New Trends in European Corrugated RISI International Containerboard Conference Edwin Goffard, Smurfit Kappa 14 th November 2018
Confidentiality Notice The content of this presentation is proprietary and confidential information of Smurfit Kappa Group. The recipient may not distribute, copy, print or otherwise use information from this presentation without the written consent of Smurfit Kappa Group. 1
About Smurfit Kappa 2
Smurfit Kappa - Position 3
European Corrugated Market Prediction? Source: ICCA, SK Market Research & Intelligence 4
Year on Year Growth 2000 - 2017 Source: ICCA, SK Market Research & Intelligence 5
Where will we be in 2023? 6
The European is Changing... Market
My biggest fear as a teenager......
3 biggest fears now
The golden age of the consumer
MORE YOUTUBE VIDEOS WERE WATCHED 60 IN 2017 VS 2016 TIMES EVERY MINUTE CONSUMERS ARE WATCHING 4,100,000 VIDEOS ON YOUTUBE
WE RECORD AND POST EVERYTHING…. ALSO OUR PACKAGING EXPERIENCES 12
TODAY THERE ARE AROUND 18,400,000 18.4 UNBOXING VIDEOS ON YOUTUBE MILLION
Consumers are 71% more likely to buy a product 71% based on social media referrals 14 *Source: Hubspot
The increased awareness around plastic ocean is a clear example of the power shift towards consumers The awareness in the world on the size of the problem is growing
More than double the amount of tweets surrounding plastic (2018 Q1 compared to Q1 2017) 16 Source: Brandwatch online trends April 2018
Three main challenges for our customers How to face the consumer anti ‐ plastic sentiment? How to drive sales in the different sales channels? How to deal with the complexity of omni ‐ channel? Opportunities for paper based packaging! 17
Anti plastic sentiment 82% of shoppers prefer paper ‐ based packaging above plastic* Source: Smurfit Kappa ShelfSmart research with 300 shoppers in Germany
Retailers 19
... more Retailers 20
... And Customers "Nestlé announces vision to mak "Nestlé announces vision t make "LEGO Gr "LEGO Group aims f oup aims for 1 or 100% 00% 100% of its pack 0% of its packag aging recy ing recyclable or clable or sustainable sustainable pack packaging b aging by 2025" 2025" re-usable b re-usa by 2025" 2025" 22 April 2018 (Press Release) 10 April 2018 (PRNewswire) "Coca "Coca-Cola announces ne Cola announces new w packaging vision, int pack aging vision, intends t ends to collect collect "Unile "Unilever r and V and Veolia olia sign a collaboration sign a collaboration and recy and recycle cle 100% of its pack 00% of its packaging aging agreement agr eement o on Sustainable Pac ainable Packaging. T aging. The t e three- ee- by 2030" y 2030" year par ar partner nership will im hip will impr prove w e wast ste collection e collection 19 January 2018 (Business Wire) and recy and recycling infrastructure t cling infrastructure to help creat help create a a circul ular ec ar econom onomy f for pl plast astics w cs wast ste" e" 24 October 2018 (Press Release) 21
... And Authorities Source: The Guardian, 25 Oct 2018
The Market Demand for Alternatives
A greener alternative 82.3% of Europe/s paper ‐ based packaging is recycled, beating all other packaging materials. Source: EU report 2014
Three main challenges for our customers How to face the consumer anti ‐ plastic sentiment? How to drive sales in the different sales channels? How to deal with the complexity of omni ‐ channel? Opportunities for paper based packaging! 26
The brand's most valuable ad space in every sales channel Retailer or Convenience Hypermarket Store Typical reference box Discounter eCommerce
Impact on paper-based packaging paper-based packaging is seen as an growth enabler by all sales channels Super/Hypermarket Discounters E ‐ commerce Expected growth till 2021: <1% p.a.* Expected growth till 2021: 3% p.a.* Expected growth till 2021: ca. 20% p.a.* Parcel volume will The market for Shelf Of the products are in continue to rise 17 ‐ 28% 17 ‐ Ready Packaging is 4% 90% Shelf Ready packaging in each year between 2017 projected to growth 4% 28% discounters and 2021 annual to 2021 Source: Smurfit Kappa Source: PItnbey Bowes parcel index, 2017 Source: Smithers Pira, 2016 *Source: IGD data, 2017 28 28
Many departments are growing their depth of assortment far faster than they are growing revenue 29 Source: Shaping the Future of Retail for Consumer Industries, A World Economic Forum project in collaboration with Accenture , January 2017
23% 22% 21% 20% 19% 18% 17% 16% In Europe discounters generate 22% 15% of all FMCG sales 14% 13% 12% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Nielsen Retail Measurement Service 2018 30 Source: Nielsen Retail Measurement Service 2018 Source: Nielsen Retail Measurement Service 2018
But E-Commerce is the fastest growing global channel Source: IGD data, 2017 31
Advanced eye tracking technology
Accolade Wines – Shelf Ready Packaging example +13% Sales increase
IT IS NOT A DIFFERENT CHOICE IT IS A GREATER CHOICE
Three main challenges for our customers How to face the consumer anti ‐ plastic sentiment? How to drive sales in the different sales channels? How to deal with the complexity of omni ‐ channel? Opportunities for paper based packaging! 35
The new reality in the Supply Chain
Efficiency: Managing the Complexity 37
The new "customer" of packaging Omni ‐ Channel 3PL P A Pure Players Merchants C K A Market Place Producers G I N Governments & Environmental Agencies General public G
Delivery re ‐ invented
Delivery re ‐ invented?
E-Commerce is a less controlled supply chain 41
Driving supply chain performance by packaging 42
Paper based packaging for the future Sustainable Ready for omni ‐ channel Flexible Role of the Paper and Corrugated associations to push this message 43
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