

Many brand owners (83 percent of those responding) already use flexible packaging, and more than half intend to use a higher mix of flexible packaging in the next five years. As a result of the operational benefits and ability to meet consumer needs, brand owners are likely to reap the benefits of transitioning to a higher mix of flexible packaging for the foreseeable future.

As consumer responses have shown, shoppers are likely to choose flexible packaging over non-flexible packaging and are willing to pay more for products packaged in flexible.

Food, in general, is the fastest growing market for flexible packaging, Keane says, but while it’s the fast-growing segment, there is still a huge portion available to flexible packaging. She points out how dominant flexible packaging has become in salty snacks with new growth in areas such as dairy and meats. At the same time, flexible packaging is making inroads in health care and personal care packaging.

Consumers reported that they are seeing more innovation in packaging for snacks, breakfast products, and meat, poultry and seafood, which are areas of opportunity for brand owners.

The brand owner study shows that for those companies shifting to flexible packaging, the primary reasons were reduced production cost (49 percent) and shipping/transportation efficiencies (45 percent). However, they also reported that the transition provided consumer-oriented benefits, such as convenience (45 percent) and fitting consumer lifestyle trends (39 percent).

While 57 percent of brand owners who increased their use of flexible packaging were able to lower production costs, more than half also reported an improvement in their sales.

Investments Paying Off

Keane says companies are seeing that although there may be an upfront capital investment to make the change to flexible packaging, over time they are likely to see a stronger return on investment, and they will see it faster than with other types of packaging changes.

When consumers were asked to choose between flexible and non-flexible packaging for a product they were considering purchasing (assuming the product was exactly the same and only the packaging differed), 71 percent of Americans said they would prefer flexible packaging over non-flexible packaging. On food packaging, in particular, consumers pointed to benefits of having food products stored in flexible packaging versus non-flexible packaging. What’s more, nearly half of U.S. consumers indicated they are willing to pay up to 10 percent more for food offered in flexible packaging.

Keane says consumers are willing to spend more because flexible packaging is more convenient, it’s more on-the-go and there is less waste. Other key benefits that resonated the most with consumers include flexible packaging’s ability to reseal, ease of storage and easy-to-open design. Packaging features that consumers consider important are also features that consumers perceive to be benefits to flexible packaging over non-flexible packaging. However, she adds that the FPA would like to delve deeper into whether or not consumers actually are spending more for flexible packaging.

Nearly two-thirds of Americans think there have been innovative changes in flexible packaging over the last five years. Consumers identified frozen food, coffee and tea, and snacks/salty snacks as some of the products that have demonstrated the most innovation.

This does not mean all companies are planning an immediate switch to flexible packaging. The survey showed most respondents are using some mix of flexible and rigid packaging. Only 14 percent of respondents are exclusively using flexible, and 14 percent are exclusively using rigid. A small percentage did not feel that their packaging fit into rigid or flexible categories.

The Future is Flexible

Data from the Packaging World survey shows that brand owners have been transitioning to more flexible rather than to more rigid packaging. Twenty-six percent of brand owners said they transitioned to a higher mix of flexible packaging in the last five years, while 13 percent of brand owners made the transition to a higher mix of rigid packaging.

The trend is particularly noticeable for brand owners who recently transitioned to a higher mix of flexible. Fifty-eight percent of respondents who already converted to a higher mix of flexible in the last five years said they intend to transition to an even higher mix of flexible packaging in the future.

While the data suggests increased use of flexible packaging has a positive impact on business, brand owners also acknowledged challenges associated with transitioning from rigid to flexible packaging. Possible barriers identified in the open-ended responses include: concern over durability, shelf appeal, perceptions of value from the customer, costs involved in changing machinery and stackability.