We’re looking at the plastic packaging industry at the moment. We know we can make a consumer-facing difference here but, to be honest, it’s a hard nut to crack. Nobody wants to take the leap in case they have a price to pay, so all parts of the supply chain struggle to recover the costs associated with change. And that raises the question, who is responsible for innovation?
Progressive companies looking at new ways to deliver a better consumer experience say, almost exclusively, that customers’ overriding focus is on price. Reducing weight, thin-walling and recycling materials are driven by a single incentive: cost. Costs are not welcomed by the retail sector.
Packaging, though, is an increasingly emotive subject and features almost every day in the press. We know, for instance, that plastic will soon outweigh fish in the sea. As a consumer concern, the environmental impact of plastic, including packaging, is commonly acknowledged to be catastrophic. Years after ‘reduce, re-use, recycle’ was launched as a campaign strapline, the best we can find from packaging manufacturers is: ‘As an industry, we need to lead the way.’
So, is price the only consumer demand, or is this, more accurately, customer demand?
Objectives driven by business performance targets rather than consumer-centricity seem to be holding things up. Packaging is created in a bid to deliver perceived value over real consumer benefit. Having established the notion of added value, the task is to meet the profit requirements of retailer customers who provide a route to market for these items. In other words, marketing.
There seems to be a chasm of understanding between consumers, who want to see a reduction in environmental waste, and the packaging industry that focuses on the requirements of their customers. I’ll quote again from a room44 blog from August (Can you innovate even if you wanted to?) where a senior packaging industry figure said of the plastic pollution issue, “Anyone with any common sense knows the only problem with plastic waste. It’s the morons who throw it away.”
Here’s a snippet from an e-mail I received from a major UK supermarket on the subject of black masterbatch in plastic packaging. This is a particular problem. Black and dark colours reduce the ease with which plastics can be recycled and then re-used. Our contact wrote, “… If you have colours that you think will be detected and also answer the need to show off product at its best, then of course I am interested. But the way to do that is to work with suppliers and for you to find a way to gain commercial benefit through that route.” In other words, supermarkets are happy to move in the right direction, as long as their suppliers bear the cost.
If there is a genuine desire to lead the way, there is absolutely nothing stopping supermarkets or their suppliers – except for the impact that change will have on their short-term business performance. As a study in who needs to use Design Thinking as a methodology, the packaging industry is perfect. As a study in inertia, it’s almost unrivalled.
The commercial reality is that retailers simply won’t take a price increase that they can’t pass on to consumers – and that’s not popular with anybody. But with a declared strategic goal that consumers can understand, and the baby steps in place that are needed to meet the target, it is easier to manage.
UK retailers have declared carbon reduction targets. Here’s an example from Tesco:
“Following the Paris Climate Agreement, we will encourage suppliers and work with them to set their own credible science-based targets on a 2-degree trajectory. Or alternatively aim to achieve ‘absolute’ reductions, based on 2015 levels of:
- 7% by 2020 and
- 35% by 2030 (15% for agricultural emissions)
We believe these targets balance the need to produce more food to feed a growing global population with the need to embrace restorative farming practices and reduce field emissions. We are working with our suppliers to achieve these targets through our Tesco Supplier Network where we can collaborate on carbon reduction measures.”
As a consumer, I want to know how many Coke bottles won’t be produced for Tesco as a result of this target; how much of a dent will it make in marine waste; when will turtles stop getting yoked in plastic; and when can I expect to see loose fruit and veg across all stores?
In retail, consumers pay for everything and we aren’t getting what we want. Why? Because things change.
- We used to want convenience. Now we have it, it isn’t enough.
- We used to want low, low prices. We’ve got them now. It isn’t enough.
- We used to want huge choice. Now we have it, we want to avoid out-of-town stores and walk up and down the high street as well.
- We used to want perfect carrots wrapped in plastic. Now we want misshapen, loose carrots in paper bags so we can feel reconnected with the food chain.
Of course this is a generalisation, and there is a flip side. There are examples, in grocery retail, of design thinking meeting great product design:
LUSH has been developing products that use zero packaging. Solidified liquids that are self-supporting: a retailer delivering against consumer demand. At a packaging innovations show recently, we found packaging company people who argued this simply couldn’t work because LUSH must sell so many more units to cover the cost of extended product life. Attitudinally, we see a retailer doing it and packaging guys rejecting the novelty.
Halo Coffee has seen the trend towards convenient coffee consumption and the disaster that laminated and unrecovered aluminium presents. New fully bio-degradable coffee capsules can do the same job as company branded products without the environmental on-cost.
HISBE may not be the first ethically minded supermarket to hit the high street, but it is determined. You’ve probably got a similarly minded outfit somewhere close to where you live but it may be hidden on a farm. Take a look at HISBE’s site: lazy observers will comment on all the packaging that’s still apparent. But by doing that, they’re choosing to ignore all the products that aren’t packaged. That’s where the difference is being made.
To find out more about the power of Design Thinking and how it can turn consumer demand into breakthrough products, look at the other blogs on our website.
For information on effective ways to drive waste reduction in all parts of the product supply chain, take a look at the work the Ellen MacArthur Foundation is doing. It’s a revolution that’s only just getting started.
Future thinking. Future Proofing. It’s what we do.
#room44innovates #ellenmacarthurfoundation #design thinking #innovation strategy