Products with medium-sized packaging will be hit the hardest by changes to consumer shopping amid rising inflation, according to leading data and analytics company GlobalData, who noted an emerging polarisation in the market.
The report said that brands will need to find new ways to increase value for money when it comes to packaging, as rising inflation is causing customers to be torn between bulk buying to save money and item quality.
“In response to rising inflation, consumers are either spending less by buying less overall, switching out some products to save money, or buying higher quality produce to get better value for money,” said Ramsey Baghdadi, consumer analyst at GlobalData.
“This is causing a polarisation in the market, with brands either increasing package size to appeal to bulk buyers or shrinking packs.
“Proving value for money will be key, with solutions such as larger pack sizes and reusable packaging expected to become more common.”
Refillable packaging is re-emerging, with recent announcements by brands such as Unilever’s Old Spice.
In 2022, GlobalData’s Q3 survey of 21,000 respondents revealed that the majority (67%) of consumers globally found refillable or recyclable packaging extremely/quite important in their product search.
“GlobalData expected refillable packaging to take off pre-pandemic. However, because of the spike of hygiene concerns, the demand for refillable packaging dropped,” Baghdadi said.
“Now, safety anxieties are starting to lessen in Europe and North America, reusable/refillable products are making a comeback. More importantly, packaging companies should quickly make a move while the iron is hot.”
As a consequence of reduced disposable income and tighter budgets, demand is rising for private label products, such as supermarket own brand food.
According to a survey by GlobalData, a notable proportion (30%) of consumers globally claim that they typically purchase private label dairy products.
“Premium-priced products are at risk of being left on shelves, as consumers switch to private label/cheaper brand alternatives,” said Baghdadi.
“This has clear implications for change on packaging design and costs. GlobalData forecasts that larger packs sizes (3001-5000g/ml) will grow in volume at a rate of 4.3 per cent per year to 2025, outpacing that of smaller pack sizes.
“However, smaller pack sizes are still expected to continue to dominate the consumer packaging market overall.
“Longer term, rise of both shrinkflation and larger pack sizes will lead to further polarisation of packaging sizes in many product categories, with the standard medium-sized pack hit hardest.”
