Tanu Grewal, Chief Cleaning Officer at brand owner AlEn USA, a manufacturer of emerging cleaning brands Pinalen, Cloralen, and Ensueno Laundry, approached Packaging World with an interesting perspective on a simple packaging decision that can offset economic pressure for brands. It might seem counterintuitive with consumer fears of so-called “shrinkflation,” but concentrated product in smaller packs can present greater value instead of lesser, while checking a lot of boxes for both consumers and brands. We asked her to explain.
What’s does the current landscape look like for CPGs like yours, as you see it?
The past several years have presented a challenging economic environment for manufacturers. The pandemic economy, coupled with 2020’s rampant supply chain disruptions rocked the industry—leaving lingering fears that have persisted through today. In fact, recent data shows that a weakened domestic economy now ranks among CPG manufacturers’ top concerns according to NAM data, and a shrinking number of manufacturers are feeling optimistic about their business’s future as a result.
At the same time, consumers are demanding more from manufacturers than ever before. When it comes to Environmental, Social, and Governance (ESG) measures, consumers are becoming increasingly aware of not only what’s in their products, but what’s behind them—from logistics and Scope 3 emissions to resource use. These ESG values, while incredibly important, are building the pressure on CPGs to innovate quickly, amid what is already a tumultuous environment.
So what can CPGs like yours do to navigate this landscape?
Doubling down on smaller packaging with compact, concentrated products is an interesting way to thread the needle. Concentrated products contain the same active ingredients as traditional ones, just with less water added. This means the same amount of cleaning power can fit in much smaller packaging.
What are some of the benefits of compact packaging, and why should manufacturers of CPG products should consider them?
Ultimately, you’re passing on savings to the consumer. Compaction also presents an opportunity for CPGs to cut costs. Consider, first, the decreased resource usage needed. Compact products require less water, as well as less plastic packaging. Shipping and logistics are also more cost-efficient with a lighter product. Over the long run, these changes can make a huge difference for manufacturers, especially in today’s harsh economic climate. These benefits mean that manufacturers who switch to compacted products can often pass down savings to their consumers, too. That’s a win-win for customers looking for a more sustainable product that also gives them great value.
Tell us more about the environmental impacts of this pack design choice.
It's no secret that packaging can be a huge contributor to environmental impact. In fact, 40% of all plastic produced in the U.S., according to National Geographic, is packaging that’s used just once and then discarded. When making a compact product, instead of adding water during the manufacturing process, the key active ingredients are concentrated, and consumers add their own water at home. That means consumers are getting the same amount of product and potency that they expect, while also eliminating the need for large plastic bottles or cartons.
What about lightweighting for the supply chain, there must be benefits there, too, no?
Beyond pollution, compact packaging can make for a more sustainable logistics process, too. With a lighter product, logistics is often more efficient and produces less emissions, helping brands move closer to their carbon zero or carbon neutral goals.
How are consumers reacting to Pinelan’s efforts in concentration and smaller packs?
This approach can be effective at grabbing consumers’ attention. A study by McKinsey found that 43% of consumers say environmental impact is an extremely or very important packaging characteristic when making purchasing decisions. By tapping into those thought processes, your brand can become top of mind for consumers seeking sustainable options that are also incredibly impactful.
What about a CPG’s direct customer in the retailer. How are they impacted by this pack design choice and what’s their reaction?
With 78% (according to McKinsey) of U.S. consumers saying that a sustainable lifestyle is important to them, more grocery and convenience stores are looking for sustainable products they can offer consumers. By offering a more sustainable packaging option, plus reducing Scope 3 emissions, manufacturers can ensure their product stands out among an incredibly competitive retail environment. When retailers support compacted products by offering them in-store and giving them preferred shelf space, it’s mutually beneficial. In doing so, retailers help brands advance their sustainability goals, while also showcasing to their own shoppers that sustainability is a priority. Retailers are always looking for ways to optimize room on their shelves, too. Prioritizing a smaller, compacted product is always something to highlight when pitching retailers who are looking to save some of that valuable space.
What are some challenges to this approach? Are consumers or retailer wary of charges of “Shrinkflation?”
Ensuring that consumers understand why you are moving to a compacted product is paramount. Without the right education, when consumers see a smaller bottle, they may assume they’re paying more for less. Being intentional about the packaging redesigns you choose, as well as marketing and communications around the changes is essential to making this strategy effective and driving more consumer engagement. While today’s economic environment may feel unprecedented, it’s surely not the last hurdle that CPGs will face in the COVID-era economy. By switching to concentrated products, manufacturers can reap long-lasting benefits, including increased customer loyalty and a competitive edge in retail, all while moving closer to their sustainability goals. With the right positioning—and some help from retailers eager to feature these products—brands can see more revenue, more success, and, most importantly, happier consumers. PW