CPG Packaging Sustainability and Technology Trends

In Nestlé’s R&D department, a tool is identifying entirely new kinds of high-barrier packaging materials. It’s generative AI. 

A growing number of consumer packaged goods companies are starting to deploy artificial intelligence in their packaging design processes. So too are packaging manufacturers exploring how the technology can save time and resources in design and manufacturing.

Nestlé’s researchers feed public and proprietary documents into a knowledge base. Then, they fine-tune the data using a transformer, together with IBM Research, to understand how molecular features in packaging correlate to physical properties. Finally, the AI-based model analyzes the inputs within the set parameters.

“It can identify appropriate materials that are suitable for protecting dry and sensitive foods such as coffee from moisture, temperature swings and oxygen,” a Nestlé spokesperson said via email.

While the use cases are nascent, AI is catching on. A 2024 McKinsey survey of more than 200 paper and packaging executives found that 95% said they believe their companies should invest in generative AI. And 77% said their firms have moderate to strong intentions to use gen AI in the near future. 

How packaging leaders and CPGs are using AI

Tom Egan, vice president of industry services for the Association for Packaging and Processing Technologies, or PMMI, sees “a pretty enthusiastic acceptance” of AI in the industry. He said applications range from logistics to sales and marketing to manufacturing. 

Here are some of the processes in which packaging companies and CPGs are starting to use AI.

New designs and prototypes

One of the notable potential benefits of AI — and among the biggest use cases being explored today — is the ability to assess packaging modifications or updates in a virtual environment.

When a client requests a new design from flexible packaging provider Tradepak, the company inputs the customer’s parameters into its systems, said President Rafael Recao. AI can rapidly pull from databases, synthesize data points, and deliver design and substrate recommendations. Then, packaging leaders make a final decision.

With simulation models and digital twins, AI can look at form factors, examine touch points and predict consumer reactions to quickly generate 10 mockups of a SKU’s packaging, Egan said, rather than physically making and testing each version. 

AI can “analyze this unbelievably large number of data points and provide you with insights,” Egan said, adding that packaging leaders can refine the options from there.

Simulation models can also help to design packaging for the same product in different channels, such as one version for retail shelves and another for e-commerce. AI could determine the best design and protective properties for each channel while ensuring brand consistency, Egan said.

Simulating testing

Colgate-Palmolive is exploring how simulations could validate new designs for components such as bottles, caps and spray pumps, said Sukhdev Singh Saini, global toothbrush and devices packaging lead at the company.

Without AI, “we have to physically make a lot of samples to test,” Saini said. Then, the samples have to be shipped, tested and possibly altered before being sent out for another round of testing. “There is a lot of time involved, a lot of material involved.”

With a simulation model, though, the CPG feeds specs into a system, and AI replicates testing to provide results. Saini acknowledged the tech is still a work in progress and not a 100% replacement just yet.

Jonathan Garini, CEO and enterprise AI consultant at Fifthelement, sees brands using algorithms to simulate how a substrate performs in real-life conditions like humidity or rough handling.

“This not only accelerates the test cycle but also can lower the cost of physical prototyping significantly,” Garini said.

Packaging artwork

Recao said Tradepak uses Adobe Illustrator equipped with AI to make adjustments on colors, design placement and other elements before printing. 

For artwork, Colgate-Palmolive works with Esko software, which uses automation throughout the packaging go-to-market process. The use of AI in artwork management has improved quality while saving time, Saini said.

Without the system, the CPG would have to individually search previous artwork details to make even minor modifications. But now, the person who manages artwork can receive data in minutes and make decisions more efficiently. In a major run of 50 or more SKUs, Saini said Colgate-Palmolive has cut down the development time by 60% to 70%.

Assessing recyclability

Colgate-Palmolive has partnered with Glacier on an AI-based system for sorting toothpaste tubes at recycling facilities. The CPG can view a dashboard that shows toothpaste tube materials and their recyclability, along with tube recycling behavior in various cities.

With more states adopting extended producer responsibility programs, Saini anticipates “a lot of work being done on recyclability.”

Another generative AI use case that McKinsey noted in its report is to enhance visual inspection systems for waste, in order to improve the quality of recycled paper and cardboard.

Manufacturing, production and maintenance

Many CPGs use computer vision, optical systems and imaging technology on production lines. It’s not a new phenomenon, but machine learning is “taking it a couple of notches up” with AI-based features that improve quality management systems, Saini said.

At Nestlé, high-resolution imaging technology monitors lines for quality assurance. 

“Through machine learning, these technologies can anticipate issues on the production line, and provide appropriate recommendations, such as preventative maintenance or cleaning,” Nestlé’s spokesperson said. 

Recao uses augmented reality glasses to connect with manufacturing facilities in Europe so Tradepak can monitor any equipment issue in real time.

“We save a lot of time,” Recao said. “We resolve the problem quickly.”

What’s next with AI in packaging

It’s still early days for AI in packaging, and many areas remain untapped to their fullest potential. Garini sees AI being used to predict how consumers perceive packaging, and how that affects sales, including the use of packaging as a communication tool.

“Models now are being trained to predict how form factor, texture and color all play roles in shelf appeal and online conversion,” Garini said.

There are also some barriers to adoption. 

Implementing new technology requires change management and for employees to embrace and trust the system. Cybersecurity could be a concern with AI models receiving proprietary data, and software subscriptions can be expensive, Recao noted.

AI outputs are only as good as their inputs, which means organizations need a solid foundation of data, Egan said. In fact, McKinsey’s survey found that limited access to a modern data tech stack was the top limitation in AI implementations.

But CPGs and packaging manufacturers remain bullish on AI’s potential.

Nestlé envisions its technology will help to scale packaging solutions across more categories. Saini believes the tools Colgate-Palmolive uses will save resources and improve recyclability. Recao said there’s always more advanced AI that can apply to robotics and machinery. 

“Right now, the potential of AI in our industry is enormous,” Recao said. “The sky is the limit.”

Private label presence in retail markets is growing, and so too are opportunities for packaging companies who serve those customers, according to speakers on Nov. 20, 2025, at the Private Label Manufacturers Association's annual trade show.

Circana data shows store brands outpaced national brands both in unit and dollar sales in the United States through the first 11 months of 2025, said PLMA President Peggy Davies. Store brand unit sales grew 0.4% during that time while national brands declined 0.7%. And store brands rose 3.6% in dollar sales while national brands grew just 1.1%.

Store brand market share is 23.1% of unit sales and 21% of dollar sales, Davies said. PLMA projects that store brand product revenue will increase from $272 billion in 2024 to $280 billion in 2025 — which would be an all-time high.

Shelf-ready packaging core to grocery

The effects of that growth are trickling through the supply chain and touching packaging manufacturers, which speakers said are integral to the private label ecosystem.

“Private brand is core to who we are. Shelf-ready packaging is core to who we are as well,” said Joel Rampoldt, CEO at Lidl US.

Lidl strives to be a low-cost grocer, and shelf-ready packaging is crucial to that business model. In part, it allows the grocer to maintain minimal staffing by enabling associates to pack out shelves efficiently.

“Why stack one can at a time when you can put a flat of 12 on all at once? It's simple, easy to replicate, easy to execute,” he said. “We're never going to be a high-touch, high-service shopping experience. We keep our operating expenses as low as possible and plow it all back into the customers.”

Rampoldt said shelf-ready packaging also aids the consumer experience. 

“Shelf-ready packaging, when done right, is actually a selling point. When it looks right, the colors are right, it's on brand, it's attractive, it helps us sell more of your products,” he said. Without it, “our customer doesn't know what it is, finds it hard to reach” and can't get in and out of the store quickly. “When we do it well ... it looks phenomenal, and it sells.” 

One reason for private label growth is consumers’ propensity to trade down during a period of cost pressure and economic uncertainty, according to several of the 1,900 exhibitors at the PLMA show. Consumers’ shift away from name brands and toward lower-cost store brands has come up repeatedly during packaging companies' earnings calls over the last year.

Highlighting innovation and partnerships

Numerous packaging manufacturers are trying to harness the growth in private label by forging partnerships with product makers and co-packaging businesses. They showed off solutions and newer innovations at the trade show, especially packaging products suitable for food, beverage and food service markets. 

Accredo Packaging spotlighted its flexible packaging and printing capabilities to serve private label manufacturers, and specifically co-packers. Numerous trade show speakers and exhibitors talked about the importance of co-packing to private label, such as to provide quality consumer products at reasonable price points. 

British Columbia-based WJ Packaging Solutions displayed flexible packaging innovations such as pet food bags with clear windows that allow the consumer to view the product inside, as well as monomaterial recycle-ready pouches. A representative noted that packaging innovation often occurs first for higher-end products, because the margins are more favorable, and then it moves toward more budget-friendly products. 

Representatives for Ohio-based AeroFlexx demonstrated the company’s flexible, capless squeeze packs, including two introduced recently: for Boogie’s vapor bath and Furminator’s pet shampoo. 

Representatives at Seda’s booth detailed the Italian packaging company's desire to achieve more business in the United States, particularly in the ice cream market with fiber-based tubs that have PLA coatings. The company also showed off its double-walled fiber cold cup and compostable fiber lid developed for Starbucks.

PakTech’s booth highlighted various plastic lids and multipack carriers that contain postconsumer recycled content, including the newly released PakLock child-resistant cap for use on cans containing beverages infused with cannabis. Employees explained that state regulations could soon require such safety locks on individual servings of infused beverages, and the company is ready to scale up PakLock production to meet the demand — whether for branded or private label drinks.

Huhtamaki’s booth displayed a variety of the Finland-based company's fiber packaging products, such as food service ware, as did Michigan-based AJM Packaging. Pennsylvania-based PaperWorks featured 100% recycled fiber food service containers made with UltraShield, its water-based barrier coating that is oil and grease resistant, and representatives explained the potential for the innovation’s use in branded and private label applications.

“Consumers are telling us loud and clear: They want quality, they want innovation and they want value,” said Kristal Sevcik, PLMA board chair. “Private label isn't just competing; we're leading.”

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By Specright

Innovation in the food and beverage industry used to move at the relatively leisurely pace of manufacturing investments and annual retailer resets. Today, it moves at the speed of viral social media trends, sudden ingredient disruptions and a tightening web of global regulatory requirements.

Brands are now expected to constantly reinvent their portfolios—removing sugar or sodium while preserving taste, incorporating functional ingredients like probiotics and meeting overlapping lifestyle claims such as gluten-free or keto-friendly. At the same time, climate and geopolitical events are driving supply chain volatility, forcing a steady stream of rapid reformulations just to keep existing products on the shelf.

While marketing, operations and supply chain departments have undergone massive digital transformations to handle this modern complexity, many R&D teams remain "analog islands." Despite millions invested in enterprise software, the primary tools of the trade for many food scientists are still a fragmented patchwork of spreadsheets, disconnected nutrition software, shared drives and email threads.

This mismatch has created a structural innovation bottleneck that caps how fast, and how confidently, a brand can move.

The Hidden Cost of Disconnected Workflows On paper, using a spreadsheet for a formula seems flexible and familiar. In practice, it creates "shadow systems" where critical institutional knowledge is locked in fragile macros or local desktop folders. When formulas, specifications and labels live in separate universes, every minor ingredient tweak becomes a manual, risk-prone mini-project.

For a mid-market manufacturer, the operational impact of these disconnected tools is significant:

• Wasted Technical Talent: Highly trained food scientists and regulatory experts spend a surprising share of their week on low-value tasks like fixing broken macros, copying data between systems or hunting for the latest PDF. Across a team, this manual data handling can tie up 20% to 40% of total capacity—time that should be spent on true formulation problem-solving.
• Elevated Compliance Risk: In many organizations, labeling and regulatory checks happen after R&D has already invested significant time into a formula. If a change affects nutritional thresholds or allergen declarations, the issue often surfaces late, resulting in "fire-drill" launches and costly rework.
• Reduced Iteration Speed: A simple ingredient adjustment requires updating spreadsheets, exporting data to standalone nutrition tools and initiating new email threads for approval. Individually, these steps take hours; across a pipeline of new products, the delays compound into months.

The Shift Toward Centralized Product Data Many companies believe they are digitized because they utilize a Product Lifecycle Management (PLM) or ERP system. However, these tools are inherently manufacturing-centric. They excel at managing finished goods and static documents but they often lack the flexibility to handle nested formulas, complex ingredient hierarchies and the rapid, iterative changes inherent to early-stage experimentation.

To break the bottleneck, industry leaders are shifting toward a data-centric formulation stack. In this environment, ingredients and formulas are treated as live, interconnected data points rather than static text on a PDF. When a supplier changes a specification, that single adjustment automatically ripples through every dependent formula, updating nutrition panels and allergen declarations in real-time. Compliance shifts from a late-stage gate to a built-in guardrail.

Integrating Intelligence into the Formulation Workflow As artificial intelligence becomes more prevalent in R&D, its utility depends entirely on the quality of the underlying data foundation. AI is most effective when it moves from a gimmick to a built-in utility—augmenting scientific judgment by suggesting ingredient substitutions or simulating the impact of a formulation change on nutrition and cost before a single sample is made on the bench.

By moving from reactive data management to a connected, single source of truth, R&D teams are reclaiming their capacity to do what they do best. As product portfolios grow more complex and reformulation cycles accelerate, the ability to manage formulation data efficiently has become just as critical to food innovation as the ingredients themselves.

Stress levels are high for CPG companies and packaging groups as extended producer responsibility programs unfold in multiple states.

This was on display at three Boston events hosted by the Sustainable Packaging Coalition, How2Recycle and the Northeast Recycling Council, with questions flying about costs, policy harmonization and relationships with regulators.

Paul Nowak, executive director of GreenBlue, adopted the role of support group leader for a room full of representatives from many of the world’s largest CPG companies in his opening talk at SPC Advance. He reminded them that “you are not alone” and urged them to take the long view on this major industry shift.

“What you see at the end of the change is not what you see during the change,” said Nowak, drawing on examples from prior industry shifts as well as other major life events. “You are in this uncomfortable period right now where it's not moving as rapidly as you would think and you don't have the historic perspective yet of where it could go.” 

Sticker shock

While CPGs are familiar with EPR costs from programs in other countries, the complexity and scale of the U.S. rollout in seven states is presenting its own unique challenges.

Oregon is the only state that’s begun collecting fees, and already the costs are high. Circular Action Alliance, the producer responsibility organization selected for the majority of state programs to date, estimates a budget of $188 million in the program’s first year, with that figure growing in the years ahead. 

Charlie Schwarze, board chair for CAA and senior director of packaging stewardship at Keurig Dr Pepper, said the costs are starting to resonate with major companies. KDP, for example, has been working to sort out different aspects of its packaging in terms of licensing arrangements, private label manufacturing partnerships and other factors. This requires a close relationship with the company’s finance, R&D and procurement teams to gather data and make cost projections.

“It's been a bit of a slow-moving process because the dollars, at least in 2025, are not extremely notable. But they're going to get bigger pretty quickly,” he said, citing Colorado and California’s programs on the horizon.

Shane Buckingham, chief of staff at CAA, said it will be months until companies have a better sense of the true costs. The group set initial fees for California, which won’t be invoiced until August 2026, but those fee levels are expected to change once SB 54 regulations are finalized.

“Please don't take our early fee schedule of being indicative of what your cost will be in 2027, it's just a drop in the bucket,” he said. "The fees are going to go up significantly in California because we have to fund a $500 million [plastic] mitigation fund, we're going to have system funding to improve recycling, source reduction, reuse, refill.”

SPC Director Olga Kachook encouraged attendees to think about these fees as motivation to innovate rather than a burden. In her view, avoided fees through ecomodulation could be viewed as “possible new investment capital” for covering the costs of material switches, R&D, MRF testing, consumer education campaigns and more.

“We can innovate to those lower fees by switching to incentivized materials and formats and then we can reinvest the savings back into sustainable materials and infrastructure that seemed out of reach,” she said.

Searching for harmony

All three events also featured ample discussion about if or how aspects of current EPR programs could be better aligned. While regulators are working to align certain definitions where possible, they also noted that certain state programs were uniquely designed for a reason.

David Allaway, senior policy analyst at the Oregon Department of Environmental Quality, said during NERC’s Rethink Resource Use Conference that he sees a potential benefit to harmonizing ecomodulation approaches in some cases. But at the same time, he said, “I fear that the push for harmonization will lead to a race to the bottom” by potentially limiting the ability for states to craft policies based on their respective needs.

As for those who critique other unique aspects of Oregon’s law, such as responsible end market requirements, Allaway said “that’s not negotiable for us,” as market issues were a leading motivation for the law in the first place.

Allaway said Oregon’s system was established based on specific regional priorities, such as putting an end to exporting certain types of material that led to dumping in other countries. The state’s approach to ecomodulation and life cycle analysis is also informed by years of work on greenhouse gas inventories and consumption-based accounting, which challenges many commonly held assumptions about recyclability.

Each state has its own unique factors in terms of collection access and market infrastructure. Colorado, for example, has many areas that will be getting recycling service for the first time. Maine also has many rural areas that previously had access to recycling but lost it in recent years. Meanwhile, in Maryland, collection service may be more common but local end markets are lacking for certain commodities.

Jason Bergquist, vice president of consulting firm RecycleMe, said during the NERC event that he hears concerns from clients about where this is all headed.

“If we get to a couple years down the road and we’ve got, let’s just pretend, 25 states with EPR, with different deadlines, different [covered material] lists, different definitions, different ecomodulation — my concern as a fan of EPR is that the pushback will be so significant that it could get existential for the producers,” he said, in terms of costs and compliance management.

At the same time, Bergquist said the experiences of packaging EPR in Europe and Canada show it may take years to get toward any kind of harmonized system.

Back at SPC Advance and the co-located How2Recycle Summit, California loomed large throughout the week when it came to these questions.

Karen Kayfetz, chief of CalRecycle’s product stewardship branch, said regulators from different EPR states try to talk to one another as much as possible but in some cases they’re limited by the statutes that created these programs.

“We each have our own legal frameworks we have to work within,” she said. “So harmonization starts with the legislatures, and that is not our responsibility, but it is something that we could see change and evolve over the coming years.”

As all of these complex questions get worked out, Kayfetz reminded attendees that CalRecycle may currently be “the face” of the program but that’s not the long-term goal.

“What would make me the happiest is if you leave here thinking ‘let’s go talk more to CAA.’ Because EPR is a policy mechanism that is meant to be a public-private partnership where the public entity ... is overseeing the PRO,” she said. “They are your partner and we are their police.”

In a separate session, CAA’s Buckingham described the work of ramping up different state fee and reporting programs as building a plane while flying it. The group is working to streamline its own reporting processes as much as possible, but they and others anticipate things will only get more complicated in the near term.

“2026 will bring with it a new set of EPR laws and recycled content laws,” predicted KDP’s Schwarze, “and they're going to be different than what we have right now.”

For some CPG companies, food packaging design strategy is a high-wire balancing act where a product’s convenience and shelf appeal must meld seamlessly with new recyclability regulations.

That’s how speakers characterized the latest food packaging innovation trends during The Future of Food & Packaging Innovation, a virtual event hosted by Food Dive and Packaging Dive on Oct. 15, 2025. 

Speakers from the Consumer Brands Association, SmashBrand and Graphic Packaging International discussed how the food and packaging industries are embracing innovation as consumer trends and extended producer responsibility regulations change over time.

“Part of the magic, and part of the trick, is to deliver something safely and efficaciously to consumers in a way that also balances statutory or regulatory requirements” for recyclability, said John Hewitt, senior vice president of packaging and sustainability for the Consumer Brands Association.

Calculating EPR considerations

In the U.S., seven states have now adopted extended producer responsibility for packaging laws, which have a major impact on how brands are budgeting for and executing on changes to their packaging designs. 

Hewitt said the Consumer Brands Association and its members believe EPR is an important tool to spur investment in recycling infrastructure and raise recycling rates while also helping CBA’s members meet their circularity goals, such as incorporating recycled content into packaging. 

But companies will need to keep track of “seven different sets of recycling rates, seven different sets of recycling rules and seven different sets of program policies and compliance dates and deadlines… If it sounds like a lot, it’s because it is,” he said.

Hewitt estimates nearly 20% of the U.S. population will be under some kind of EPR for packaging law once they all go into effect. “Designing products to meet the statutory and regulatory requirements for those states, balancing consumer demand, protecting the product that goes along with it, ends up being a very complex equation for these companies,” he said.

EPR-related regulations such as ecomodulation will also play into that already-complex equation, he added. Under that formula, when companies switch out packaging materials for a more sustainable choice, they pay less in fees. For example, a brand might trade in an iconic colored bottle for more recyclable clear styles, a move that saves money but might alter shelf appeal, Hewitt said.

“The fees are not inconsequential. When you look at programs like California, the estimates are in excess of $2 billion a year for the consumer packaged goods industry to meet the requirements,” he said.

Adding nuance to sustainability goal strategies

Major brands are also sorting through their strategies for meeting their publicly announced sustainability goals, such as making a package recyclable or incorporating higher amounts of recycled content.

Some major CPG companies have made progress toward their 2025 goals, while others have already announced they will lower their goal thresholds, citing challenges with local recycling systems and other hurdles. That leaves many observers wondering how other major CPG companies’ packaging design strategies could shift in coming years.

Conversations around sustainable packaging strategies certainly haven’t gone away, but they have grown more nuanced in recent years, said Roxanne McSpadden, senior director of new business development at Graphic Packaging International. GPI has seen more demand in recent years for lifecycle assessments so customers can “understand the full impact of the packaging” through multiple data points instead of one or two key metrics, like plastic reduction, she said.

But recyclability is still a key, especially since GPI specializes in paper-based packaging, she said. “We have the benefit of offering a renewable resource … that can become many other products,” McSpadden said. “Obviously, looking for high recycling rates on anything we make is important to us and to our customers.”

Preserving shelf appeal

These factors all come into play as CPG companies update their strategies to make packaging cost less, be more recyclable and also stand out on store shelves. 

A little creative problem solving can help companies embrace sustainable packaging styles while also following new packaging trends, such as brighter colors and packaging that offers a pleasing unboxing experience, said Christy Lebor, strategy group director for SmashBrand. The company offers product and packaging design services, as well as market research and brand positioning services.

One strategy is incorporating messaging into packaging to signal to consumers that the product inside hasn’t changed, but the updated packaging design comes with an environmental benefit, she said. “It tests well when you tell consumers things like, ‘40% less plastic,’ or, ‘less waste, more for you.’” 

These types of short messages are value drivers for consumers “who feel like they are getting an optimized product or something new and different … You typically will get rewarded in the market with increased revenue.”

CPG companies who need to make sustainability changes to their packaging aren’t in it alone, added McSpadden. Suppliers who work in multiple countries, such as GPI, may have insight into materials or components that have worked for other brands to meet strict environmental regulations in places like Europe. 

“Your suppliers can be partners in understanding the impact of making changes if you're being challenged with a certain material or are looking for alternative materials that respond to legislation or your own company's goals,” she said. 

The Ellen MacArthur Foundation recently released the final progress report under the initial phase of its Global Commitment, as it unveiled an updated plastics agenda for businesses pegged to 2030.

The U.K.-based organization launched the Global Commitment in 2018 to engage stakeholders across the plastic packaging value chain to make plastic packaging recyclable, compostable or reusable by 2025; eliminate problematic or unnecessary plastic packaging; grow the rate of postconsumer recycled content across all plastic packaging and increase reusable packaging.

The latest progress report, reflecting 2024 data, shows how companies took steps in those categories, while still falling short of targets.

At this 2025 crossroads, EMF cast some blame on stakeholders that haven’t been part of the push to transform packaging circularity. While signatories reflected 20% of the market, “We need to talk about the other 80% and how to get the entire market to change,” EMF stated in its recent report.

“Over the past seven years, the businesses that stepped up and shared transparent updates on their progress faced the closest scrutiny. The 80% that did not step up however, even the many large players in that group, remained largely out of the public eye, despite, on average, lagging significantly behind those that did,” the report says.

For example, by EMF’s calculation, brand and retailer signatories roughly tripled their share of recycled content in packaging from 4.6% in 2018 to 15.9% in 2024, versus the global markets growth from 3.4% to just 4.2%. 

When launching the updated agenda in early November, EMF reported that businesses representing 20% of the plastic packaging market have signed on to the next phase of the Global Commitment, “setting 2030 targets and publicly reporting on their progress, even as the context in which companies set public targets has become more complex.” Of this group, 37% were CPGs, retailers or food service companies, 29% were packaging producers, 24% were recyclers and 11% were plastic producers. 

These are some of the 2024 data highlights as EMF transitions from the Global Commitment’s “first chapter”:

SC Johnson led the pack of CPGs on virgin plastic reduction. The company reported a 33% reduction in virgin plastic use since 2018, in addition to now using postconsumer recycled content across a quarter of its plastic packaging portfolio.

“We’ve made real progress, but as I often say, I wish we were even further along,” said CEO Fisk Johnson in a statement.

SC Johnson confirmed it’s now working toward 2030 targets to reach a 55% reduction in virgin plastic use (from that same 2018 baseline), achieve 55% recycled content across its plastic packaging, and design 90% of its packaging to be recyclable.

SC Johnson remains a vocal proponent for extended producer responsibility for packaging.

“We’ve learned that voluntary actions, such as using more recycled plastic in our products, can only go so far, unfortunately,” Johnson said, advocating for federal packaging EPR “to make companies, including ours, accountable for improving recycling systems, driving innovation, and funding effective collection programs.

When Casey Keller took the helm as CEO of Green Giant owner B&G Foods four years ago, beans, taco shells and pasta sauces weren’t the only things on his mind.

The CPG veteran wasted little time digging into the 130-year-old company’s packaging, an area he identified as an “opportunity to improve” for the manufacturer of Crisco shortening and Dash seasonings.

“Your primary communication is on the shelf with the consumers,” said Keller, who has worked in the CPG space for 30 years. They are “making a decision in a split second and if you don’t understand how your packaging works in the context of all the choices that they are facing, you’re lost.”

For food and beverage manufacturers, such as B&G, packaging is a valuable tool to influence purchasing decisions, strengthen customer loyalty, increase sales and keep the product fresh.

At least 80% of consumers last year said they bought a new product because the packaging caught their attention, according to data analytics firm BusinessDasher, and nearly three-quarters added that packaging can influence their purchasing decisions.

Roughly half of those surveyed said they switched brands because of the packaging. Companies, not surprisingly, also benefited, with 30% reporting an uptick in revenue after improving product packaging.

However, despite the favorable data, packaging was long an afterthought in the food and beverage sector until recently.

B&G is among the companies that have put renewed thought into their packaging, spending big money to thoroughly test proposed alterations in real-world settings to see how changes would resonate with consumers.

“We might have been a little bit more ‘seat of the pants’ at B&G” when it came to packaging in the past, Keller said. “I think we need to have a little bit more discipline, making sure that our packaging is a priority.”

A scramble to catch up

During the COVID-19 pandemic, manufacturers focused most of their attention on getting products to market and navigating disruptions in the supply chain. Competition wasn’t as fierce since companies were focused on supply and consumers were stockpiling what they could.

But as the impact of the pandemic eased and the flow of products returned to normal, shoppers experienced a surge in inflation that led them to cut back on what and how much they bought. In a cutthroat industry where up to 80% of new grocery store products fail in their first year, CPG companies, more than ever, have obsessed over ways to attract and retain consumers.

Data shows shoppers care about packaging that communicates the product’s benefits, ingredients and value, helping them make quicker and more confident decisions.

In addition, other studies show people are more likely to purchase a product if the packaging is easy to open, reseal and store; is viewed as preserving freshness and safety; and uses premium materials and a design that enhances the perceived quality of what’s inside.

While executives in the food and beverage sector are waking up to the importance of packaging to drive sales, they need to play significant catch-up when it comes to investment.

Sean Bisceglia, CEO of brand packaging and design firm PV&COHO, estimated that about five times more money is spent on perfecting the taste, smell, texture and appearance of the food or liquid than the actual container, bag, or box on the shelf.

“[Packaging development is] decades behind, really antiquated,” he said.

Chris Rowe, a former Mars Wrigley and PepsiCo executive who has been involved with packaging for much of his career, noted he often educates business leaders and marketers on the importance of packaging in growing a product’s sales, using his work with Extra gum and Gatorade as examples.

A decade ago, Rowe helped Mars Wrigley develop new packaging for its Extra mega-pack that included 35 pieces of gum to reduce the chance a person runs out. The food maker — which developed more than 30 prototypes — found customers wanted a recyclable plastic container they believed would keep the unchewed gum fresh and organized. Shoppers also wanted to feel and hear the packaging close securely with an auditory “click.”

The new packaging, which hit shelves in 2016 after about a year of development, proved to be a success, becoming the top-selling gum product at Walmart within 12 months of its launch.

“There’s sometimes just a lack of fundamental understanding [among executives] of the role that packaging plays,” said Rowe, who now uses his more than 30 years of experience in the CPG space to advise companies. “You would think these people, coming through business schools, would have gotten educated on these things. It’s hard to understand why it requires so much upskilling and education.”

Sending a message

Businesses today are facing increased pressure from consumers, shareholders and environmental groups to make their products more sustainable, according to Bisceglia. A key part of that starts with packaging.

As companies spend time and money to make their packaging more environmentally friendly, several are choosing to overhaul a brand's colors, design and messaging at the same time.

“We spend hundreds of millions of dollars on what’s inside the packaging, and [packaging was viewed as] the redheaded stepchild,” Bisceglia said. “Now that the demand is there [from] the clients, we can’t ignore it anymore.”

At Slim Jim maker Conagra Brands, top executives, including CEO Sean Connolly, are involved in packaging throughout the product development process. Employees handling the graphics and food creation work side by side.

Bob Nolan, the company’s senior vice president of demand science, acknowledged that Conagra was “just like every other company” where packaging was largely an “afterthought” until about a decade ago.

“We’ve had screw ups here in the past, in my early days here, so we knew we had to build a better discipline on this,” he said.

Today, the Healthy Choice manufacturer wades through reams of data and gathers insight from behavior scientists and other experts to better understand how people buy food, what sticks in their memory and how they make a decision.

With 95% of purchasing decisions made on autopilot, Nolan said packaging is crucial for grabbing consumers' attention or convincing them to pay more for premium ingredients or products.

In 2017, Conagra launched under its Banquet frozen meals banner a new product called Mega, which included larger portions of everything from macaroni and cheese to country-fried steak. Mega costs nearly three times more than the traditional Banquet frozen meal, which is commonly associated with its low price point.

“We knew the graphics had to do a lot of heavy lifting [to convince consumers] on why should I pay more for this,” Nolan recalled.

To attract and convince shoppers, Conagra made the word “Mega” larger in size compared to “Banquet” and switched to a black color on the box rather than the traditional red.

The amount of protein per serving was prominently displayed in the upper right corner, tapping into consumer demand for the popular nutrient. And instead of a wider-angle shot showing the food inside the box, Conagra chose to highlight the meal up close, with chicken and vegetables oozing out of a pot pie or cheese melting down the side of a bacon cheddar patty.

Mega sales have delivered “exceptional growth” for Conagra, according to Nolan, with early success for the brand prompting the Chicago company to invest more into the offering and launch additional products.

While packaging changes are essential to communicating messages such as value, health or sustainability, companies also need to ensure they're not going overboard.

Suja Life, a maker of cold-pressed juices and shots, refreshed the packaging recently even though sales were growing after finding consumers were confused and overwhelmed with the product's ingredients, health benefits and taste.

Packaging “is the holy grail in communicating what you want” to the consumer, Jamie Berle, director of brand marketing at Suja Life, said. “If they’re not picking [the product] off the shelf, it almost doesn’t matter what's inside.”

Executives updated Suja’s packaging to list fruit and juice ingredients on the front of the label rather than requiring the shopper to rotate the bottle to find them.

Suja also prominently displayed each drink's functional attributes, such as gut health or immunity. It also added a so-called "greens meter," providing shoppers with a little thermometer that indicated the taste profile a person could expect, such as earthy or sweet.

The overhaul, part of a total rebrand that included a new logo and marketing campaign, has paid off. Since last September, Suja has seen double-digit growth, driven by gains in both distribution and velocity.

“There’s always a risk when you change the packaging, especially to that noticeable of a level,” Berle said. “We did a lot of research. That’s how we minimize the risk.”

When packaging changes go wrong

Mike Kostyo, a vice president at consulting firm Menu Matters, said while packaging is “clearly an opportunity” for brands to stand out, there is a hesitation among some companies to change it.

Refreshing packaging is often an expensive and time-consuming process, which only serves to increase the amount of risk that businesses face. Some companies fear rolling out a new product design will leave them vulnerable to consumer criticism — especially with the threat of a backlash being magnified on social media, where blunders can take on a life of their own.

“Brands are reticent to make a change because they are worried that it will happen to them,” Kostyo said.

Two of the most high-profile mistakes in recent memory include a pair of PepsiCo brands, both of which caused sales to plunge.

In 2009, PepsiCo’s Tropicana brand spent $35 million designing and communicating changes to its packaging, where the image of an orange with a straw sticking out of it was replaced by a large glass filled with juice.

Loyal consumers wasted little time blasting the new design, with sales plunging 20% in just a few weeks, according to Malu Design, a consulting, design and branding firm. Less than two months later, Tropicana abruptly announced it would go back to the prior packaging.

The campaign cost Tropicana more than $65 million and caused the brand to cede market share to competitors such as Coca-Cola’s Minute Maid, Malu found. PepsiCo has since divested Tropicana.

A year later, the snack and beverage giant’s Frito-Lay division introduced a compostable Sun Chips bag made from biodegradable plant material instead of plastic. While the company’s sustainability mission was well-received, the loud, grumbling noise of the new packaging was a major distraction for consumers who said it reminded them of a jet engine or a lawn mower.

Sun Chips later discontinued the packaging, but with its image still tied to environmental sustainability, the snack maker went to work developing quieter, but still planet-friendly packaging. The new bag debuted in 2011.

The chance to make package design cheaper, more efficient and ultimately successful has created an opportunity for companies such as PV&COHO. The firm has worked with food giants such as PepsiCo, Kraft Heinz, Mars and Nestlé to bring the robust, data-intensive process that has dominated food and beverage product development for decades to packaging.

To do that, PV&COHO not only employs graphic designers, but it also augments its design team with engineers, consumer insight strategists and prototyping specialists who cover everything from structural feasibility and material innovation to behavioral testing and shelf impact.

PV&COHO also has its own equipment that enables it to create physical packaging prototypes within a few hours, helping shave months off the development process timeline and potentially saving companies millions of dollars in the process.

Bisceglia said while there has been a “massive shift in how seriously” companies approach packaging compared to 30 years ago, there remains a noticeable “gap” where some firms treat [packaging] “as an afterthought or a cost to manage, rather than a growth lever.”

“We need to keep pushing the narrative that packaging should be more than just a container,” Bisceglia added. “It's a critical brand touchpoint and a powerful tool.”