Introduced in the year , glass bottles are the first dairy packaging material for retail. Before this, people used their containers for getting milk and other items from the dairy farms. It was only during World War II, wax-coated paper containers came into existence for retail distribution of milk followed by plastic-coated paper. Today, more than 75% of dairy packaging comprises plastic.
The fast pace of life and changing food preferences justify the consumer&#;s want for packaged food. Not only the range of dairy products has grown over time, but their shelf-life is also increased. Reason &#; lots of development have been done in dairy packaging to preserve dairy products from internal and external conditions.
Let&#;s look at the basic requirements of dairy packaging followed by innovations and new product launches in the market.
The shelf-life of dairy products depends on certain intrinsic and extrinsic factors. The intrinsic factors include pH, nutrient content, presence of antimicrobial compounds, and oxidation potential of the milk. Pasteurization, condensation, and drying are common methods to make dairy products fit for packaging and storing.
Storage conditions and air content contribute to the extrinsic factors of dairy packaging. Plastic, laminated paperboard, glass, and metal provide required isolation to the dairy products like milk, milk- powder, cheese, cheese spreads, butter, ice cream, desserts, and yoghurts.
According to the Grand View Research, the global dairy packaging market is projected to reach USD 83.77 billion by the end of .
The emerging trends in dairy packaging are a result of rising demand for minimally processed food; changes in retail distribution network; growth of e-commerce; and introduction of milk vending machines.
Dairy companies are investing in packaging technologies like controlled and modified atmospheric packaging, intelligent, active, nano, and antimicrobial packaging. Researchers predict that manufacturers will promote glass packaging in the next eight years because of their excellent recyclability.
The following are some of the emerging trends in dairy packaging.
The U.S. EPA (Environmental Protection Agency) and the European Commission are imposing strict regulations towards limiting carbon gas emissions. That&#;s why dairy product manufacturers are now switching to eco-friendly packaging materials. Eco-friendly plastic packaging is, therefore, a suitable choice for manufacturers who don&#;t want to compromise with the product&#;s shelf-life without refrigeration. The eco-friendly plastics are of the following three types-
The dairy industry is also witnessing structural innovations in packaging; such as &#; tap-it-dispensers, multi-layered milk bags, stand-up milk pouches, to name some. For example, in November , Haifa-based Copy Centre introduced renewable paperboard-based packaging cups for Tnuva&#;s dessert brand Yolo.
&#;Take a look at 7 eco-friendly packaging products for your next inspiration.
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Convenience will remain an important criterion for purchase. For instance, stand-up pouches and preformed pouches are portable and lightweight, which are comfortable to use for the consumers.
Dairy products are also a great source of nutrition. Because of growing awareness towards nutritional enrichment, consumers&#; demand for dairy products is increasing. Seeking the opportunity, national dairy farming cooperatives in developing countries like China, India, Vietnam and Brazil are following a &#;forward integration strategy&#;. Here, these cooperatives are selling finished dairy products including ice cream, cheese and yoghurt through offline and online channels. These strategies are expected to open new avenues for packaging manufacturing companies.
From -17, developed economies have been witnessing an increase in the number of new non-GMO labelled dairy products by 15% year-on-year (YOY) basis. In November , Germany-based Ekosem-Agrar AG launched EkoNiva Brand in Russia specifically for fresh milk, sour milk, kefir, butter, cheese, yoghurt, and semi-hard cheese. Such new convenient dairy products are projected to expand the scope of packaging in Russia and Germany over the next few years.
The convenient dairy products range is also covering on-the-go-snack options, especially for millennials. Products like drinkable yoghurts and cheese snack packs are often packed in lightweight pouches and films. This packaging is easy to use and is disposable.
Product innovation will remain a critical success factor in the dairy packaging industry. The following are some of the innovative dairy packaging products launched in recent years.
In November , ARTA INDUSTRIAL GROUP launched a new paperboard cup under the brand name, FiberCup for dairy goods packaging. The company uses recyclable pulp fibres and recycled PET plastic resins as raw materials to produce these products.
Image Credits: Arta PlastIn May , Brazil-based AGRINDUS adopted transparent PET bottles for the packaging of fermented milk brand, Letti. Amcor Packaging supplies packaging materials for these products. These transparent PET bottles have thick walls to prevent deformation. It has excellent drop resistance and has eliminated the need for the foil seal barrier.
Image Credits: LettiConstantia Flexibles- after five years of deep-research and testing has recently introduced EcoLamPlus packaging for meat, cheese, and dairy products. It comprises of layers of only PE lamination giving it a mono-material structure. This packaging reduces carbon footprint by almost 32% and ensures high degrees of moisture and oxygen barrier.
Image Credits: Constantia FlexiblesTetra Pak launched Tetra Classic Aseptic Cube in December for dairy, juice, and liquid food. It&#;s groups 6 packages to form a cube- saving 40% of transportation space. This one of a kind structural innovation is cost-effective for manufacturers as well as environmentally sustainable.
Image Credits: Tetra PakAn Austrian company "Naku - Made of Natural Plastic" has launched a bioplastic container for dairy items. It comprises of lactic acid from vegetable sugar and starch. The packaging is free from synthetic plasticizers, 20 times lighter than glass, and 10 times cheaper than plastic. It is completely biodegradable.
Image Credits: NaKuThe demand for longer shelf-life, convenience, and wider scope of distribution are driving innovations in dairy packaging. Also, environmental sustainability will remain a major concern for manufacturers. Researchers predict extensive use of bioplastics and active packaging for a range of dairy products.
Varun Juyal holds a Bachelors in Petroleum Maintenance & Operations and M.B.A in Oil & Gas Management from University of Petroleum Studies, Dehradun. He has more than four years of experience in market research and business consulting. Varun has been an active participant in a majority of the consulting engagements, product sales forecasting, and penetration studies at Grand View Research. Clients in paints & coatings, consumer goods, construction, oil & gas and chemical sectors have appreciated his consulting projects and in-depth research coverage.
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China&#;s retail industry looked promising in the first quarter; the retail sales of consumer goods excluding automobiles was 3,155.4 billion yuan (USD 492.2 billion) in March, a 34.2% increase from last year. This gives a positive outlook for consumer-packaged goods (CPG) companies as consumption rebounds in China. However, the rising competition intensity and changing consumer behavior signify challenges for CPG companies. Something as specific as product packaging size can make a huge difference in term of sales and capturing market share. Find out how to determine the best product packaging size that fits the Chinese market.
Product packaging size is one thing not to overlook when adapting products to a new market. In fact, it is an important element in packaging design, a business way of attracting consumers through tangible mediums. When shopping, consumers interact with the packaging in a matter of seconds before deciding which products to bring home. Apart from shape, labeling, and color of a product, shoppers will also make a buying decision based on package size.
What works internationally does not necessarily work in China. The country has many products in different sizes compared to other countries, and there is a reason behind this. Milk products in China, for example, are rarely in bulk or gallon like in most countries. Instead, they are sold in much smaller portion sizes. This is primarily because a large population of Chinese adults have some level of lactose intolerance and so the amount of milk consumed in one sitting is lower. In this case, selling too large portions of cow milk in China can put a limit on your potential revenue and growth.
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Sources: Daxue consulting photograph of supermarket shelves in Shenzhen, China (left) Wikimedia Commons gallon sizes milk sold in the US, which would be hard to find in China (right)Sources: Daxue consulting photograph of supermarket shelves in Shenzhen, China (left) Wikimedia Commons gallon sizes milk sold in the US, which would be hard to find in China (right)
Rice and flour are food staples in China as Chinese people have been consuming rice and flour since ancient times. People in the south eat rice in almost every meal, while people in the north eat more wheat or flour. You can see rice almost always in large quantity in China, ranging between 5 to 10kg per bag. Flour has a package of 1 to 2.5kg bags. In Europe and the US, rice is commonly sold in smaller bags of less than 2kg mainly because it is not eaten with every single meal. Rice consumption levels are much smaller in Europe and the US, with 5kg and 10.8kg per capita respectively compared to 126kg per capita in China.
Sources: supermarket shelves in Shenzhen and Walmart.com, the common package sizes of rice in China (left) are larger than those in the US (right)Sources: supermarket shelves in Shenzhen and Walmart.com, the common package sizes of rice in China (left) are larger than those in the US (right)
Cooking oil and soy sauce are the main ingredients in Chinese cuisine. People use them in the cooking and flavoring of several Chinese dishes. Cooking oil and soy sauce come in various portion sizes to serve the varying consumption levels of households and restaurants. Whereas people in the West tend to use less oil in cooking on a daily basis and use soy sauce only for Asian dishes. Tea is another example of food products with significance in Chinese culture. Tea beverages come in all sizes from 250ml bottles to 5-litre gallons as Chinese people love to drink tea.
Source: Daxue consulting photograph of supermarket shelves in Shenzhen, product packaging sizes of oil, soy sauce and tea are relatively larger in China than in Western countriesSource: Daxue consulting photograph of supermarket shelves in Shenzhen, product packaging sizes of oil, soy sauce and tea are relatively larger in China than in Western countries
Western products such as cereals, peanut butter, jam, and salad dressing have smaller packages in China. Though having long been accepted by the market, especially among younger generations who embrace Western tastes and eating habits, the demand for these products is still far from mature.
Source: Chinadaily, many Chinese people prefer to eat traditional breakfast like noodles, steamed buns, and dim sum over Western breakfastSource: Chinadaily, many Chinese people prefer to eat traditional breakfast like noodles, steamed buns, and dim sum over Western breakfast
Asides from consumption level, smaller package can also be associated with portability. In China, people have to carry tissues with them whenever they go out. It is not guaranteed that there will be tissues in public places, especially restroom and restaurants. In contrast, people in the US and Europe mostly buy tissues for their home because tissues are typically available in public places. For this reason, we can see packs of small tissue packages sold in stores and supermarkets all around China.
Source: Daxue consulting photograph of supermarket shelves in Shenzhen, small tissue package is very popular in China for its portabilitySource: Daxue consulting photograph of supermarket shelves in Shenzhen, small tissue package is very popular in China for its portability
China has the largest &#;single&#; population in the world, and the number is expected to keep increasing in the coming years. According to the Ministry of Civil Affairs, over 240 million people or 17% of the population are single; 92 million of which live entirely by themselves. The rising number of single people in China means a change in consumption which will generate opportunities for CPG companies that understand them.
The lifestyle of single people in China is characterized by freedom and the pursue of high-quality life. As singles do not have to raise children or take care of their family members, they can spend more money on things that would improve their life quality or happiness. Because single people tend to live alone, they also do not have to share things with others. Moreover, singles usually have busy schedules, so they would consider convenience when buying products. For these reasons, single portion packages have become very prevalent in China.
According to the recent census released by the government, the household size in China has declined over the past 5 years. The average number of people per family is down to 2.62 in from 3.1 in . In the past, it was common for three generations to live together in the same household, but a typical family today only consists of parents and a child, or even no child at all. Small households in China usually buy less per time and make more frequent trips to grocery stores. On the other hand, large households tend to buy bulk and make less frequent trips to save money and time.
Data source: National Bureau of Statistics, designed by Daxue Consulting, shrinking average household size in China over the yearsData source: National Bureau of Statistics, designed by Daxue Consulting, shrinking average household size in China over the years
Short shelf-life products such as dairy products, bread, and processed meats are commonly sold in single portions or smaller packages. As these products can expire within days, it is a better choice for singles and smaller households to buy smaller quantity. Products such as pasteurized milk, juice box, packaged cakes, biscuits, and meat snacks can be kept for a long time. However, their shelf life can get significantly shortened after opening. Thereby, they are typically sold either individually or in a pack of multiple single portion packages for the shelf life and convenience.
Source: Daxue consulting photograph of supermarket shelves in Shenzhen, pasteurized milk and meat snacks packaging in ChinaSource: Daxue consulting photograph of supermarket shelves in Shenzhen, pasteurized milk and meat snacks packaging in China
According to BCG, China&#;s health and wellness market reached USD 70 billion in . Even before the pandemic, Chinese consumers are becoming more aware of their health, as reflected by growing organic food sales and increased spending on wellness products online in recent years. This ongoing trend of health awareness in China has led consumers to change their eating habits and adopt a healthier lifestyle. As consumption for healthy products rise, healthy brands can offer more package sizes, especially larger ones to meet the different needs. Though, brands should pay attention to consumer perception of healthy food; what is healthy in other countries may not seem as healthy in China.
When it comes to snacking in China, the popular options are fruits, nuts, and granola bars. Dried fruits and nuts have various packaging sizes because they are perceived to be healthy. However, granola bars are mostly in the stores individually or in a pack of 5-10 individual packets as they seem not that healthy due to being more processed and containing added sugar. Meanwhile, you can easily find a pack of 20-40 granola bars in some countries like the US.
Olive oil has been gaining popularity in China, especially in urban areas, thanks to the growing health awareness and disposable incomes. Olive oil seems as a healthier choice to the regular vegetable oils. Despite the higher price, olive oil has medium (250ml) and large bottles (as large as 5 liters), the latter is uncommon in the US due to the differences in cooking habits. Additionally, Chinese people like to buy olive oil products as gifts because they seem premium and healthy.
Source: Taobao, olive oil sold in large gallons (left) which are not common in the US and in medium-size bottles with additional bag for gifting (right)Source: Taobao, olive oil sold in large gallons (left) which are not common in the US and in medium-size bottles with additional bag for gifting (right)
Health-conscious people in China also consume unhealthy snacks but do so in a limited amount. Products such as cookies and sweets have small packages or packs of single portions. However, there is an exception for confectionary products that customers buy as a gift. These products can come in large and premium packaging. Potato chips and crispy snacks have relatively smaller packages (40-80g) in China, compared to the US where you can see many &#;family or party size&#; bags (300-400g) on retail shelves.
Source: Daxue consulting photograph of supermarket shelves in Shenzhen and Walmart.com, crispy snacks package sizes in China (left) and the US (right)Source: Daxue consulting photograph of supermarket shelves in Shenzhen and Walmart.com, crispy snacks package sizes in China (left) and the US (right)
Consumption level of a product depends on the local culture and consumer preferences. Products with high consumption level are typically something many consumers have already acquired a taste for, or that the products have well penetrated into the market and culture. Products with low consumption level appeal to niche markets. Widely-consumed products should come in various sizes, especially large, and products with lower consumption level should better have smaller package.
Smaller and more compact products are more portable and generally more convenience. For products which consumers need to carry around and regularly access, they should come in smaller package sizes. In addition, if your product appeals to single people, then smaller package size may be more suitable and attractive.
Health awareness is growing in China but not every healthy product should come in larger package sizes. There are healthy products that people still perceive to be unhealthy. Perceived healthy products should offer various sizes to fit the varying consumer demands, while perceived unhealthy products should come in smaller packages or controlled portions.
Small households tend to shop more often and buy less each trip. On the other hand, big households tend to shop less often and buy more each trip. Car ownership also influences how frequently consumers do grocery. Households without a car usually purchase less quantity per trip. Car ownership rate per capita is much lower in China than in the US and European countries.
Average household size in China is shrinking and the single population is growing. Short shelf-life products should also come in small packages to fit the consumption of smaller households and singles. Long shelf-life products can come in large packages or in packs of multiple single portions.
Consumers can be very sensitive to the change in price especially for expensive or high-end product categories. Product packaging size and pricing are inter-related; smaller portion size usually equals lower price, more affordable to consumers. In this case, brands should be precise about package size, taking into account their main consumer segment and price sensitivity.
In the beauty industry or other industries where brand loyalty is not strong, people like to purchase products with smaller package size because it allows them to experiment with different brands before settling with the ones they prefer, or that consumers like to own different brands or styles of products at one time.
Understand the Chinese market
Whether you are planning to enter the market or already an existing player, understanding the competitors, the trends, and the market landscape will help you make well-founded business plans, improve your competitiveness, and increase your chance of success.
Analyze target consumer segments
It is crucial to identify who are or potentially will be the main buyers. Understanding the target consumer segment will allow you to tailor your product packaging to consumer needs.
Modify product package size based on key factors and findings
To ensure that your product will fit the market and meet the needs, we can benchmark products, assess product performance, and even get direct feedback from target consumers to help you determine the best packaging size for your product.
This article A Guide to Product Packaging Sizes in China was written and published by Daxue Consulting, a China based market research and strategy consulting firm.
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