In addition to the rapid growth of online and click and collect shopping, consumers have been spending less on their weekly food shop and eschewing the ubiquitous out-of-town superstores for a series of smaller top-up trips to a number of different retailers, including the hard discounters and pound stores, who have significantly grown their market share over the past seven or so years.
It’s a trend that was underlined earlier this year when Sainsbury’s announced that its ‘c-store’ (convenience stores) estate now outnumbered its superstores for the first time. And figures from retail analyst IGD show seven out of 10 shoppers now use a supermarket and c-store in any given month, with the UK convenience market set to be worth £49bn by 2019 – a 30% uplift from its current value of £37bn.
While packaging printers may be thinking ‘what’s all this got to do with me?’, the answer is ‘a lot’. That’s because retailers want to cram as many grocery items as possible into retail units that are a fraction of the footprint of their out of town stores – 300m2 and under versus 5,000-10,000m2.
This means brands are increasingly being challenged to develop new formats and packaging so they can squeeze around 2,000 items into these stores.
“Size matters,” Rob Sellers, director of shopper marketing agency Dialogue, told trade magazine The Grocer earlier this year. “If you can deliver a product that the retailer can store more of in a smaller space, you not only reduce logistical impact, you meet the needs of the convenience shopper.”
The two most high-profile examples to date are Unilever’s compressed deodorant packs for its Lynx, Sure and Dove brands – the cans are half the size of the original cans, but contain the same amount of deodorant – and Robinsons Squash’d, a super concentrated 66ml squeezy pack that fits in the pocket and can be diluted with water to make up to 20 drinks.
And this is just the tip of the iceberg. A number of other brands are currently developing new products and new pack formats that better address the needs of convenience operators.
But not everyone believes that the idea of cramming loads of smaller products into a smaller store is the best way forward. Phillip Adcock, managing director of Shopper Behaviour Xplained and author of Shoppology: The Science of Supermarket Shopping & a Strategy to Spend Less and Get More, believes that the entire supermarket model is broken and that their current approach to convenience retailing is misguided at best.
“The supermarket groups think shoppers want loads of choice and they think that people want lower prices, but I’ve got copious amounts of evidence about how too much choice makes it harder to shop and people end up buying less, so when they talk about c-stores and cramming in as many variants as possible that’s not what shoppers want, it’s a red herring,” says Adcock.
C-store shoppers typically only want one item and often it’s a distressed purchase, so they’ll go straight to the product that they want and completely ignore the other 1,999 items in store.
But Adcock concedes there are other factors in play besides squeezing as much choice as possible into a smaller footprint. He reports that demographic changes are also influencing the behaviour of convenience shoppers. With more people living on their own, and many not owning a car, they need more easy-to-transport single-serve items.
Anecdotal evidence suggests that the impact of this changing demographic profile is slowly being felt in stores. Although Jonathan Neville, managing director at Norfolk-based Polyprint, which produces bread, fruit and veg bags “by the millions”, says that the company hasn’t as yet detected a switch to smaller packs for the majority of work it undertakes, he has seen “a marked increase in three-pack banana bags in the last year, to the point where they are the second largest runners”.
Fruitful findings
Interestingly there’s been a similar trend for smaller packs of fruit in the US in recent months with fruit brand CMI trialling mini ‘grab ’n’ go’ flexible packs of cherries under the trading name Go-Go Fresh, specifically targeted at the nation’s growing convenience market.
And US-owned food giant Mondelez recently launched a number of resized products into the UK convenience market, as it has already done on home turf, including single-serve packs of Barny, Oreos and breakfast biscuit brand Belvita. It’s also introduced more refill packs of some of its household name brands and smaller pack sizes of coffee – industry experts say that flexible refill packs of products like coffee make much more sense in the c-store environment rather than traditional glass jars, which take up too much space.
Another key driver is demand for products that can be stacked on shelf more quickly and efficiently. Crisp brand Quavers has tapped into this ‘stackability’ trend by creating a multi-pack of its crisps that can be stacked – it essentially comes in a brick-shaped wrap pack – and toilet roll brand Ora has been specifically designed so that it stacks on top of itself, thus taking up less shelf space.
And it’s not just the symbol groups and the grocery multiples that are inspiring brands to explore new packaging formats. Discounters like Aldi and Lidl, which are rapidly growing their market share, have a need for packaging that sits well in their smaller format stores, as do the variety discounters and the pound store groups, whose businesses also flourished during the recession.
Adcock says he’s seeing a lot of evidence of pound store operators in particular issuing very specific packaging demands of their suppliers. “Part of that is so that they can hit a particular price point,” he explains. “And part of that is to manipulate customers. The only way that customers can make judgements about a product, be it price or pack size, is when it’s presented in context. So if you’ve only got one size in a pound store people don’t tend to realise that it’s smaller and that they’re possibly paying more per gram or millilitre.”
The growth of these pound store operators, which take significantly less volume than the large supermarket groups, may go some way towards explaining why run lengths have reduced significantly in recent years.
It’s a trend detected by Alan Bunter, director at Dorset-based printer Remous, who reports seeing strong growth in the short run packaging side of the business. “People aren’t investing in volume – they’re investing in more choice,” says Bunter. “Where someone might once have had 10,000 of one box printed they might have 1,000 boxes today and have something a little bit more bespoke for each product.”
Although pack formats specifically developed for the convenience market are only just getting out of the starting blocks, some experts forecast that we might not be far from a tipping point, with a raft of these types of packs about to hit the market. Indeed, the FMCG behemoths are renowned for being reactive rather than proactive, so it only needs one company to take the lead to force the others to follow.
More work
Whichever way you cut it – and whenever this tipping point eventually occurs – Adcock, for one, believes that what the convenience trend ultimately means for packaging printers is more work.
“Why? Because the big retailers are pathologically obsessed with volume – everything they sell is about volume,” says Adcock. “So if you put 30 Belvita biscuits in a box that’s only one box that you need to print. But if you take those 30 Belvita biscuits out of that box and into a single-serve format then you need 30 packs. So it’s more work and you could argue that it’s shorter runs.”
It could mean that some of the packaging work that’s migrated overseas in recent years will start heading back to UK shores soon, argues Adcock. “Some of the packaging might currently be made overseas, but if you’re doing shorter runs it makes it less economically viable to do it abroad because you can’t amortise the transport costs to get them back to the UK. So there could be an opportunity for printers to market themselves as small pack, short run specialists and fill a niche that the huge Eastern European or Chinese printers cannot fill.”
However this drive for products that better suit the convenience format manifests itself, it’s clear that UK printers could be well placed to cash in on this trend. As Charles Booker, chief executive of the UK’s biggest wholesaler group Booker, pointed out at the City Food Lecture in February this year, we’re standing at the dawn of a new grocery landscape, and with the slowdown of supermarket sales and new superstore developments, there’s a huge opportunity for astute suppliers to cash in on the convenience growth.
“Quite simply, suppliers need to go where the growth is,” Wilson told the audience. “Better to put your best products, best people and channel support into the growth sectors, rather than no-growth supermarkets.”
