The Personal Care industry has long-term growth potential, and the market for Personal Care packaging is also on the rise. However, companies face key packaging challenges in trying to meet the needs of this sector.
In the U.S. alone, the value of the Personal Care packaging industry is already estimated at $4-$5 billion according to the Association for Packaging and Processing Technologies (PMMI). The worldwide market is expected to grow 5.5 percent annually over the next five years, reaching $38 billion in 2019.
Key challenges
Though Personal Care presents tremendous opportunities for companies, the growth represents certain packaging challenges that companies need to overcome to achieve sustainable success. Here are some things to keep in mind:
Where to compete
With the Personal Care market growing so rapidly, determeing whether to enter new geographic markets can be problamatic. According to Ernst Young, only 29 percent of Global Personal Care product companies believe they are good at choosing where to compete. EY found the choice comes down to mature versus rapid-growth markets. Each option has its own set of challenges. For instance, in mature markets like the U.S., customer demand may outpace capabilities and change erratically. While rapid-growth markets like Brazil, Russia and China can be lucrative, each of these markets is incredibly unique and would require special care and consideration.
Of course, expanding into foreign markets also puts a new demand on packaging efforts. Producing unique versions of packaging for foreign markets is challenging. To be successful, companies need to know their markets and come up with a packaging strategy that fits, whether this means creating dramatically different versions of packaging for unique markets or making small adjustments.
How to package
Personal Care covers a diverse array of products. More than 60 percent of all products are liquids, but others are semi solids, solids, powders and other forms, according to PMMI. Consequently, companies have many choices when it comes to packaging their goods. Nearly 30 percent are expected to use bottles by 2019, followed by tubes, cartons, cans and jars. Cartons have seen the most growth since 2010, when they were just 9 percent of the market. Now they have reached 19 percent. With the advent of this number could increase even more over the next few years. In addition, the growing desire for sustainable options could play a role.
Sustainability
As consumers become more educated about environmental issues, sustainability ranks high on their list of concerns for the products they buy. Consumers want companies to develop alternative packaging materials and switch to processes that are more environmentally friendly. This could be another reason use of cartons is growing. Many companies have found ways to source wood fiber from sustainable forests, allowing them to use more cartons in packaging. According to PMMI, many believe that unsustainable packaging materials will become obsolete as soon as within the next five years.
Another relatively overlooked way to approach sustainability is through processes that reduce the overall carbon footprint of the packaging process. Used by itself or included in other sustainable approaches, Digital Printing can have a great positive impact on the environment. Digital printing requires less make ready and ink than flexographic methods and enables companies to percent. Finally, digital printing supports lean manufacturing, which allows companies to order only what they need and reduce the potential for waste. Luckily, the ability to embrace short-runs for labels and cartons also helps companies deal with another Personal Care challenge: the need to be nimble.
Greater agility
In a mature market, consumers have fickle tastes and companies need to be able to respond quickly to demand. In addition, SKUs have multiplied as companies attempt to meet consumer demand for multiple products. Most companies lack the warehouse space to house all of this inventory, which means they increasingly rely on short-run orders with quick turnaround. According to Beauty Packaging, many retailers have noticed an uptick in the number of SKUs they stock, especially in the sun care category and products developed exclusively for children.
Digital Printing may see growth because it enables companies to produce smaller amounts of packaging with less lead time. This will help Personal Care companies accommodate the growing number of products more successfully.
Customer expectations
Customers desire packaging that is convenient as well as other innovations and forward thinking developments. The need for convenient packaging across segments continues to climb as many embrace an on-the-go lifestyle. According to PMMI, this means the need for small, portable packages and travel-sized products is rising. Companies with that accommodates customers' lifestyle needs may emerge as market leaders.
The Personal Care market has great potential for many companies, but those pioneering the way will have a few packaging challenges to sort out. First, they will need to determine their most lucrative market prospects and based on their decisions, and then determine how they will use packaging to become industry leaders.
