Tetra Pak Index 2018

What opportunities does smart packaging offer food and beverage producers in online grocery?

Pack Summit, 31 October 2018

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• Growth of Online Groceries

• The changing landscape

• Opportunities opening up for F&B producers

• Q&A session

What we are going to discuss today…

The 11th annual Tetra Pak Index

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Introduction

AC/Monday 25 June

The Growth of Online Groceries and the impact on Retail

WE ARE SHIFITNG FROM PRODUCTS TO RELATIONSHIPS

Products

1970s

Products + Services

1990s

Customer Centric2000s

Relationship centricToday

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A Changing Landscape

Consumers are looking for a fast and easy shopping experience

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Creating new macro trends

5,85,85,85,8

4,44,44,44,4

4,54,54,54,5

6,46,46,46,4

Online Grocery shopping Frequency in 2018

6,86,86,86,8

Monthly Monthly Monthly Monthly

averageaverageaverageaverage

AC/Monday 25 June / 6

A catalyst for wider industry transformation

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Leading to a strong rise in online grocery

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While online is growing faster than other channels, the picture varies market by market

… are shaping the online grocery marketplace

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Four key trends

Convenience Sustainability Personalisation Technology 1 2 3 4

AC/Monday 25 June

Responding to the new trends within e-grocery

TAP 6/ December 2016 / 12

How to respond to position your business for future ?

4 Key Trends driving growth

E-retailer &

Consumer Feedback

Renewable packaging

Robust and non-leaking packaging for first moment of truth

Convenience Technology Sustainability Personalization

Desktop and Mobile friendly designs,

integrated offline and online experience

Logistically optimisedsolutions – optimal

weight and size

D2C opportunities for non-retail brands

Physical stores evolving digitally and capturing

data

Convenience Sustainability Personalisation Technology

Ease of replenishment, favourites and

personalised lists

Super fast same day delivery that can be

tracked

Seamless, frictionless consumer experience = Omni-channel

Track and Trace

Consumer engagement and data capture

Unique digital code identifier

Minimal secondary package Personal experiences,

packaging and products

As delivering in sustainable manner becomes licence to operate

The Key Elements of the Changing Landscape

Retailers

ConsumerRaw

material Production

Customer Manufacturing

Food Service

The battle for the consumer intensifies, as new cha nnels emerge

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Omni-Channel

Retailers

Consumer

Raw material

Production

Food Service

The battle for the consumer intensifies, as new cha nnels emerge

Customer Manufacturing

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Retailer rivalry

Power of Buyers

Threat of new

entrants

Power of suppliers

Threat of substitutes

New pure-play & hybrid digital competitors risingGoal: disrupt business model & overtake consumer interaction-E.g.

-Amazon-Ocado

Increased pressure on suppliers

Innovation & investment in food serviceDifferent models to cater to specific needs:

-Home delivery -Meal-box subscription

More choice and new digital players creating new co nsumer needs:E.g.- Online grocery

Intensified pressure in retail industry leads to an increased power shift

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Source: PlanetRetail RNG

Alibaba to become largest retail by 2023Changes rewriting the global ranking of retailers

Rank 2012 Sales (€ bn) Est. 2018 Sales ( € bn) Est. 2023 Sales ( € bn)

1 Walmart: €504 1 Walmart: €563 1 Alibaba: €998

2 Carrefour: €128 2 Alibaba: €414 2 Walmart: €583

3 Seven & i: €121 3 Amazon: €352 3 Amazon: €538

4 Tesco: €116 4 JD.com: €217 4 JD.com: €378

5 Costco: €103 5 Costco: €143 5 Pinduoduo: €227

Predominantly ecommerce-based retailerPredominantly store-based retailer

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But going omni-channel is difficult operationally

Consumer

Home Delivery

Brick & Mortar Store

Customer Manufacturing

Fulfillment Centre Home Delivery

COST

COST

E-COMM READY SUPPLY CHAIN

SUSTAINABILITY

SUSTAINABILITYCOST

LOYA

LTY

COST

The Opportunities Opening up

New business models give new channel opportunities cross-boundaryDigital disruption is changing the game

1

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Bricks & Mortar

CPG Online pureplay

Start-ups and small

brands

1

1

2

3

4

23

4

Retailer brands

Direct 2 Consumer

Food Service

Start-ups and small brands

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Understanding the new consumer journey

Last Mile

Receive

ExperienceResearch

Order

Zero moment of truth First moment of truth

Share

Unwrapping

experience

Sharing

Package shape and design impacted

logisticsReceive

Order

Zero moment of truth

First moment of truth

Second moment of truth

Share

Sharing

Delivery

Unwrapping

experience

Third moment of truth

Second moment of truth

Share

Unique code-based consumer engagement solutions

► Now smart packaging allows each carton to be tracked, monitored and interacted with throughout the supply chain, creating new opportunities for efficient stock management, distribution and automation. It creates new opportunities for consumer interaction too

► We are re-inventing the package by adding a layer of digital experiences for the consumer, for example first piloted unique code-based customer engagement solution with Binzagr CoRo’s SunTop orange juice in Saudi Arabia in January 2017 and is now being used by Puleva, in Spain, for a promotion for its flavoured milk drinks and many others.

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The key to technology is digital printing

AC/Monday 25 June

Packaging global volum

e driverD

igitalisationof things

10 BillionAPPLIANCES

100BillionAPPAREL

10TrillionCONSUMABLES

Our journey to an intelligent packaging platform

ConnectedPackage

IntelligentPackage

Codified Package

Fast-growing online grocery is a major disrupter of the entire industry

1. Offline and online are merging

2. Convenience is the main driver of online grocery

3. Mobile is the device of choice

4. Delivery is getting faster

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Summary

5. Personalisation is crucial

6. Direct-to-consumer models are increasing

7. Packaging specifically designed to survive in eCommerce is vital

8. Smart packaging can unlock opportunities

Initials/YYYY-MM-DD / 26

Thank You!

Questions

The Tetra Pak report can be downloaded here: http://www.tetrapak.com/tetra-pak-index

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