How to succeed with food packaging for grocery e-commerce
While consumers have long been drawn to the advantages of online shopping for all manner of products, groceries had remained something of an outlier. Browsing the aisles, comparing different brands and packages on the shelf, physically being able to inspect and choose your products; all reasons that kept the preference for traditional bricks-and-mortar stores high. Then Covid-19 happened.
“The pandemic pushed everybody – consumers and retailers – more into e-commerce,” says Javier Moreno, a Tetra Pak Channel Manager who specialises in e-commerce. “People turned to online shopping because of the lockdowns, or because they had no other options.” Covid-19 served as an accelerator for grocery e-commerce, with much of the sector experiencing as much as five years of development in just a few months. Yet since the end of many regulations and restrictions, this change in consumer behaviour hasn’t just remained – it’s still growing, and forecast to continue for the foreseeable future.
Grocery e-commerce is booming
The figures are clear – grocery e-commerce is booming. By 2026, it’s forecast that 40% of global chain retail sales will happen on the digital shelf, up from a pre-pandemic figure of 23%. Similarly, the 2021-2026 CAGR growth for grocery e-commerce (10.5%) looks set to far outstrip that of physical stores (3.5%). So what’s driving this continued growth? For Moreno, there’s one main reason – convenience.
“The pandemic changed people’s behaviour, but they now feel comfortable with shopping online for groceries – so they’ve kept doing it,” he says. “And that’s because they’ve realised it makes their life easier and simpler.” Moreno cites the fact that the 25-to-44 age group are the most frequent online grocery shoppers – busy young professionals with families – and how 76% of regular online grocery shoppers in the UK have children. But there’s something else behind this idea of convenience, and it involves exactly what consumers are buying.
Ideal food packaging for consumers and producers
“It’s packaged products and ingredients – so called edible groceries – and things that are bulky and difficult to transport, like a 12-pack of milk,” says Moreno. Turns out that many existing carton packaging solutions for food products and ingredients are an ideal solution for e-commerce – for consumers and producers alike.
“They are compact by design, almost completely filled with product, and so are comparatively more efficient to transport in bulk,” he says. “They’re also shelf stable, so you don’t need cold-chain distribution – they can be delivered to your door while you’re at work and there are no food safety issues.”
Food e-commerce challenges and solutions
But with the rise of grocery e-commerce, and new ways of packaging food, come a new set of challenges for food producers and retailers. Firstly, there’s the disruption to the traditional supply chain. “Previously, you had a warehouse, with everything on pallets. Then it goes to the supermarket, goes on the shelf, and that was it,” says Moreno. “But now, maybe it doesn’t reach the shelf. It goes in a bag or box, into a van, then to your house.” He notes that orders might now be fulfilled from the supermarket, direct from warehouses, or at some other location by a third party such as Amazon.
“So do you need new distribution centres, which is what new players such as Amazon and Alibaba are doing? Or do you follow the legacy retailers like ALDI and Tesco, and introduce things like curb-side pickup, secure lockers on site, or last-mile delivery options. You need to think how your package fits into all that.” Many of these players, omnichannel or pure play, are creating state-of-the-art distribution centres.
Secondly, maintaining profit margins in this new chain, with all the requisite technology, is not straightforward. Optimisation of space and inventory must be re-thought, as does how you move products around in your centres and prepare them for delivery; there are many additional costs here. So packaging must be as light as possible and save on space, both aspects where carton packaging has distinct advantages.
Technology, logistics, secondary packaging and unboxing
Then there’s consumer demand for ever quicker delivery – same day, five-hour, even two-hour. This has given rise to “black stores” – hyper-localized units in densely populated locations that function entirely through robots and automation. Future-proofing your package to ensuring its smooth passage through such sites, and that it’s as suited to small, one-off deliveries as it is to a consumer’s monthly shop, is an important consideration.
Beyond being easy, cheap, and efficient to repack and transport, a further consideration is ensuring the package arrives in the best physical condition possible for what’s called the unboxing experience – namely, taking a package out of its secondary packaging, something that Moreno says is crucial for e-commerce success.
“Secondary packaging is a way to communicate your product uniqueness, so you can invite the consumer to the lifestyle you want to present,” he says. “Brands can leverage this unboxing to communicate and engage with consumers, creating excitement and anticipation around the product.”
This also feeds into the benefits of multipacks, and having consumers subscribe to regular deliveries of a set amount – a huge growth area. Shipping in volume saves money that can be passed on to the consumer, plus brands can experiment with including different flavours as a way to trial new products or foster greater brand loyalty.
Make your food package stand out on the screen
One big issue with grocery e-commerce is that consumers no longer get to hold or see the package in person – instead, they’re scrolling through small images on a screen. Being visible, and communicating the right information, is essential for success in this particular channel; again, cartons have an inherent advantage over jars, cans, and pouches.
“If you think about the shape and design, all the panels, it’s perfect for e-commerce,” says Moreno. “The front panel has a lot of space to be creative, to ensure you have a clear message for online consumers. We do a lot of work helping our customers optimise their design, making sure it is communicating the brand and essential information, and that ultimately the consumer will click on it.”
Consumer food trends and behaviour
Understanding consumers’ food behaviour, and how home cooking has changed, is another important factor. Analysing a typical day in the life of a consumer, and how they use products in their home, can pay dividends for e-tailers and food producers alike. Pertinent questions to ask include: Why are they using a particular product? How do they use it? And what do they want to achieve with it?
“When you talk about package size, you need to think how that product is embedded in consumers’ lifestyle,” says Moreno. So what’s the sweet spot for a family or four, or for a couple? Will individuals buy this? And if so, is it easy to reclose and store once open? “Carton packages, like Tetra Recart, are perceived to be modern and convenient, and associated with more healthy, nutritious, natural products,” says Moreno, characteristics that fit with the values many consumers hold.
Ultimately, packages like Tetra Recart provide a holistic value proposition tailor-made for today’s e-commerce climate. “There’s a perfect storm that makes it the perfect moment for this type of packaging – it’s just so logistically efficient and optimized for these new shopping channels,” says Moreno. “In the end, it all comes down to creating super-convenient ways for people to consume food – and these packages deliver.”
