Trends in Food & Beverage Retail Packaging
An Interview with Bruce Funnell, Head of Packaging, Nestlé Product Technology Centre (NPTC) Confectionery
Two Key Industry Trends… According to Nestlé
- Enhanced Digital Technology – including digital printing abilities, digitally enhanced processing in production as well as online consumer buying behavior – in 2020, indications are that in the UK, 10 percent of all food purchases will be made online, representing a significant evolution of food retailing.
- Rising prosperity in emerging markets – such as the BRIC countries. Consumers are becoming more affluent and more discerning with what they buy and expect from brands. Consequently, consumers are increasingly disloyal to brands as they rightly expect fundamentals such as food safety and sustainability to be in place, regardless of brand. The differentiator will be driving the brand essence throughout the product packaging, immediately allowing the consumer to engage with the brand on the shelf.
We live in a world of changing realities. Aging populations, rising wealth, urbanization and hyper-scheduled lifestyles are all global trends that are driving social change while new technologies are enabling speed-to-market through optimization and workforce expertise.
To compete in today’s global markets, constant innovation becomes a key differentiator and growth enabler. To accelerate innovation, brand owners, materials suppliers, designers and packaging converters are increasingly looking to collaborate throughout the entire packaging development process.
IN recently visited Bruce Funnell, Head of Packaging (Global Confectionery) at leading food and beverage company Nestlé, to discuss global trends, best practices and the necessity for collaboration throughout the industry.
What does collaboration mean to you?
At Nestlé, we see open innovation as an opportunity to co-create new ideas with input and added value from external partners. As a company we spend around 1.5 billion Swiss Francs yearly on innovation. We also spend a huge amount on decentralized, local market research as much of our food and beverages are produced locally, necessitating packaging to meet local needs.
With this in mind, there is a clear need to break the silos. Although we have expert networks on the inside, we need to see how we can best leverage external innovation partners such as universities, start-ups, brand owners and raw material suppliers.
In order for these innovation partners and business partnerships to work successfully there must be good alignment to enable complementary competencies to be leveraged (for example, working with a company that provides technology expertise, such as polymer design, to complement Nestlé’s food and market understanding). This strategy enables the technology to be deployed rapidly. A key part of collaboration is a focus on business alignments and building on company values, such as reputation.
What are some of the most unique and interesting cases of collaboration in the industry?
Working in R&D, it is difficult for me to name a specific case; but in general, partnerships that I see working very well are those including processes which help us have a better understanding together. These partnerships are driving technological changes and bringing differentiated technology to market more quickly than would usually occur.
What do you see as some of the resonant challenges for collaboration within the industry?
For a partnership to be successful, all parties need to understand and be aware of what is happening. This requires full transparency as well as an element of trust which is built up over a period of time. Each party inevitably has their own priority assets, including of course their individual know-how. To facilitate the sharing of assets, there must be a high level of trust between parties and this is more often than not, built from a strong strategic alignment and cultural fit between participating organizations.
Innovation costs time and money. Consequently, there must be a risk sharing approach in place in order to work effectively towards the goals.
In your opinion, where does responsibility lie within the value chain to drive collaboration, or is it a unified responsibility?
Collaboration doesn’t come down to any one individual. Rather, it requires a good fit throughout the entire process, with all parties working constructively towards the same goal.
To fully benefit and gain a competitive advantage from the process, there needs to be certain complementary elements in place, namely: values; competencies (for example, matching material competencies with expertise in terms of application and consumer needs); and, interests – meaning, those that will drive improved turnover by working together with supplier and partner. The collaboration results must speak to the market and provide a strong outcome for all involved.
What is the most recent collaboration on your side? How did all the parties work together to come to a solution?
Nestlé’s involvement in the REFLEX Project – a collaborative R&D project, co-funded by Innovate UK, which aims to create a circular economy for flexible packaging and divert it from landfill. It is a great example of a collaborative partnership between global brands Nestlé UK Ltd and Unilever UK Central Resources Ltd as well as major stakeholders across the value chain, including the Dow Chemical Company, the converters Amcor Ltd and Interflex Group; and waste management and recycling specialists SUEZ and TOMRA Sorting Ltd.
Through this partnership we explored how to increase the opportunity for recycling, how to take a complex material structure with a complex set of needs and facilitate getting value out of the product.
By closing the loop and working together we proved that we can incentivize the value chain, encourage people to recover value from flexible packaging and encourage overall recycling of plastic.