By Darren Milligan, Vice President and General Manager (ASEAN), Avery Dennison  

In the diverse and dynamic region of Southeast Asia, a shift is taking place within the consumer landscape. Influenced by rising demand from consumers with increased spending power, greater knowledge, and more sophisticated tastes, two major trends stand out — premiumisation and sustainability — which are now requiring brands to consider both the environmental impact of packaging as well as how to keep products standing out on the shelf.  

Premiumisation simply means the use of product traits and features to influence consumer perception, increasing their willingness to pay more for products or services. The key driver for this is the shifting economic power in ASEAN and a burgeoning middle class. It is projected that the number of middle-income and affluent households in economies such as Vietnam, Indonesia, and the Philippines will grow by 5 percent annually through 2030.   

This is coupled with population changes such as urbanization, an increase in households without children, and a more educated younger generation. Furthermore, the penetration of smartphones and the internet are also creating more knowledgeable consumers — who now have more ways to purchase personalised, niche products through e-commerce, regardless of location.  

Fueled by all these changes, new consumer demand is emerging. As disposable income grows in the middle class, individuals are willing to pay more for products that offer quality, aesthetics, and a premium experience. However, their education and awareness are also developing when it comes to product selection and the environmental impact of the packaging they come in. As a result of a stronger sense of responsibility, consumer demand for more sustainable packaging options is accelerating.   

Businesses are always seeking to appeal to consumers and keep up with their changing buying behaviors. This creates opportunities for the pressure-sensitive (PS) industry, a labelling technology that benefits brands through its versatility in design and the operational efficiency it enables, along with its capability to support sustainable packaging — a growing requirement. We will see a greater focus on how brands take advantage of such technology to innovate in both visually attractive and cost-effective sustainable packaging that connects to consumers.  

On this journey of rapidly evolving industry trends influenced by consumer behavior and buying patterns, we can see a clear difference in the approach of global brands compared to local brands.  

The approach of brands — globally and locally  

Global brands are leaning forward, driving cost-neutral sustainable packaging solutions and design practices driven by their own global agenda and goals. Their approach is more propelled as a response to consumer demand and legislation in more mature markets and executed locally as part of a global mandate.  

By contrast, local brands currently are more likely to be guided by packaging regulations and compliance, with a primary focus still on the cost of goods. In the medium term, they will be driven by regulatory mandates on sustainability, which are now beginning to take shape. While governments across ASEAN are at different stages, they are all on the path to establishing a vision, legal framework, and industry design guidelines. The development of EPR (Extended Producer Responsibility) frameworks and the continued investment in recycling capabilities for rigid plastics will create more requirements and opportunities for the labelling industry.  

Value chain collaboration   

With the upsurge of sustainability and the downfall of overpackaging, brands, converters, and printers, and packaging manufacturers and suppliers alike are innovating ways to simplify packaging to offer more with less.  

“Everyone has a role to play in this ecosystem.”  

Label converters are a huge influence on brands, helping them stay ahead of packaging trends and informed of their material options and the sustainable solutions at their disposal. Converters can guide brands to create packaging that uses less virgin material, less material overall, and enables easy and efficient recycling — all while delivering the performance needed to reach and engage with consumers.   

Labeling solutions companies, such as Avery Dennison, play a critical role at the center of the value chain, ensuring labels are made using less raw materials, contain recycled or renewable content, and are responsibly sourced. Most importantly, labels, although small, enable and improve the recyclability of HDPE and PET containers or bottles to ensure the highest yield and reuse possible is achieved. Facilitating this requires sustainable labelling materials to move from higher-priced specialty products to a cost-relevant and locally accessible standard portfolio.   

Moreover, the evolution of carbon footprinting tools will help the industry to make a thorough measurement of the impact of labelling products and support more data-driven decisions between PS labels and alternative decoration technologies.  

“The expansion and greater utilization of recycling programs for label liner waste, such as AD Circular, will also provide the additional potential to positively impact the sustainability objectives of brands.”  

In conclusion  

The changing demographics of ASEAN create new opportunities for the labelling industry to premiumize products and act as a tremendous marketing tool to influence consumer perception. The emerging need for sustainability will only require a greater focus on design for sustainability, involving conscious design choices that optimize recyclability and minimize waste and environmental impact. Together, as an industry, we need to embrace this growing change and continue our commitment to a more sustainable packaging future.  

 About the Author 

Darren Milligan has more than 20 years of progressive experience in various senior roles across Avery Dennison, including in the United States and Hong Kong. He was the Vice President of Marketing for Labels and Packaging Materials in the Asia Pacific before taking up the ASEAN leadership role in the organization.   

In his current role, he drives strategic initiatives for the business in one of the most dynamic geographies while ensuring a positive and sustainable impact on the communities Avery Dennison operates in.   

Darren holds an MBA from Monash University and a Bachelor of Business from Deakin University.  

This story first appeared in our November-December 2023 issue: Savoring Innovation: A Glimpse Into Tomorrow’s Pantry.