It’s a whole new ballgame in the consumer packaged goods (CPG) arena. With the rise of the so-called “connected home,” a heightened emphasis on sustainability, and an evolution in how people shop and buy their products, brand owners are needing to completely re-evaluate how they design the packaging for products.
Jabil Packaging Solutions is one of the firms at the forefront of this effort. A unit of contract manufacturing giant Jabil Inc., JPS has the advantage of being able to leverage the design, electronics and plastics molding expertise of its Saint Petersburg, Fla.-based parent, which employs more than 200,000 people at 100 sites worldwide.
In a Jan. 8 interview at the huge CES 2020 consumer technology show in Las Vegas, JPS leaders provided a progress report on some of their latest smart packaging initiatives. In a private suite on the 30th floor of The Venetian Hotel, Brenda Chamulak, Joe Stodola and Dr. Amanda Williams were among those on hand.
They showcased a number of examples of JPS’ three-pronged strategy, which it defines as Core, Device and Digital. The Core category, explained Stodola, chief commercial officer and vice president of the JPS global business unit, is essentially the business of former custom molder Nypro Inc., which Jabil bought in 2013. That unit focuses on manufacturing rigid packaging products, said Stodola, who previously worked for Nypro.
The Device and Digital categories view packaging through the lens of their contract manufacturing parent, leveraging sensor and electronics technology to help measure use of the products in question and with auto-replenishment of those supplies. Additionally, he said, “Sustainability has to be built into the entire purchase solution for packaging.”
Chamulak joined Jabil Packaging Solutions as its president and CEO in August 2018 after more than eight years at packaging giant AptarGroup Inc., where she most recently had served as president of global market development for Aptar Beauty + Home. She said Jabil approached her because it lacked the kinds of relationships with CPGs that were needed to serve this packaging sector, which was fairly new to Jabil.
CPGs previously monitored store shelves to assess product sales and popularity. “The development cycle for new CPG products is typically 18 to 36 months, and it’s super capital-intensive,” Chamulak said. “So in the past, these companies could always anticipate when a new competitor was coming in, and they could pre-empt that. Also, they communicated with consumers through television ads.”
The internet, and the rise of e-commerce, has changed all that. Now, she said, “CPGs are losing customers, and they don’t even know who they’re losing them to.” That makes it a priority for CPGs to find new ways to enhance brand loyalty among an increasingly fickle base of consumers.
Why, as a consumer, do you buy from Amazon?, she asks. “Well, it’s choice, it’s best price, it’s speed. This has changed the scope of how CPGs interact with consumers, and what they need help with.” Out of that was born the Jabil Packaging Solutions strategy, which aims to assist CPGs by taking a different approach.
“In our case,” Chamulak says, “the device is the means to selling more of the product for the CPGs. The device is the way to lock in the loyalty in a lot of cases. So, in our world, the device is often the package.”
In its CES suite JPS was displaying packaging solutions for various products, including dishwasher tablets, baby formula, coffee and even M&M candies. The first two of those were for U.K.-based Reckitt Benckiser LLC. Reckitt’s Finish® is the world’s largest brand for automatic dishwasher products, and the company acquired the Enfamil® baby food brand via its 2017 acquisition of Chicago-based Mead Johnson Nutrition Co.
Jabil developed a durable plastic tub (i.e., the device) into which a drops a lightweight, replaceable tub that would hold the product.
“This insert,” explained Stodola, “is the shippable, e-commerce-able, sustainable solution. You’re getting away from having to be pretty on the shelf. It just has to be functional.”
Dr. Amanda Williams, JPS’ smart packaging lead, said, “We tried to take a platform approach to auto-replenishment. We’ve tried to create modular solutions that work really well for common product form factors.”
The different examples on display at CES all use basically the same sensor board, she said. The sensor can take the form of a puck that’s placed into a container, or it can be embedded into the lid. The sensors run on very low power, so that one AA battery will last about a year. Jabil also can push software updates to the product’s firmware remotely.
The sensor measures the distance from the sensor in the lid to the top of the product in the container below. When the container is just 20 percent full, it triggers a refill notice to a smartphone app used by the consumer (who can choose to reset the that trigger level in the app’s settings, if desired). In a variation on that theme, the Enfamil powder formula’s package is based on weight sensing, rather than on volume.
Jabil designed an app dashboard, which can be used to provide feedback on a daily basis to the brand owner. “It can provide use data in the aggregate,” noted Williams. If the brand owner notices, for example, that a certain group of customers is using its product less, then it can opt to send them a discount code or a recipe.
Brands are interested in aggregate data, not about individuals’ use patterns, she stressed. They may care about trends by region or by type of user group (e.g., people with 6-month-old babies use it this way, and people with 10-month-old babies use it that way). That’s the kind of data that brand owners find most useful.
Still, one could imagine there might be privacy concerns.
“We’ve been working very closely with our privacy lawyers,” Williams said, “to ensure that we are in full compliance with GDPR [General Data Protection Regulations], “and that what we are doing is kosher.” Additionally, said Chamulak, a sister unit, Jabil Healthcare, is “pioneering the right way to go about this,” and Jabil Packaging is benefiting from their knowledge.
And, they noted, consumers can always choose whether to participate or not. Jabil so far is finding that as long as the consumer perceives a benefit to them, they tend to be open to participating.
Williams says a key benefit of this system involves simplifying the process of subscription management and product auto-replenishment. She terms the act of having to keep track of one’s product auto-subscriptions as “cognitive overhead,” meaning that someone needs to stay on top of these refills if they are calendar-driven, rather than sensor-driven.
“Someone in the household has to think about a lot of stuff that is not gratifying or satisfying,” she said. “You get in trouble if it goes wrong, but it’s invisible if it goes right.” By only reordering product when it is needed, one avoids over-ordering and generating additional waste.
“We integrate with Amazon’s Dash Replenishment Service,” she said, “but we also can work with various fulfillment providers.”
Chamulak acknowledged that this type of approach is only suitable for certain types of products. There are particular items and brands that consumers know and like, and never want to run out of, such as laundry detergent or baby formula. But there are other products, such as shampoo, perhaps, that one prefers not to be locked into, so that they can try different brands.
Jabil also worked with Atlanta-based pulp and paper giant Georgia-Pacific LLC on a paper towel dispenser. “We used an existing product, using their sensors, to integrate their device with our cloud platform. In a few weeks, we were able to integrate it into our dashboard.”
Not having to worry about a package’s presence on a store shelf allows package designers and manufacturers such as Jabil to focus on taking weight out of the rigid package and on maximizing sustainability via reusability and recyclability.
Chamulak says her firm can make durable devices and refill packages out of polypropylene or polyethylene, or basically out of whatever material the client dictates. They then can focus on ensuring that the package’s label is made of a compatible resin, so that the resulting mono-material solution is easily recyclable. Jabil also is striving to incorporate as much post-consumer recycled resin as possible into their packages.
To that end, Jabil Packaging last summer also introduced a new Sustainable Packaging Solutions program that is designed to help deliver new formats to the market quickly. By doing a life-cycle analysis and considering such factors as end-of-life disposal options during the package’s design phase, the company’s goal is to help steer customers to making optimal material selection decisions.
Jabil Packaging Solutions: www.jabil.com/industries/packaged-goods.html
Jabil Packaging Solutions’ smart packaging approach [VIDEO]: https://jabil.wistia.com/medias/im3ns5yho8
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2 Responses to “Packaging gets smart as CPGs adopt new approaches”
Sorry, but as an engineer, putting IOT gear on product containers seems both overly complex and not very useful. Why not print a code on EVERY product for scanning by smartphone and adding it to a cloud-based shopping list?
Really one of the best articles I’ve read. Thanks a lots It’s really useful for me.