Driven primarily by retailers&39 bottomline targets, steady growth in the market for retailready packs rrps to 2016 will provide new opportunities for suppliers. According to new pira international research, demand for rrps will reach 27 million tonnes by 2016, up from a 19 million tonne 2010 base. Retailready packaging refers to packaging systems typically made from corrugated board, solid fibreboard or rigid plastic.
Designed to alleviate the process of instore stock replenishment, whilst at the same time enhancing the shopping experience for the consumer, it provides benefits to the total supply chain. Rrp includes systems referred to as shelfready, displayready or shopperready. Retailready packaging is a highgrowth niche in the overall packaging market. New primary research from pira international assesses the key drivers influencing this market and analyses trends to 2016. The future of retailready packaging to 2016 quantifies and segments the market according to pack type, country and end use for the period from 2001 to 2016, across 14 countries and 22 enduse sectors.
Over time, and under pressure from retailers seeking to improve instore efficiencies, rrp has emerged as a system designed to reduce the amount of handling required to place products on the retail shelf whilst providing the consumer with easy access to products. Numerous benefits have been identified for these rrp systems, including &bull both consumers and store employees indicating better product recognition &bull &lsquoonetouch&39 shelf replenishment &bull streamlined restocking &bull less product damage and more attractive, neater shelf appearance developed regions are relatively mature markets for rrp, though some opportunities still remain, but highgrowth can be found in the emerging economies of latin america and asiapacific.
China is the fastestgrowing market and pira expects it to increase its share of rrps from 15 in 2010 to almost 18 by 2016. Key drivers of rrp consumption range from macroeconomic factors such as population growth, down to microeconomic influences such as printing technology developments and the use of whitetop liners. By far the majority of rrps are used in food merchandising, making up nearly 78 of the total. Beverages contribute a further 16 and nonfoods make up less than 6 in 2010. Pira expects this to change over the medium term as nonfoods increase their share of rrps to 7, beverages grow to over 18 and foods reduce to threequarters of the 2016 market.
Consumption of food and beverages in the countries covered by the study exceeded 6.2 billion tonnes in 2010 and this is expected to grow to nearly 9 billion tonnes by 2016. Food products accounted for 63 of the primary packs used in the distribution of these products. Liquid beverages made up a quarter of that and the balance was in nonfood sectors. Pira expects food products will increase their market share to twothirds of the 2016 total. Secondary packaging is also used mainly in food distribution, accounting for 66 of the 2010 market this is expected to grow to 68 by 2016. Despite the adverse effects on traditional grocers and corner shops, consumer demands have led to an ongoing increase in the number of supermarkets and hypermarkets. The top ten retailers operate almost 60,000 outlets between them.
Developing countries offer considerable opportunities for retailers and suppliers of packaging, including retailready packaging which is still in its infancy in some of these regions. Most if not all of the major retailers globally have adopted or are in the process of adopting some form of rrp. A number of major chains are working closely with suppliers of products and packaging systems, as well as distributors, to improve the efficiencies of their instore operations and enhance shopping experiences for consumers. This has led to a number of innovative developments.
Cost control is one of the prime movers in the development of rrp systems. Retailers are under constant pressure to reduce cost and improve margins whilst still providing a pleasant shopping experience to consumers. Rrps enable retailers to achieve significant cost savings by reducing labour costs, improving productivity and reducing outofstock situations, etc. A significant proportion of distribution costs are incurred in the final 50 metres of the journey from the distribution centre, between the store back door and the retail shelf. Streamlining this operation, for example by introducing onetouch display systems, can have a marked effect on profitability for the retailer. Rrp can be of great benefit to brand owners in enhancing their identity in retail environments. Advances in printing technologies, such as flexographic postprint, facilitate the printing of highquality graphics on corrugated cases. This enables converters to produce rrp units that enhance brand identity and allow consumers to recognise the product at the decisionmaking moment while still at some distance from the retail shelf.
Accounting for almost 75 of consumption, corrugated rrps dominate and technology is enabling improved graphics and performance but the material is expected to lose 0.5 market share between 2010 and 2016. Pira expects plastic rrps to show the most significant gains and account for almost a quarter of demand in 2016. This will be followed closely by diecut display containers and modified cases, all gaining at the expense of shrinkwrapped trays and other materials. The growing demand for rrps has increased the need for innovative pack design, especially in corrugated rrps. Plain brown boxes now need to be far more complex in both appearance and performance with a need in some cases for intricate diecut patterns. This trend can be seen in the growing demand for diecut boxes in europe, which is set to increase from about 38 of total shipments in 2001 to nearly 45 by 2016.
