It is estimated that the food packaging sector accounts for over one-third of the total global packaging market.
Despite the mounting pressures and sluggish economic growth, companies in the food packaging industry are focusing on investing in technologies to improve the shelf-life of the products. The food packaging market can be segmented into applications such as convenience foods, confectionary items, dairy items, and vegetables. As the world is experiencing rapid changes in the lifestyle and food preferences, prominent companies are setting up new production facilities to keep up with the latest trends in the market. The growth of the food packaging industry can be attributed to factors such as the rising disposable income of the people, the growing demand for ready-to-eat products, and growing awareness about packaged foods.
Although, food packaging plays a critical role in attracting the customers when choosing similar brands, several factors that may hinder the growth of the industry include.
- Relentless innovations: In this challenging environment, food packaging companies are constantly trying to innovate to stay relevant and differentiate their product offerings in the market. With the changing preferences of the customers, packaging companies need to differentiate their products using different size, shape, color, and functionality in their packaging design. Therefore, it becomes a challenge for the packaging companies to invest in new equipment and machinery to keep pace with these changes.
- Rising cost of raw materials: For packaging to be more rigid and preserve the nutritional aspects of the food, raw materials such as plastics, paperboard, and adhesives are extensively used. Amid the recent great economic depression, the packaging industry has been affected by increasing prices of these raw materials.
- Sustainability challenges: As the packaging industry relies on raw materials that are considered to be harmful to the environment, various government organizations and environmental groups are voicing their concerns toward the use of these products. Therefore, packaging companies are facing the need to invest in packaging disposal and recycling techniques to reduce emission concerns.
While the rising environmental pollution and global warming are compelling packaging companies to shift towards more eco-friendly food packaging techniques, the companies should also think about devising effective strategies to stay abreast of the competition. The ideal way to understand the current market scenario is through profiling the competitors and their respective position in the packaging industry with the help of an effective competitive intelligence solution.
The Business Challenge
- The client- A renowned food packaging client
A renowned client in the food packaging industry wanted to identify the latest packaging trends and collect and analyze actionable information about the competitors and their product offerings to devise a robust business strategy. The food packaging company wanted to discover the potential risks and opportunities and gain unique marketing insights to improve their market share and enhance the business performance. With the help of a competitive intelligence engagement, the food packaging company wanted to understand the supply-demand relationship and effectively suggest suitable measures to improve their service efficiency.
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To keep track of their competitors and their product offerings, the competitive intelligence experts at Infiniti carried out extensive research comprising interviews and discussions with stakeholders in the packaging industry. Furthermore, to conduct a SWOT analysis, the client also collated information across a wide array of secondary sources such as trade shows, paid industry databases, and company presentations.
The Solution Benefits and the Business Impact
With years of expertise in offering a plethora of services, Infiniti’s competitive intelligence solution helped the food packaging company ascertain the demand for the products and services and judge the market’s likely response to a new entrant. The food packaging company was able to gain a quick and concise view of the market to make better decisions on their product positioning and marketing strategy.
In the future, prominent packaging companies are planning to shift toward green packaging techniques to reduce the rising environmental concerns. Moreover, with the advances in the technology, packaging companies will also shift toward smart packaging techniques such as RFID technology to streamline their supply chain efficiency and keep track of their products in real-time.
A must-read case study for strategy specialists and decision makers looking to develop an understanding of the food packaging market.