Medium-sized Packaging Hit Hardest by Inflation as Customers Turn to Bulk Buying or ‘Premiumization’

As consumers seek more bang for their buck, GlobalData reports products with medium-sized packaging will be hit the hardest. The data and analytics company attributes emerging polarization in the market to changes in consumer shopping behavior amid rising inflation.

Inflation pressures trigger both trading down and premiumization

Brands will need to find new ways to increase value for money when it comes to packaging, as rising inflation is causing customers to be torn between bulk buying to save money and item quality.

Ramsey Baghdadi, Consumer Analyst at GlobalData, said, “In response to rising inflation, consumers are either spending less by buying less overall, switching out some products to save money, or buying higher quality produce to get better value for the money. This is causing a polarization in the market, with brands either increasing package sizes to appeal to bulk buyers or shrinking packs. Proving value for the money will be key, with solutions such as larger pack sizes and reusable packaging expected to become more common.”

Consumers believe refillable and recyclable packaging is important

In 2022, GlobalData’s Q3 survey of 21,000 respondents revealed that the majority (67%) of consumers globally found refillable or recyclable packaging extremely/quite important in their product search.

Baghdadi added, “GlobalData expected refillable packaging to take off pre-pandemic. However, because of the spike of hygiene concerns, the demand for refillable packaging dropped. Now safety anxieties are starting to lessen in Europe and North America, reusable/refillable products are making a comeback. More importantly, packaging companies should quickly make a move while the iron is hot.”

Medium-sized packaging impacted by private label preferences

As a consequence of reduced disposable income and tighter budgets, demand is rising for private label products (supermarkets’ own brand food, for example). According to a survey by GlobalData, a notable proportion (30%) of consumers globally claim that they typically purchase private label dairy products.

Baghdadi explains, “Premium-priced products are at risk of being left on shelves, as consumers switch to private label/cheaper brand alternatives. This has clear implications for changes to packaging design and costs.”

GlobalData forecasts that larger packs sizes (3,001-5,000 g/ml) will grow in volume at a rate of 4.3% per year to 2025, outpacing that of smaller pack sizes. However, smaller pack sizes are still expected to continue to dominate the consumer packaging market overall. Longer term, the rise of both ‘shrinkflation’ and larger pack sizes is expected to lead to further polarization of packaging sizes in many product categories, with the standard medium-sized pack hit hardest.

About GlobalData

The world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the health care, consumer, retail, financial, technology and professional services sectors.

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