An overwhelming 99% of consumer packaged goods (CPG) and foodservice brand owners plan to make changes to their packaging over the next three years, with sustainability initiatives driving nearly half (48%) of these decisions and aesthetic improvements such as color and shape changes close behind at 41%, according to L.E.K. Consulting's eighth annual CPG and Foodservice Brand Owner Packaging Study.
"Packaging continues to be a cornerstone of brand strategy," says Thilo Henkes, managing director at L.E.K. Consulting and co-author of the study. "Not only does packaging convey the brand's message, but it's a very small portion of spend relative to total retail value, making it an especially compelling investment."
Key takeaways:
· Foodservice companies are also changing packaging substrates, primarily driven by sustainability goals (83%), food safety or compliance needs (54%) and the need for better durability (46%).
· While packaging is recognized as highly important to brand success by 98% of respondents, survey responses indicate a lot of room for progress as major planned investments are on the near horizon.
· 91% of brand owners use multiple suppliers for each packaging format. The primary motivations are cost competitiveness (49%), supply chain risk reduction (48%) and shorter lead times (46%).
· By 2028, the percentage of packaging across surveyed end markets sourced from outside the United States is forecast to be 10%, half of 2019 levels. This is driven in large part by the resilience advantages of domestic supply chains and the tariff risk facing imported materials.
· Digital adoption is accelerating across the packaging value chain, with brand owners planning to significantly increase usage over the next three years.
· Currently, 79% of brand owners have implemented B2B customer portals, and 73% use traceability features. These figures are expected to reach 94% and 92%, respectively, by 2028.
· While 74% of brands currently use AI for product development and 69% for procurement and sourcing, planned expansion is significant: customer-focused marketing AI usage is set to jump from 52% to 88%, while product performance monitoring will increase from 57% to 90%.
· Foodservice companies are particularly focused on sustainability-driven packaging changes, with 84% noting environmental impact as a primary consideration when selecting packaging. Among the 79% of foodservice organizations that changed packaging substrates in the past three years, meeting sustainability goals was the top reason for 83% of them.
· Packaging innovation is another big focus for foodservice brands, with 72% of brand owners investing in innovation over the past three years. That number is expected to rise to 79% through 2028. Packaging innovations are primarily focused on cost efficiency (81%), transitioning to sustainable materials (69%) and increasing use of tamper-evident or secure packaging (60%).
