Packaging set for solid growth in Africa

Living in an era where consumers are bombarded with a riot of colour, shapes and slogans shouting for their attention every time they enter a grocery isle or wish to make a purchase, the role of packaging has become a crucial factor that drives consumer spending and behaviour.

According to findings released by MeadWestvaco (February 2014), 41% of respondents said packaging is an important attribute, whilst 36% said they tried new brands because the packaging enticed them. Interestingly enough, however, only 10% of consumers questioned indicated that they were completely satisfied with the packaging that they came across.

“Brand owners realise that their retail package is the last and best chance they have to convince consumers to make a sale,” says Charles Muller, Executive Director of the Packaging Council of South Africa (PACSA), who regularly consults with brand owners and retailers. “Because the majority of purchases made are based on emotion, package design has become a vital component of a brand’s marketing strategy and success,” Muller says.

Apart from enticing consumers to buy, the role, form and function of packaging has also changed in recent years in step with the changing demographics of our modern society.

Demands in the region’s two most powerful economies

South Africa and Nigeria are currently regarded as Africa’s two most powerful economies that are also driving the spending and packaging trends on the continent. Nigeria, Africa's most populous country and largest oil producer, recently emerged as the continent's biggest economy following the announcement of its gross domestic product that placed the country ahead of continental powerhouse South Africa as new and fast-developing sectors such as telecoms, music and local film industry, are considered in the GDP rebasing.

According to Finance Minister NgoziOkonjo-Iwela, Nigeria's economy is expected to increase by as much as 60%, taking it from $264 billion past South Africa's $384 billion, which is expected to grow from its current 2% to 5.4% by 2030.

“The availability of resources and disposable income in both Nigeria and South Africa are influencing the packaging trends we are seeing on the continent today. International brands are finding new customers in Africa, and an increasing amount of packaging manufacturers are opening shop throughout the continent,” Muller says. He adds that the growing economies and Western influences are radically changing the landscape for brand owners and their products.

Changing demographics call for new packaging solutions

“Thanks to the availability of better quality food and healthcare, people in Africa are living longer. In many cases, this generation of ‘aging baby boomers’ are choosing to take care of themselves instead of moving into retirement or convalescent homes. Similarly, we see more single parent families and smaller family units with couples choosing to have fewer kids than we did a generation or two ago,” explains Muller.

As a result, there is a growing demand for single serve meals and convenience or microwavable food. “Time, or in many cases the lack of it, has created a major demand for convenience or “on the go” packaging that allows the consumer to buy, cook and serve the food in one package, or that is able to heats or cool itself.

However, Muller warns that consumers are also very unforgiving if they find the packaging too bulky, complicated or difficult to open and handle. “Consumers will result to what has become known as “wrap rage” if the packaging is not user-friendly or fails to deliver on what it promises to do,” Muller says.

Safe and tamper-proof packaging

Another result of the growing economies and the world literally becoming a global village, is the growing number of products that are imported from around the world for local consumption. s the battle for the budget escalates in supermarket trollies and spaza shops, some brand owners have even shown themselves not to be above sabotaging their competition’s product. Product security is therefore becoming of paramount importance, and modern packaging solutions demand tamper evidence that is simple and intuitive, yet fool-proof.

Whilst the consumer wants to be protected and feel confident about the product he or she is buying, new mechanisms are also being developed to protect successful brands. “Counterfeiting is becoming a major problem that is putting the most successful brands at risk,” Muller says, warning that cheap and inferior products are entering the market, brazenly copying successful brands and fooling unsuspecting consumers.

“Packaging is therefore being developed that offers both covert and overt anti-counterfeiting solutions, such as the inclusion of microtaggants, Radio Frequency Identifcation (RFID) options, i.e. the wireless, non-contact use of radio-frequency electromagnetic fieldsto transfer data for the purposes of automatically identifying and tracking tags attached to objects options, lenticular printing and holographic printing.

Following on the point for packaging that is tamper proof, is the growing demand for packaging that ensures child safety. Packs and closures used for healthcare and cleaning products need to keep little fingers out of products which could harm them, whilst ensuring that adults can still open and close packaging easily.

By law, manufacturers must package certain household items – including some medicines, cleaning products and gardening goods – in child resistant packaging.Unfortunately, no container that’s designed for everyday use can be guaranteed totally child proof. “A child resistant package usually requires a special ‘trick’ to open it – something too complicated for most young children to work out. For example, users might have to push or squeeze a lid at the same time as turning it,” Muller explains. It’s also possible to make non-reclosable packs, such as blister packs, child resistant by using very strong material or covers that have to be peeled off.

Sustainability and smart packaging

Sustainable packaging includes looking at the design of the package, the choice of materials used, as well as the processing and life cycle of the product. “We are seeing a growing concern about the amount of packaging waste being sent to landfill. The modern day consumer is engaging both his head and his heartwhen deciding which brand to support, and will resist brands that are guilty of over-packaging or taxing the environment,” Muller says.

Although still a relatively new addition to the packaging environment, environmental credentials are becoming an increasingly important motivating factor for consumers, brand owners and retailers.With packaging making up more than 50% of the total plastics consumption in Africa, visible litter, continues to be a huge problem.

“Having a sustainable and environmental packaging alternative is more than just a vague ‘green movement.’ Successful brands around the world are consciously implementing eco-friendly actions aimed at reducing their carbon footprint and environmental impact. Steps they are taking include using more recycled materials, cutting down on excess packaging through light weighting, and reusing more package components. They encourage their suppliers, contract packagers, and distributors to do likewise and are using these measures to gain consumer approval and a marketing advantage,” Muller says.

As consumers become more discerning about the products they buy, the demands are being placed on packaging manufacturers to develop smart or intelligent solutions that increase shelf time, reduce food wastage and improve the appearance of the product. Some of the latest technologies employed in modern packaging solutions include: odour absorbers; moisture control / indicators; physical damage indicators; temperature responsive packages; flavour releasers; self-heating containers (i.e. food packaging that cooks itself through the use of wireless technology integrated into the packaging); self-chilling containers, e.g. temperature drops 30 degrees in minutes; thermoformed fruit container with ripeness indicator; smart pharmaceutical packaging, e.g. blister packs that are divided into 2 halves to denote morning, evening medication, the use of “Dial Vials” or closures that indicates when the last dose was taken (after each opening the dial rotates); bottles for the visually impaired - screen printed Braille; and “Made In Transit Packaging”, i.e. food continues to grow during transit to ensure optimal in store readiness

Addressing the food waste challenge

The issue of food scarcity and food wastage is one of the biggest challenges facing the packaging industries around the world today. In South Africa alone, the population is expected to have grown to 59 million people by the year 2030, and the question is being asked whether plastic packaging has a role to play in ensuring enough food is available to feed this amount of hungry mouths.

According to South Africa’s Council for Scientific and Industrial Research (CSIR), waste across the food supply chain is estimated to be in the region of 10 million tonnes per annum. This equates to approximately 30% of the country’s agricultural production or around 177kg per capita and a cost of R61.5 billion per year (2.1% of the country’s GDP). Globally, it is estimated that between 30 % and 50% of all food produced is wasted before reaching consumers.

“Modern plastic packaging solutions can play an important role in preventing wastage by extending shelf and preventing damage or breakage between the manufacturer and its final destination at the consumers’ homes,” Muller says. Thanks to the latest innovation, plastic packaging is able to prevent contamination caused by dirt or spillage, preserves the content by protecting it from climatic conditions such as water or heat, and reduces theft and pilferage.

Conclusion

Manufacturers of plastic packaging solutions have many opportunities but there are a number of challenges that would need to be addressed if the plastics industry is to make the most of this growth in the market and meet new demands for innovative and competitive packaging solutions.

Plastic manufacturers need to try and create economies of scale by increasing their production runs in order to supply the packaging solutions to not only their own, immediate market, but also to neighbouring countries. “In South Africa, for example, we currently have only a few raw material producers manufacturing a full range of materials, compared to the situation in Europe where there are various plastic manufacturing plants who even specialise in specific production runs. African countries are ideally positioned tofoster alliances that can develop into ‘best in class’ manufacturers and experts as cross-border transportation and infrastructure improves. The bigger the production run, the lower the production cost will be and the more profitable the industry will become,” Muller says. “We need to consciously develop an African focus that is open for cooperation if we are serious about becoming competitive and stemming the threat of cheap imports from the Far East,” he says.

One of the biggest threats facing the plastics industry in South Africa and the rest of the African continent is the lack of technical skills. “Many of the industry experts, who currently run the manufacturing and converting plants and possess the technical expertise, are all on the verge or retirement. We need to encourage and develop new initiatives that will attract a new generation of technical experts and empower them with this knowledge before it is lost to us forever,” the PACSA Executive Director says. Apprenticeships need to be encouraged for the plastics manufacturing and converting industries as a matter of urgency.

Plastics packaging manufacturers in South Africa, in particular, have to compete with international players who are able to borrow money to fund their operations at very low interest rates. The current macro-economic climate makes it financially very difficult for a manufacturer, converter or recycler to purchase a new machine or expand his business.

As was mentioned in the point above, plastics manufacturers are fighting a difficult battle to keep their heads above water. High operating costs, escalating electricity tariffs, labour costs etc. all contribute to a financially strained environment. Local government should assist this priority sector to access more funds and protect the profitability of the industry. Also, due to the lack of available funding and escalating costs associated with research and development, very little product research and development is currently taking place in the region compared with a few decades ago. “We need to keep abreast with global trends and technologies – we also have to invest in developing our own unique products that have been created specifically with our own needs in mind and that allows us to make maximum use of the local resources and technology available,” Muller warns.

One of the biggest threats facing the industry today is the amount of finished plastic products that are being imported into the region. Every finished component of any given product that gets shipped in, instead of it being locally assembled and finished off, takes away a job and an income from somebody who could have been employed in the local market. The governments are then urged to protect their own industries and allow them to be more competitive if they are to survive this foreign assault.

Another issue is the growing pressures from shareholders that pushed businesses into becoming increasingly short termed focused. This needs to change by creating a value shift away from a cost-driven mentality to being benefit driven and long-term focussed.