Most packaging and label companies, facing inflation-related pressures, are prioritizing packaging and label functionality along with product safety, according to a new report from RR Donnelly. Packaging and labeling companies are also investing in sustainability initiatives and focusing on expanding their e-commerce operations to better meet customer demand.
“As consumers demand higher accountability from the brands they choose to support, building functional design and safety features into packaging remains essential to ensuring product integrity and a great user experience,” stated Lisa Pruett, president, RRD Packaging & Labels Segment. “Meeting this increasing demand will require a balance between three competing priorities: protection, convenience, and brand appeal. Brands that strike this balance with their packaging will have an opportunity to deliver a product experience customers can trust, boosting loyalty and reducing damage concerns.”
The company’s third annual survey of packaging and label decision-makers shows that with increased in-store and online competition, along with inflation and rising costs of materials, many are paying specific attention to the core fundamentals of production protection and material composition.
As e-commerce demand increases, functionality and product safety remain top priorities, and brands are willing to make the investment for the right materials. RRD’s latest report shows three quarters (75 percent) of packaging and more than half (60 percent) of label respondents expect to make functional design-related changes (strength, size, opening) in the next two years, while 73 percent and 70 percent, respectively, plan to make material composition changes. Additionally, the large majority of packaging (86 percent) and label (79 percent) respondents agree that inflation and rising costs of raw materials have caused changes in the way their organization sources packaging and labels over the past year.
When asked to assess factors motivating their expected packaging changes, respondents rated consumer or end-user appeal (48 percent), efficiencies in storage/distribution (47 percent), and increased product protection (46 percent) as the top three major priorities. Top motivations for label respondents include pressure to lower costs (45 percent), meeting new regulations (41 percent), and new products or product changes (40 percent).
Along with a focus on materials, companies are continuing to prioritize, track, and make adjustments that impact overall company sustainability performance. With heightened emphasis on brand sustainability performance, coupled with increasing customer demand for eco-friendly products, companies are striving to meet internal and external stakeholder expectations. Nearly 60 percent of packaging respondents indicate they are taking sustainable and eco-friendly aesthetic direction over the next two years to appeal to buyers.
The large majority of packaging (83 percent) and label (80 percent) respondents say their companies have moved closer to their sustainability goals, with 81 percent and 79 percent, respectively, indicating their packaging and label operations specifically have moved them closer to their sustainability goals. For packaging respondents, reduction of material waste (69 percent) remains a top sustainability consideration when making packaging design decisions, followed by material recyclability (68 percent) and material removal/light weighting (54 percent).
Following a year of tremendous e-commerce growth, the majority of packaging (78 percent) and label (79 percent) respondents reported a rise in their e-commerce business over the past year. From customer preferences for convenience to brand agility and cost-saving considerations, e-commerce continues to evolve, and companies are investing in ways to attract customer attention online.
Of those trying to meet growing demand, more than half (55 percent) of respondents have designed packaging specifically for e-commerce, up 18 percent from RRD’s 2023 report. Of those who have seen an increase in e-commerce activity, product protection and customer satisfaction was a top consideration for companies. When asked how companies are ensuring products are packaged safely and arrive without issue, packaging (64 percent) and label (67 percent) respondents say they are using specialized materials for added protection, and 58 percent% and 66 percent, respectively, are focusing on end-user feedback and reviews to impact packaging decisions.
