Innovation in Food and Beverage Packaging:

Unwrapping the Internal Environments

Last year, our Unpacking Innovation in 2023 research report revealed that international packaging professionals across three sectors believed it was important for companies to explore new developments in packaging. The survey highlighted a range of factors that were motivating change - such as sustainability, quality and safety, and several other areas where industry professionals believed the biggest innovation opportunities to lie. But what these findings didn’t tell us was how that motivation translates to what is actually happening in the packaging industry today.

We know from our experience, working with customers across multiple industries as a trusted test and measurement partner, that pursuing those opportunities is not always straightforward. With continued turbulence and both internal and external factors contributing to uncertainty, organizations need more support than ever to remain resilient and assess opportunities for innovation in packaging without compromising the quality or safety of the product.

So, this year we are delving even deeper into an area that we know well - the food and beverage packaging industry. Often under scrutiny due to its consumer-facing nature and involvement in regulation developments, the industry was proven to have a large appetite for packaging developments in our 2023 report.

Throughout the year we’ll be launching three reports – each of these will unpack our new 2024 research data that compiles the thoughts of 380 packaging professionals in the food and beverage industry across the UK, USA, Germany, India, and Malaysia.

Together, we will examine the data and hear from a selection of experts to understand how companies are responding to innovation opportunities today – we already know the desire is there, but what is the reality?

Each report will explore a topic that we know has a deep impact on a company’s ability and attitude towards innovation: internal factors, external factors, and the testing environment. In our first report, we’re going to start by looking at what’s happening inside an organization that deals with packaging manufacturing, seeking to answer the following questions: 

FOREWORD

1. Are companies in the industry embracing packaging innovation today?
   
   
2. What impact does team structure and collaboration have on company performance and innovation?
   
   
3. How important are external partners for successful development in packaging?
   
   
4. Are companies trialing new technologies and which of these holds the largest opportunity?

We’ll also refer to a network of global technical experts who have generously provided additional insights into packaging innovation in food and beverage from their own experiences and time in the industry. By pairing these specialist insights with the original research gathered from packaging decision-makers across the globe, we’re able to offer expert analysis into the current state of play. 

KEY TAKEAWAYS

Innovation levels in the packaging industry are by no means universal. In 2023, 96% of packaging professionals in food and beverage told us that new developments in packaging were important, with 71% believing it was very important. However, the responses of the group surveyed for this year’s data shine a light on the reality for professionals in the sector.

The State of Innovation

Undoubtedly, within the packaging landscape there will be companies seizing innovation opportunities. However, those not currently planning to undertake an innovative approach are not necessarily at a disadvantage. There are companies within the food and beverage packaging industry that have been optimizing for decades and currently have no need to pursue innovations because they already run an efficient operation that satisfies consistent demand.

Meanwhile, some may be able to see the benefits of innovation, but unless they can guarantee the ROI, there isn’t enough justification to assign the resource to it. According to Nash Lawson, global product line director at Industrial Physics, “If a project is going to be undertaken it’s going to be scrutinized very heavily. Often, if a project is just being pursued to increase the organization’s sustainable credentials, this is not enough to justify the spend.”

Another consideration when examining the data is the subjective nature of defining packaging innovation. While for some there is an assumption that innovating in packaging predominantly means using new materials (things that consumers see), or changing the packaging shape to save on transporting costs, for others this could be more to do with the processes in development and manufacturing. Companies across the food and beverage packaging industry are trialling new production processes to cut down on waste or testing new coatings that are more environmentally friendly. These changes have significant implications; however, some may not consider them a packaging innovation because what is produced does not look very different.

In addition, while the true scale of innovation could well be wider than reported, another consideration is the number of requirements that lead to successful innovation. There needs to be a solid business case, which takes time, planning, experience, and expertise, and without it, it could simply be a wasted investment.

While more respondents offered a positive response to packaging innovation overall, those that did not agree that their organization is (or is planning to) innovate are not an insignificant proportion at 34%. This suggests that although the majority of those in the industry see innovation as important and desirable, the reality is not so straightforward.

This echoes thoughts from Matthew Rogerson, founder of The Pack Scout in California, who confirmed that although sustainability will remain a driver for innovation, as highlighted in our report last year, there are many practical elements that companies must consider. In addition to helping fulfil goals, e.g. sustainability, it must also fit into the manufacturing requirements, procurement needs, and company objectives.

According to Packaging News, the packaging industry is expected to face a considerable drop off in skilled staff over the next decade – this is due to employees that hold valuable specialized technical knowledge leaving or hitting retirement age. While they might leave behind specialist solutions and machinery that can fulfil some of the physical demands of their role, their departure will see a lot of technical skills, knowledge, and expertise departing the industry.

Talent and Operation Size

In the UK, this comes at a time of significant skills gaps, with many organizations struggling to recruit and retain the right talent. As the UK’s largest manufacturing sector, food and drink has continued to experience vacancy rates which are higher than the wider manufacturing sector. In fact, in the year up to July 2023, analysis shows that labor shortages alone cost the food and drink industry an estimated £1.4bn due to loss of output. This is playing out against a backdrop of external factors including economic hardship and supply chain disruption, painting an uncertain picture for the future of the industry. 

The research suggests however that layoffs aren’t automatically a symbol of poor business performance or a lack of innovation. Those strongly disagreeing that they’ve had to make layoffs over the past five 

However, this is not necessarily a challenge across the industry globally. Nash Lawson explains that in the United States, the proportion of students entering packaging programs at university is increasing year on year, which will facilitate a steady stream of qualified experts into packaging companies, eager to learn from industry veterans.

years are almost as likely to be taking an innovative approach (33%) as they are to have scaled back innovation (28%), suggesting that this isn’t necessarily the differentiating factor.

Elsewhere, those strongly disagreeing that their company has had to make site closures are also the most likely to not be taking an innovative approach (11%). While some companies are maintaining their current operations for well-established packaging materials in high demand, others are arguably not making site closures because they’re not adopting innovative approaches that would reduce headcount and increase efficiencies.

These examples illustrate how a company’s decision to take an innovative approach does not directly correlate with its business performance – there are many nuances to consider within a large and complex packaging industry.  

The research suggests however that layoffs aren’t automatically a symbol of poor business performance or a lack of innovation. Those strongly disagreeing that they’ve had to make layoffs over the past five years are almost as likely to be taking an innovative approach (33%) as they are to have scaled back innovation (28%), suggesting that this isn’t necessarily the differentiating factor.

Access to Expertise

While perceptions of team resource and expertise vary across geographical industries and packaging types, the research demonstrates general awareness around the need for expertise to feed into innovation, and that respondents feel they can pinpoint current strengths and shortcomings within their company. This awareness presents a great opportunity for internal knowledge sharing, training, and collaboration with external partners to make efficient use of the experience available in the industry.

Reliance on external partners was also something that varied across packaging materials, with those using paper packaging much more likely to seek support from external partners (62%) than those working with cardboard (37%). Nash puts this down to the difference in innovation opportunities today between paper and cardboard. In cardboard packaging, the process and applications are broadly the same as they have been for decades. Whereas in paper packaging, the use of coatings has led to many novel applications which require more support to ensure quality and safety – take paper wine bottles for example. A paper substrate with coatings on both sides would still count as a paper material but is essentially a brand-new packaging material in terms of its properties e.g. permeation.

Another popular avenue in the pursuit of innovation is cross-collaboration between teams, with 52% saying that their company encourages this. Interestingly, this is higher for those working with organic materials (62%), suggesting that a greater breadth and variety of experience is required for newer material decisions.

By sourcing support from external specialists, such as a testing partner, companies can capitalize on innovation opportunities without compromising the safety or quality of their products. Working with a partner also grants access to broader experience which can help to overcome external challenges, e.g. adhering to industry regulations and predicting customer perceptions of innovative packaging types. 

However, attitudes vary between sectors. 35% of those using organic material said that they didn’t feel they had the appropriate expertise to facilitate growth and innovation in their business. Nash Lawson explains, “one of the key issues with new materials such as organics and hydrogels is a lack of data because companies don’t have a history of using these materials. Being a relatively untrodden path, adding to the knowledge base is not easy but this is where sourcing external support can really help, allowing you to draw on the experience of others.”

There also appears to be a geographic split between those that are looking for support from a partner for innovation.

SECTION 3:

With significant competition between beverages on the shelves of stores across the globe, 3D printing allows companies to significantly differentiate the look of their product, and capitalize on promotional trends with relative speed. For example, PepsiCo’s famous Black Panther cans that were included in promotional kits when the film launched in 2018. 

PepsiCo’s R&D packaging engineer explained that the volumes they required for the kits were not high enough to justify investment in an injection molding tool, therefore they opted for 3D printing to bring the design to life. Whereas, for other companies, the opportunity lies in the manufacturing process. In recent years, Kaspar Schulz partnered with GE Additive to develop 3D printed machine components that require less material and less time for creation. 

Investment in
New Technologies

SECTION 4:

2. DATA ANALYTICS

3. 3D PRINTING

4. INTERNET OF PACKAGING (QR, RFID)

5. AI

1. DATA ACQUISITION

Agility and Responding to Innovation

Interestingly, those that strongly disagreed that their organization would be able to respond quickly are also more likely to believe their organization is taking an innovative approach to packaging (43%), suggesting that the key to successful innovation lies beyond speed. 

If this is the case, and companies know they can’t change quickly, they need to be planning a change well ahead of time, Nash argues:

This year’s research highlighted that, for many packaging professionals, their company’s ability to respond to innovation falls short, with team size and structure among the factors letting them down.

By understanding your organization, and its unique structure, challenges, and limitations, and by being upfront about the impact these factors have on ability to innovate, companies can put measures in place to mitigate these hurdles and fill crucial gaps. The same goes for expertise.

By identifying, acknowledging, and forming a contingency plan for known gaps, and by seeking an external expert early on in new projects where in-house expertise may be lacking, organizations can become more agile. Collaborating with industry specialists such as testing partners also ensures that where companies test their agility by taking advantage of innovation opportunities, they do so without compromising the safety or quality of their products.

LOOKING AHEAD

Despite these considerations, the challenging landscape isn’t all bad news for packaging innovation. Rather, it’s pushing organizations to plan ahead and assess their internal operations to make careful, considered decisions about which innovation opportunities to take.

However, a company’s internal operations are not the only consideration when examining its likelihood and capability of worthwhile innovation.

This year, we will be diving back into the data, to gain a full understanding of the breadth of external factors that are influencing innovation levels within the food and beverage industry.  

We will also be looking specifically at the testing environment, including its technical elements and how external partners can make a genuine difference to operations. Together, the three reports will allow us to truly examine innovation within food and beverage packaging.

There’s no benefit to innovating for innovating’s sake. It has to be a worthwhile investment for the company, which is called into question if they’re not able to feasibly roll out their innovation on a wider scale, or if there are even slight question marks over quality and safety.

As respondents in our survey last year pointed out, ensuring the quality (70%) and safety of packaging (61%) were the biggest motivators for packaging innovation. In those cases, a decision to step back is understandable – especially when resources and budgets are tight. 

​

LOOKING AHEAD

Innovation undoubtedly remains desirable for most in today’s packaging landscape, helping companies to break new ground and get ahead of the competition. Yet, contrary to popular belief, scaling innovation back or actively choosing not to innovate does not automatically put a business at risk. Rather, the most important aspects for every company within the packaging industry remain the quality and safety of what is produced. 

Industrial Physics is a
packaging and material test
and measurement partner.

About Industrial  Physics 

Across a family of specialist testing brands, our organization fulfils a critical purpose – to protect the integrity of brands and products for quality, R&D, and operations professionals across the globe.

We’ve been doing this for more than 100 years. By providing high quality equipment, solutions, and services, we’re able to support organizations across a wide range of industries. And our specialist expertise within the world of food and beverage packaging in particular, allows us to deliver a diverse scope of solutions for some of the world’s biggest brands. 

From seam inspection, to leak detection, to burst testing, to headspace analysis, and to label testing, we offer test and measurement solutions across a whole host of packaging and material types. Whether you’re dealing with glass bottles, cardboard boxes, plastic pouches, metal packages, or an alternative type of packaging, we’re here to help.

You can learn more about the unrivalled expertise offered by the team at Industrial Physics here.

In his responsibility for shaping the culture, strategy and growth of Industrial Physics, Barry carries on an ambitious aspiration for our ability to further protect the integrity of our customers’ products and brands. He joined Industrial Physics after over 18 years with Danaher where he developed a track record of growth, innovation, and operational improvements to better serve his customers. During this time Barry served in various test & measurement operating companies which addressed some of our world’s most critical problems. Most recently, Barry served as the President of Beckman Coulter Microbiology, a global healthcare clinical diagnostics company. Previously he was President of Sea-Bird Scientific, a market leading provider of instrumentation utilized in ocean research. Barry also spent close to eight years in various leadership roles at Hach, a global leader in water quality testing instrumentation. His passion for addressing challenges though accurate instrumentation and actionable data insights continues at Industrial Physics.

Founder of The Pack Scout, Matthew helps companies to optimize their packaging and understand how to turn intention into action. He uses his 20 years of experience in the industry to advise consumer goods companies on what is happening in the packaging market, how it impacts them and how to navigate key topics like innovation and sustainability. Matthew’s vast expertise is a result of his varied experiences, including running international business conferences and procurement events, leading editorial for global packaging and converting trade titles and two years spent in the manufacture of BOPE and BOPP films.

As a product and applications specialist, Nash brings 26 years of rich experience to Industrial Physics. As a technical expert within the world of test and measurement, he has used his knowledge to deliver solutions that satisfy a whole host of packaging mediums. His wide breadth of industry and application insight allows him to support a varied range of customers across a multitude of industries.  His advanced degrees in Physics and Environmental Systems Engineering allows him to understand the scientific principles associated with the equipment that Industrial Physics provides. He pairs his specialist skillset with a personable nature and laser-focused approach that delivers the ultimate experience for customers.   

With over two decades of engineering experience, Steve Davis is a true expert when it comes to the design and development of metal packaging testing systems. Steve, Global Director of Product Management at Industrial Physics, has provided solutions for many of the world’s leading can makers and can fillers. Over the years, Steve’s roles have been diverse – from helping customers find the right equipment in technical sales roles to leading the charge as a European VP of a metal packaging measurement business. At Industrial Physics, he utilizes his specialist skills to lead a team of experts across a diverse range of specialisms – ultimately, ensuring our equipment is able to protect the integrity of our customers’ brand and product.

METHODOLOGY &

DEMOGRAPHICS

Industrial Physics surveyed 380 packaging professionals in 2024.