The document discusses key trends in the food packaging industry between 2016 and beyond. It identifies five major trends: 1) Increasing importance of design and shelf appeal to stand out, 2) Increasing competitive intensity driving cost focus, 3) Growing focus on sustainability and environmental friendliness, 4) Intelligent packaging solutions continuing to develop, and 5) Increased e-tailing volumes driving new packaging demands. These trends will impact brand owners, retailers, and logistics providers by requiring more efficient and sustainable packaging designs that enhance the consumer experience both in stores and online.

1. The packaging industry continuously evolves. End-consu-
mer preferences are changing, sustainability is growing in
importance, and brand owners are increasingly fighting for
shelf-space. There is fierce competition among both retai-
lers and brand owners, leading to strong focus on cost ef-
ficiency. But how will packaging be affected by the ongoing
developments and trends? What will brand owners of the
future consider as critical when assessing and eventually
selecting their provider of packaging solutions? This view-
point will discuss potential developments and underline key
areas for the food packaging industry in 2016 and beyond.
Introduction to the food packaging
industry
The food packaging industry is broad and includes a wide
array of segments, packaging alternatives, and packa-
ging materials. Dominant end-use sectors include proces-
sed food, fresh food and beverages. The three dominant
packaging alternatives used are primary, secondary, and
tertiary: primary packaging is used in direct contact with the
Food packaging viewpoint - 2016
and beyond
products; secondary packaging combines several primary
packages; and tertiary packaging is used for transportati-
on purposes by combining several secondary packages.
Of the total global packaging market, fibre based mate-
rials (including corrugated, carton, liquid carton, etc.), rep-
resent 31% of the total value. Within corrugated materials,
food is the largest end-use market, accounting for about
40% of the total consumption. The total global consumption
volume of corrugated board is projected to grow at a CAGR
of 4.3% up to the year 2017 (Smithers Pira: The Future of
Global Markets for Corrugated Board Packaging to 2017).
This viewpoint will focus primarily on packaging aimed
at protecting and transporting a product, i.e. secondary
packaging. However, as there are commonalities with other
types of packaging as well, several of the conclusions will
be valid also to primary packaging. We will also address
those aspects where the packaging has an additional pur-
pose to, e.g., communicate a message, create awareness
or to support differentiation of food products.
Stora Enso viewpoint 1/2014
viewpoint

2. viewpoint
The food packaging value chain
Value chain dynamics – i.e., the power play between the diffe-
rent value chain steps – continuously evolve over time. From
a packaging perspective there are at least six specific deve-
lopments:
1. Retailers generally gain more power as markets mature. In
mature markets, e.g., Finland, Sweden, the UK, or Fran-
ce, retailers already dominate the value chain; in emerging
markets, however, e.g., in Russia, brand owners still tend
to have a relatively strong position. However, this situation
is likely to change as retail consolidation moves forward and
retailers begin to more aggressively promote their private
label products as in mature markets.
2. Evolving consumer behaviors also impact the value chain.
Increasingly informed, demanding, and value-oriented con-
sumers exert price pressure on the retail market, pushing
the already fierce competition amongst brand owners and
retailers even further.
3. The role of logistics providers will grow as a potential lever
for operational efficiency. The trend of increasing product
and packaging variations, further enhanced by the growth
of online retail, will make the need for efficient logistics so-
lutions even stronger.
4. The growth of online retail will be a game-changer in food
retail, as it opens a completely new competitive dimension.
This will not only affect retailers and online operators, but
also other players in the value chain that have to adapt to
the new requirements and online-tailored solutions genera-
ted by this development.
5. Consumer demands for more sustainable solutions com-
bined with intensified regulatory requirements regarding ex-
tended producer responsibility will affect the whole value
chain going forward. New legislative measures may focus
on taking responsibility for used products and subsequent
management of waste with financial responsibility. Therefore,
material choices are likely to be reevaluated.
6. Brand owners are squeezed by strong retailers and try to
differentiate their offerings. One area that receives specific
attention is how to extend the shelf life of food products,
where also packaging is a major influencer.
Overview of key trends and their implica-
tions
The food packaging industry faces five major trends that will
affect the future of the respective players in the value chain.
1. Increasing importance of design and shelf standout: In
the increasingly competitive retail landscape, differentiati-
on and product standout will grow more important. Brand
owners and retailers alike are increasingly fighting for con-
sumers’ attention at point of sale, and use packaging as a
tool to do so. Secondary packaging will grow in importance
as a brand vehicle and retailers and brand owners will inc-
reasingly invest in higher quality printing and differentiating
design solutions.
2. Increasing competitive intensity in the value chain drives
cost focus: The increasing competitive intensity will drive
the players in the value chain to cost reduction measures
and optimization of their operations. Packaging and related
logistics solutions will be part of these measures.
3. Sustainability and environmental friendliness are gro-
wing in importance: Increasing end-consumer pressure
and intensifying regulations in the area will lead to an in-
creased focus on environmental aspects throughout the
value chain. Retailers and brand owners alike are upping
their game, changing sustainability from a buzzword to an
actual business issue.
4. Intelligent packaging will grow stronger in the future:
Intelligent packaging has been an important topic for many
years, and will be just as important in the future. Solutions
like RFID, sensor technology, etc., have emerged in some
markets; the trend has not been as strong, however, in
smaller markets like Finland and Sweden, it will still take
time before brand owners and retailers implement these
solutions on a full scale.
5. E-tailing volumes will continue to increase: Online food
retail will experience strong growth in the future, driven by
consumers’ requirements for convenient and time-saving
alternatives for grocery shopping. This will lead to new de-
mands regarding transport packaging as it will need to en-
sure that the food has been safely handled and is free of
tampering, at the same time as complex logistics challenges
have to be addressed.
These trends will have implications for all players in the
value chain, but to different degrees. As brand owners are the
focus of this viewpoint, they will be covered in detail in the next
section; the effects for retailers, online retailers and logistics will
be covered in brief here.
Note: CCM = Corrugated Case Material
Contract
filling
/packers
Logistics
providers
Brand
owner
Logistics
providers
Consumer
Converting
(incl.
corrugation)
Warehouse
Wholesale
RetailDesign
Online
Retail
Recycled
fibre
Virgin
fibre
Recycled
CCM
Virgin
CCM

3. viewpoint
Retailer’s future outlook
Competition will continue to be fierce in the retail segment,
making cost the center of attention. To increase profitability
retailers will increasingly look for solutions to improve in-store
efficiency, e.g., shelf-ready packaging that is easy to unpack,
easy to handle, and easy to dispose of. Post consumption is
an area that retailers are focusing on, demanding thinner and
lighter secondary packaging in order to save space. Ease of
disposal is important also from a retail staff perspective, as
handling used boxes is considered as unergonomic and time
consuming. Further, retailers will increasingly seek logistics-
friendly packaging solutions through which they can optimize
stock-keeping, call-off times, pallet use, and other aspects of
their operations.
Secondary packaging will not only assist retailers in redu-
cing cost, but will also be important from a brand point of view
as retailers increase their private label portfolios. The growth of
private labels will lead to a change in relative importance bet-
ween primary and secondary packaging. Secondary packa-
ging will increase its presence in in-store logistics. The packa-
ging providers will need to meet this trend by differentiating
designs in order to secure shelf stand-out and point-of-sale
effectiveness.
The growing share of online sales will affect retailers dra-
matically, opening a totally new channel to interact with consu-
mers. Retailers now become responsible for ensuring that the
ordered products are delivered intact and in good condition to
the consumer. In order to respond to this trend, retailers may
strengthen their competitive position by securing that the on-
line channel and offered services are well interlinked with the
physical stores to provide one integrated customer experience.
Packaging plays a very important role in achieving this.
Besides securing online sales, retailers need to handle
the cannibalization effect online has on physical store sales.
Especially traditional retailers, who have made large capital in-
vestments in store networks, need to address the risk of lower
capital utilization as sales shift online and as a consequence
reduces the space requirements in traditional stores.
Further, retailers are increasing their focus on sustainability
and environmental issues in order to manage consumer de-
mands and regulatory requirements. Retailers will focus even
more on environmentally friendly products, making their stores
more sustainable, and reducing food waste. They will also work
more actively with supplier requirements in order to ensure sus-
tainability in the whole value chain.
Online future outlook
The role of secondary packaging in transport will be increased
significantly. The products must be transported in a safe man-
ner, imposing new structural demands (e.g., liquid/moisture
resistance features) on packaging. Consumers, in turn, are in-
creasingly expecting shorter times between order and delivery,
creating challenges for both packaging and product producers.
As a consequence, there will be an increasing pressure on fle-
xibility of deliveries.
Packaging solutions have potential to be further optimized
for online logistics. As a consequence of increased individuali-
zed orders, the demand for flexible and multipurpose packaging
will increase. Thus, the balance between an one-size-fits-all so-
lution and tailored secondary packaging has to be optimized.
Brand owners state that they have so far been less impacted
by online demand and that the challenges lie further down
the value chain. However, it is likely that retailers of the future
will impose demands on brand owners to develop packaging
systems and solutions optimized for online distribution, in the
same manner as they today impose requirements for efficient in-
store packaging through, e.g., retail-ready packaging features.
Logistics future outlook
Logistics is expected to gain importance in the overall value
chain. Safe and secure transportation of goods has to be en-
sured at same time as tackling the new supply chain challen-
ges. Lowering food waste will be one of the real challenges of
the logistic flow of food. The growth of online retail, discussed
above, will set new requirements on the logistics operations.
Current solutions, including packaging solutions, will not suf-
fice in the new environment, but need to be adjusted and ret-
hought. By providing smart packaging solutions the efficiency
of the logistics operations can be increased. Improvements
such as optimized loading/ filling, stacking, and weight reduc-
tions can be used to drive costs down and make operations
run more smoothly. Automated and integrated supply chain
set-ups will be further elevated as means of end-to-end opti-
mization. Examples of such efficiency improvement measures
applied today include just-in-time methodologies (JIT), vendor
managed inventories (VMI), and electronic data interchanges
(EDI). Flexibility and ability to adapt to changes will be increa-
singly important in the future, both for logistics players and
packaging providers.
Key success factors
The trends discussed above, and their impacts at stages further
down the value chain have implications for how a brand owner
should act. Success will come from focusing on at least five di-
mensions. Consequently, packaging providers must ensure that
these five dimensions are addressed to support brand owners.
Text
Support
brand value
building
Optimize
operations
Reduce
cost
Enable basic
functionality
Communicate
the value of
being
sustainable
Key success factors for
packaging in 2016 and
beyond:

4. 1. Enable basic functionality
Basic functionality is about meeting the agreed requirements
and having the needed capabilities to qualify for the order. The
main task of packaging in the food industry is providing security
and protection for the products throughout the supply chain.
To deliver basic functionality at the correct level the following
areas should be considered:
2. Reduce cost
It will be increasingly important for packaging to help decrease
costs, both in terms of the packaging itself but also the sur-
rounding cost elements. Cost innovations will come in three
key dimensions:
• Solution: An innovation that redefines the packaging solu-
tion in order to reduce costs is one of the most important
activities of a packaging provider. This type of cost innova-
tion puts the focus on the problems that packaging needs
to solve, adopting a holistic perspective. A typical example
is the integration of primary and secondary packaging.
• Process: An innovation that optimizes how the box is used.
This type of innovation looks at what can be changed in
usage to reduce cost. Examples include redesigning packa-
ges in order to fit more on the same pallet, thus improving
loading capabilities
• Features: An innovation that focuses on improving the ac-
tual packaging functionality. This is the nature of most cost
innovations today. Examples include light weighting or right-
sizing of packaging. Feature innovation calls for thorough
understanding of the entire process, and serves as a basis
for fit-for-purpose package design.
3. Optimize operations
Packaging suppliers are not restricted to delivering the packa-
ging, but they need to assist in enabling customers’ operations to
run more smoothly. Packaging providers may assist in optimizing
the supply chain by providing an array of operations services.
Reliable and flexible inbound logistics
Packaging suppliers may assist in increasing the reliability and
responsiveness of inbound logistics by proving just-in-time (JIT)
logistics set-up with short call-off times, vendor managed in-
ventories (VMI) ensuring availability, and establishing electronic
data interchange (EDI) to exchange data in an automatic, swift
and correct manner. Flexibility and speed are of the essence in
managing fluctuations in demand in an effective way.
Disturbance free production
Securing high utilization of production lines is key for brand
owners, as disturbances and production stops induce high
costs. As the variety of packages increases, the challenges
get even bigger as the packaging line must be able to hand-
le the greater variation but at the same time remain cost effi-
cient. Packaging suppliers can assist with optimizing packing
lines to enable an efficient and flexible production of a high
variety of products. In addition, risk planning and mitigation by
troubleshooting bottlenecks and critical parts of the process,
thus preventing downtime in a proactive manner, will be key in
securing disturbance-free production. This risk planning may
be done in cooperation between machine developers, brand
owners, and packaging suppliers.
viewpoint
Secure
consistent
performance
Meet
requirements
Support with
service
Consistency is a must in several dimensions, e.g., surface
design, structural capabilities, printing performance, run-
ability, and quality of final product. Delivery consistency is
aligned across borders and between different plants.
Products are designed to meet specific customer
requirements, whether they are related to durability and
firmness for protection and transportation or to the ability to
provide solutions for retail-ready packaging to retailers
High reliability and precise deliveries supported
by both flexible and fast responses in case of
production disturbances.
Creating cost innovation in 3 steps:
• Improve what is already there
Features
Process
• Improve how the box is used
Solution
• Look beyond the box to find
solutions that meet the
requirements

5. viewpoint
In-store efficiency
Packaging suppliers play a key role in assisting brand owners
in resolving their customers’, i.e., the retailers’, efficiency chal-
lenges. By suggesting designs incorporating, e.g., retail-ready
packaging features or pallet-optimizing dimensioning, brand
owners may efficiently address the needs of their customers.
4. Support brand value building
Packaging design will receive more focus from a marketing and
sales perspective. Brand owners face fierce competition on the
retail shelves not only from competing brands, but also from the
retailer’s private label introductions. Graphic design and visual
impact play important roles in packaging to help consumers
recognize and remember brands in a competitive environment.
A classical marketing framework recognized at most universities
is the 4P model: product, place, price and promotion. To further
develop this model, packaging also needs to be included, as
packaging plays a key role in differentiating the product in the
stores and attracting attention at points of sale.
In the future, packaging will work as an increasingly important
tool in the brand owners’ marketing mix. In short, the key areas
where packaging will help brand owners are:
• Capturing end-consumer attention at point of sale
• Influence the perceived brand value
• Create brand awareness
• Differentiate products, e.g. economy vs. premium
• Convey green image with a renewable and recyclable
product
• Protection, so both the content and the box looks good
when they arrive
Packaging
Promotion
Price
Place
Product

6. viewpoint
5. Communicate the value of being sustainable
Sustainability considerations will become an increasingly impor-
tant product attribute influencing shopper decisions. Consumer
attitudes towards the environment have changed and this trend
will continue as natural resources are depleted and waste be-
comes a bigger problem. In 2016 and beyond, sustainability
will be a serious theme, no longer merely a word. In particular
packaging providers of corrugated materials can contribute to
making the world sustainable because such materials
• are made from fibre where the origin can be traced
• are from renewable raw materials
• are recyclable
• helps fulfill EU targets with extended producer responsibility
for re-use and the recycling of waste
Adding extra value
So, is mastering these five key success factors, and demonstra-
ting successful cases, going be enough in 2016 and beyond?
We believe that this will only be the baseline for success. We
believe that success stories do not come from reactive respon-
ses, but from proactively providing total solutions. In order to
become a true packaging partner, suppliers need to consider
not only what they can provide, but also how these solutions
are delivered.
The first step to add value beyond supplying a brown box
is to deliver proactivity. In other words, having the capabilities
to resolve the customer’s business issues is not enough if the-
se capabilities are exercised in a reactive manner. A packaging
supplier will need to be able to proactively suggest innovative
improvements based on insights and expertise. Packaging
suppliers must become much more active and constantly strive
to challenge current solutions in order to find new and better
solutions suitable for tomorrow’s needs. A way of becoming
more active is facilitation of joint-development with customers,
e.g., at design studios. Here the packaging solution provider
and the customer have an opportunity to together come up
with innovate solutions for the value chain and the consumer.
In order to be considered a true partner, the packaging
supplier needs to be able to address the total scope of the
customer’s packaging needs, and not be restricted to offering
only selected services. Suppliers will need to challenge them-
selves and adopt a holistic perspective in order to find solutions
that look beyond optimizing only primary, secondary or tertiary
packaging, or providing only one type of material. A solution
includes several components, e.g., exterior, inner packaging,
accessories, or services. Packaging suppliers will need to use
the full scope of the fiber-based portfolio, but also include multi-
material knowledge and solutions, in order to solve problems.

7. viewpoint
Situation
The customer, Epicur, was producing and selling poultry
and eggs in central Russia. The company had started
a project to develop new packaging for eggs under the
brand “Leto”, and requested Stora Enso Packaging So-
lutions’ assistance in developing a new and innovative
solution for the new product line.
Proposal
Stora Enso Packaging Solutions provided a new rigid
structural design, proposing the use of corrugated ma-
terial. The solution also included the development of an
eye-catching and attractive design in order to appeal
to the consumer at point of sale.
Results
• Shelf utilization increased from eight boxes to 11-12 boxes
• Sales increased by 40%
• The new design raised the number of boxes that could be stacked in
one truck by 60%
• The size of the box was reduced by 20%
• The rigid structure significantly reduced the amount of breakage, allowing
the packages to be carried more easily by consumers and securing sa-
fety during transportation.
Increased logistics efficiency Reduced box sizeIncreased sales Shelf space utilization
+40,0%
Sales afterSales before
Sales volume
+60,0%
Boxes afterBoxes before
Filling of trucks
-20,0%
Size afterSize before
Box size
+37,5%
Boxes before Boxes after
Number of boxes fitting in shelf
Case:
Increasing egg sales by 40% through design improvements
Moving beyond the baseline
To further excel, packaging companies must:
• Proactively suggest innovative improvements based on insights and
expertize
• Actively challenge the status quo, push new ideas and find new
technologies that will help customers in their business
Holistic
solution
Proactive
Key
success
factors
Understand the big picture to deliver performance:
• Develop interior and exterior solution
• Find synergies between primary, secondary and tertiary
packaging
• Use the full width of the fiber based portfolio and even
consider multi-material knowledge
The 5 key success factors form the base of a satisfying customer needs:
• These areas show what will be important for brand owners, but to take the next step in
adding value packaging suppliers must also work on how they deliver the 5 areas
“Proactivity would be a real
differentiator for a packaging
supplier”
– Brand owner, packaging
development director
Text
Support
brand value
building
Optimize
operations
Reduce
cost
Enable basic
functionality
Communicate
the value of
being
sustainable
Key success factors for
packaging in 2016 and
beyond:

8. viewpoint
Contacts
Retailer power in the value chain is high, and retailers are projected to continue
to increase their dominance through consolidation and private label introduc-
tions. In this competitive setting packaging is gaining a more important role,
both as a lever to reduce cost and as a tool to increase sales. Moving forward
the food packaging industry will be shaped by five key trends that will have
substantial implications for the entire value chain. These trends are:
1. Increasing importance of design and shelf standout
2. Increasing competitive intensity in the value chain driving cost focus
3. Growth in importance of sustainability and environmental friendliness
4. Future growth in importance of intelligent packaging
5. Continuing increases in e-tailing volumes
Five key success factors can be isolated that will shape packaging in 2016
and beyond:
• Enable basic functionality: the basic need to ensure reliable high-quality
packaging that is tailored to its purpose.
• Reduce cost: there will be a need for innovation in packaging solutions,
processes and features to reduce costs for brand owners.
• Optimize operations: brand owners do not only need a box, they need a
reliable and high-performing packaging operation.
• Support brand value building: packaging design will be increasingly impor-
tant from a marketing and sales perspective.
• Communicate the value of being sustainable: sustainability considerations
are increasingly influencing shopper decisions, and as awareness grows
value must be better communicated.
These areas address aspects that will be important for brand owners, but to
take the next step in adding value packaging suppliers must also work on
how they deliver in the five areas.
• Brand owners will require packaging companies to proactively suggest
innovative improvements based on insights and expertise. Thus, reactive
responses to customer-initiated development activities will not be enough.
• Brand owners will require packaging companies to deliver a total solution
addressing the entire scope of their packaging needs. Suppliers will need to
adopt a holistic perspective, not only providing services within one packa-
ging category or packaging material.
So what is Stora Enso Renewable Packaging offering to meet these challen-
ges and addressed aspects?
• We focus on proactively suggesting innovative packaging solutions for our
customers to enable less weight, less waste, less unused space, and less
impact on the environment.
• We’re happy to provide our global packaging expertise to support our
customers to strengthen their brands with attractive design that stands
out on the shelves, innovative constructions and materials for optimum
performance and lower cost.
• We strive to minimize our impact on the environment and actively work to
help our customers create sustainable resource efficiency. We do this by
using renewable raw materials as well as our own recycling organizations
to take care of our customers’ recycling needs.
Executive summary
Hannu Alalauri
Senior Vice President
Stora Enso Renewable Packaging,
Packaging Solutions
Email: hannu.alalauri@storaenso.com
Björn Thunström
Vice President
Marketing & Customer Loyalty
Stora Enso Renewable Packaging,
Packaging Solutions
Email: bjorn.thunstrom@storaenso.com
Fredrik Stensson
Marketing Manager
Stora Enso Renewable Packaging,
Packaging Solutions
Email: fredrik.stensson@storaenso.com