DAIRYREPORTER.COM SPECIAL: DRIVING UP QUALITY, DRIVING DOWN COST

Cut dairy packaging investment, risk profits and quality - Mintel

By Mark ASTLEY contact

- Last updated on GMT

Related tags: Milk

Cut dairy packaging investment, risk profits and quality – Mintel
In the current economic climate, dairy processors are looking across their businesses for opportunities to reduce outgoings and increase margins. But firms that cut packaging investment are only risking profits and product quality, Mintel has claimed.

Speaking with DairyReporter.com editor, Mark Astley, Mintel global food and drink analyst, Caroline Roux, and global packaging analyst, Benjamin Punchard, warned that cutting corners when it comes to packaging could in fact be detrimental to cost-saving efforts.

“The primary purpose of packaging is to protect the product,” ​said Roux and Punchard, “but in those cases where packaging has been reduced to the bare minimum to reduce packaging costs, it can result in the pack no longer being robust enough to protect throughout the supply chain to the retailer.”

“Retailers will not accept damaged goods and consumers will avoid packs on shelf that appear to be scuffed or damaged, meaning that any value in these products is lost.” 

Consumers, manufacturers increasingly draw to shelf-life

Adoption of the “right packaging”​ can, however, ensure the quality of a dairy product throughout its stated shelf-life and reduce any potential rejection costs, said the analysts.

While there is very little "truly 'smart' packaging"​ available to dairy processors, developments, such as packaging barrier properties improvements, can facilitate a reduction in cost, while maintaining the quality of the packaged product, said Roux and Punchard.

This is something that consumers are increasingly yearning for, they added.

“Shelf-life will increasingly draw consumers’ attention and therefore food manufacturers’ focus."

It has certainly caught the interest of New Zealand-based dairy processor and exporter, Fonterra, which recently unveiled a new triple-layer light-proof milk bottle.

Fonterra claims that the innovation will protect the organoleptic and nutritional properties of fresh milk that can be damaged and degraded by light.

This type of innovation could “become compelling”​ to consumers if properly communicated, said Roux and Punchard.

light-proof

Small or large format opportunities

Aside technological advances, the obvious way for dairy processors to cut costs and increase profitability in terms of packaging lies in the adoption of smaller or larger format developments, said the Mintel analysts.

“Larger format is an obvious one but processors always have to balance that up with consumers’ financial constraint and the risk of frustrating food waste.”

“A second option would be to provide much reduced pack sizes,” they added.

“As consumers are increasingly shopping with a fixed budget and with a fixed period in mind – for example, shopping specifically for that week or even that day – many may appreciate smaller options that may be more expensive per litre or kilo but enable them to buy what they need at a lower price point.”

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1 comment

Thank you

Posted by Sandeep Goyal,

Thank you for sharing the news related to packaging. It was really very useful.

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