Binning the packaging problemmercoledì 12 giugno 2019
From Planet Earth imagery of sea turtles, to dire UN reports on climate change, the pressure on consumer companies to drive industry change in packaging has been rising relentlessly. We are already seeing responses from regulators (the UK government announcing a plastic packaging tax) and retailers (UK supermarkets signing up to the Plastic Pact).
Within this context we are fascinated by a packaging-free Canadian business that may have seemed ahead of its time when it was founded three decades ago, but today is hitting its stride whilst breaking industry paradigms.
Welcome to Bulk Barn. These mid-sized stores are not at first glance exceptional, with standard grocery aisles and a cheery, low price feel. However within the aisles packaged items are substituted with large wheelie bins and plastic containers, from which consumers can scoop whatever quantities they need into packaging they bring from home or purchase in-store. The offering goes beyond the obvious (cereals and nuts) and into many other categories (pastas, spices, baking ingredients, sweets, nut butters etc.), with the boast that the current range is over >4000 items.
The existence of a “green” / low packaging proposition is not surprising, nor that this proposition includes a broad, high quality range that satisfies the consumer trend towards fresh and unprocessed. More surprising is its value positioning. Its tagline “A lot of quality. A lot of choice. Just a little price” shatters the received wisdom in the industry that quality, sustainability and high price tags are a necessary trinity.
Also surprising is that it has been able to achieve such scale – with over 250 stores across Canada and more locations opening every year. This is not just a concept store, nor a niche urban offering, but instead a widespread and democratised retail solution which has clearly found a sustainable consumer base - with this likely drawing from different consumers archetypes (the eco-friendly, the value conscious and the niche & premium ingredient hunters)
Clearly until the proposition includes fresh household staples this is not a ‘one-stop’ shop, but it is well positioned for a stock up mission. And the business model could have some key advantages from a retail perspective. For example without separately packaged items store labour (a growing retail concern) can be kept to a minimum, and cutting out packaging (and many middle men entirely) can reduce overall costs – which can be passed on to consumers in tight pricing environments.
Perhaps addressing the packaging crisis need not be as complicated as first perceived? But if this could be the solution, different players in the value chain should be asking what this disruption would mean for them.
- Brand owners: How would you defend your brands – what form might your communication take if packaging were eliminated? Are you think about packaging in the right way and do you understand the potential risk in your categories?
- Break & Pack players: How would you reshape your role and service offering if consumers start to do this for themselves?
Whilst Bulk Barn is just an illustrative example from one market, any movement in this direction could represent the biggest reset to how shelf space is used in the history of grocery – how to turn this into an opportunity is a challenge worth thinking about.
Getting a taste for success
Consumer goods companies are right to embrace the trends such as health, indulgence and convenience that currently underpin product development in food and drink. But being topical doesn’t mean you’re always doing the right thing