Beyond the box: Why FMCG brands must rethink packaging

Sustainability is not a choice; it has become a mandate for corporates worldwide. The sooner it is embedded into the business philosophy, the easier it is for the organisation to address the demands made by the larger system.

This is true for the fast-moving consumer goods (FMCG) sector in India too, a market projected to reach $616 billion by 2027. As this dynamic industry evolves, packaging emerges as a powerful tool, not only for protecting products but also for conveying a brand’s commitment to environmental, social, and governance (ESG) principles.

Indian FMCG companies face pressure from two key stakeholders: governments enforcing stricter environmental regulations and an evolving, more eco-conscious consumer expecting more sustainable products.

Companies in the sector are striving to balance their responsibility towards the environment by reimagining their sustainability targets. Along with energy efficient manufacturing and sustainable supply chains, this dual decree from the government and consumers alike, necessitates a shift in how businesses approach packaging to ensure not only responsible sourcing but also responsible disposal upon use.

Working towards a responsible ecosystem

The UN definition of sustainability emphasises on ‘taking full account of the environmental consequences of economic activity and stresses on use of resources such that they are replaced or renewed, not depleted.’ Living this idea would require both manufacturers and consumers to come together to build a fully-functional, environmentally responsible packaging eco-system.

As manufacturers explore innovative packaging solutions through experiments in material and design and embrace the principles of a circular economy to transform their packaging footprint, the monitoring and synchronising of their efforts with evolving consumer sentiments becomes vital.

Manufacturers would need to innovate keeping in mind the shifting sensibilities and expectations of consumers across the moments of truth for packaging interactions.

Understanding the eco-conscious consumer

Among Indians, the concept of reuse and recycling is not new. Traditional practices like repurposing old clothes and reusing containers were once deeply ingrained into popular culture. But today, for the young and aspiring urban India whose focus is personal growth and economic progress, the enchanting and endless choices offered by the exploding markets become very hard to resist.

While consumers express concern for the environment, there is a significant gap between intention and action. Research reveals a ‘say-do’ discrepancy, where consumers voice support for sustainability but hesitate to make purchase decisions based solely on eco-friendliness. Cost considerations and convenience often outweigh environmental concerns.

This presents a challenge and an opportunity for brands. With a nuanced understanding of what consumers really want, brands can rise to the opportunity and push their innovation efforts in a direction that makes sustainability an easier or a convenient choice for consumers, pushing them closer to action.

It must be understood that although consumers are part of the solution, they are incapable of driving it. They expect to be led and if they are not ushered in the right direction by brands and corporations, they will simply lose focus.

Packaging as an ESG messenger

Packaging is more than just a container. In this bid to navigate consumers towards sustainability by synchronising their intent with appropriate action, the product packaging becomes a powerful communication channel that brands and corporates can leverage effectively.

Indians are conditioned to believe that production of plastic and management of plastic waste are top contributors to global warming. The government’s push to regulate plastic use, including bans on single-use plastics appears to have emphasised the importance of sustainable packaging. In such a regulatory landscape, consumers perceive product packaging made from natural, recyclable materials as better for the environment.

Through packaging, brands and companies can not only to convey ESG messaging but also demonstrate their commitment to sustainability through material choices, building trust with consumers who align with these values.

Measuring the impact

To effectively leverage packaging as an ESG messenger, brands need to measure the impact of their initiatives. This goes beyond simply assessing the environmental footprint of the packaging itself. It requires a comprehensive approach that considers the impact on brand perception, consumer behaviour, and overall business performance.

Crucially, measurement strategies should account for the "say-do" gap and incorporate passive measures to capture actual consumer behaviour rather than relying solely on stated intentions. This might involve analysing sales data, tracking consumer engagement with recycling programs, or conducting ethnographic research to observe real-world purchasing decisions.

Beyond boxes

A well-crafted pack has the potential to reach far beyond just messaging via labels and boxes, to deliver an impact even on the long-term assets of the brand. A pack can carry consumers along with the brand in its pursuit of sustainability, fostering a sense of shared responsibility towards a more sustainable future.

Therefore, when developing packaging innovations, brands must carefully consider its multi-dimensional impact to avoid missing out on opportunities of strengthening the brand’s position among its potential consumers.

By adopting a holistic and consumer-centric approach to packaging, FMCG brands can not only meet the demands of a changing market but also unlock new opportunities for growth and brand loyalty. Packaging, far from being a mere container, can become a powerful tool for driving corporate responsibility and building a sustainable future.

L. Preetie Kotur, consultant, health, Ipsos India.

R. Shruti Patodia, research director, shopper insights, Ipsos India.