Blackwell Science, LtdOxford, UKFSTFood Service Technology1471-5732Blackwell Science Ltd, 20044397105Original ArticlePackaging demands in food service industryA.

Olsson, M. Petterson & G. Jönson

Peer review

Packaging demands in the food service industry

Annika Olsson, Maria Petterson and Gunilla Jönson
Department of Design Science, Division of Packaging Logistics, Lund University, Lund, Sweden

Abstract

Correspondence: The European food service market was estimated, in 1999, to be worth US$293
Annika Olsson, Department billion with high profit margins and a growth rate of 2.75%. Future demand for
of Design Science, Division of
value-added products and high levels of customization will stress the issue of keeping
Packaging Logistics, Lund
University, Box 118, 221 00
profit margins in the food service industry. Packaging is a critical issue, because it
Lund, Sweden. adheres to the product throughout the entire food service supply chain. Package
Tel: + 46 46 222 97 34; design influences the efficiency of the entire chain in terms of functions, features,
Fax: + 46 46 222 80 60; information and cost aspects. The purpose of this study was to explore the demands
E-mail:
of value-added packaging in the food service sector and was carried out in the UK.
annika.olsson@plog.lth.se
The study shows that there are opportunities to improve packaging solutions to fit
Keywords: better with food service needs. The study also indicates a lack of understanding in
food service, food service the food service sector and that packages can actually add value to the products.
operations, packaging, Suggested opportunities in package development are presented.
package demand
Peer review

Business success is the result of companies’ focusing

Introduction
on the enhancement of the total performance of the
Food service is described as ‘all food prepared or sold supply chain, through which improved value to cus-
for out-of-home consumption’ (Webster 2001) and is tomers is obtained. In order to deliver such value to
known for being a diversified industry. It includes fast customers, Fearne et al. (2001) recommend closer and
food outlets, self-service cafeterias, motorway service longer-term working relationships, even partnerships,
stations, restaurants, bistros, cafés, ethnic restaurants with suppliers at all levels in the supply chain.
of every style, hotels of all classes, and motels, which Gerding et al. (1996) also emphasize the importance
taken together make up one-third of the total food of supply chain cooperation. They say that the whole
market in Europe. The European food service market supply chain has to cooperate to provide safe foods to
was estimated to be worth US$293 billion in 1999, consumers with strongly varying consumption and
with a higher growth rate than the retail market. The buying patterns. Furthermore, products that offer a
annual growth rate for food service was 2.75% com- greater level of added value, for example, through con-
pared to retail growth of 0.5% per year in 1999 (Peters- venience, packaging or branding, command higher
son 2003). The profit margins for food manufacturers margins for food manufacturers.
in the European food service market are relatively high Gerding et al. (1996) point out that packaging is a
according to Grant (2001), ranging from 10% up to critical issue in this matter and a valuable aid in the
70% in some cases. chain. Because a package adheres to the product
The operator is the last stage in the food service throughout the entire value chain, it is important to
supply chain, that is, where food preparation is final- consider the package in the value creation process. Still,
ized and the food is sold, served and eaten. Grant many people see packaging merely as products that is
(2001) argues that operator power will be concen- a ‘necessary evil’ and an unnecessary cost. These view-
trated in a few operators in the future, and thereby points on packaging arise from the limited knowledge
the bargaining power of operators will be stronger. or the limited considerations about what functions a
Operators will demand more value-added products, package has to perform (Robertson 1990). Package
marketing support and high levels of customization, design will influence the efficiency of the entire value
which in turn will lead to decreased margins for chain in terms of functions, features, information and
manufacturers. cost (Olsson & Györei 2002). The largest effects on

© Blackwell Publishing Ltd. 2004 Food Service Technology, 4, pp. 97–105 97

98 Packaging demands in food service industry A. Olsson, M. Petterson & G. Jönson
cost derive normally from packaging collaboration
with activities in distribution (Dominic et al. 2002).
According to the definition of the European Parlia-
ment and Council Directive 94/62/EC, packaging is
defined as follows:
Packaging shall mean all products made of any
materials of any nature to be used for the contain-
ment, protection, handling, delivery and presenta-
tion of goods, from raw materials to processed
goods, from the producer to the user or the con-
sumer. ‘Non-returnable’ items used for the same
purposes shall also be considered to constitute
packaging.
Packaging may be classified as primary, secondary or
tertiary, reflecting the levels of usage (Jönson 2000).
These definitions should be used together with the con-
sideration of packaging as a system, with hierarchical
levels.
The packaging system should be integrated into a
number of functions both internally in the manufactur-
ing company and also in ‘downstream’ functions (Hell-
ström & Saghir 2003). A prerequisite for this is that
when assessing different packaging solutions, the focus
has to go beyond internal costs and profits, and look
both backwards and forwards in the chain (Dominic
et al. 2002). In the food industry, there is already a
concept of integration between primary package and
product development (Bramklev 2003). However, the
same source notes that the full integration of package
and product development is seldom realized; the sec-
ondary packaging design does not start until the prod-
uct is ready for production (Bjärnemo et al. 2000;
Bramklev 2003).
The purpose of this study was to explore the
demands of value-added packaging in the food service
sector, by obtaining detailed information on the current
situation in the food and packaging design industry of
the UK food service market. The study widens the
relevance of the problem presented by exploring the
usage of the package by the different players. Based on
the input from the study, the objective was to see
whether there is any interaction between product and
packaging development in the product life cycle, and
to identify future possibilities for value-added food ser-
vice packaging.
Packaging logistics in food service
product development
The traditional view that packaging depends only on
the product is true as long as the performance of the
product constitutes the single most important compet-
itiveness factor in the market. The approach to the
© Blackwell Publishing Ltd. 2004 Food Service Technology, 4, pp. 97–105
design of the product-to-be represented the most effec-
tive and efficient means of increasing competitiveness.
As adaptation to business, sales, markets, consumers,
etc. has become equally important in dealing with the
competition, the actual use of packaging as an interme-
diary is more interesting than ever. Food packaging
development can be viewed as driven by consumer
desires, distribution needs and new materials, as well
as by the functional, industrial, or legislative develop-
ments that constantly place new demands on packaging
materials (Gerding et al. 1996).
Bjärnemo et al. (2000) suggest a procedural model
to incorporate packaging and logistics into the product
development process. Sonneveld (2000) stresses the
need for integrated product and package development,
in particular with respect to market differentiation.
According to Johnsson (1998), a more dynamic inte-
gration between packaging and logistics would also be
a potential for major advantages. He says that the
package and the logistics systems have to support each
other, and that there will be a possibility to influence
costs and effectiveness in the whole logistics process by
considering the package as a prime element in that
process. An added value from a package has two com-
ponents – a product value and a service value. The
product value can be used to raise the price, while the
service value makes the distribution chain more cost
effective (Johnsson 1998). Packaging systems have
value-adding functions that cannot be connected to
distribution requirements, but still contribute to
increased efficiency through integration in a process.
Furthermore, Johnsson (1998) argues that the role of
packaging is constantly changing, and in the future, its
function will be more integrated with the image of the
product. Concurrent design of product and package
involves design management of the two components
where the procedural model can be used. Thus, if the
package is to be integrated into the product, the devel-
opment of the product and the development of the
package have to take place in parallel (Dominic et al.
2002).
Methods
A qualitative case study was carried out in the food
service sector in the UK. According to Ellram (1996),
case studies focus on situations in real life settings with
a set of relevant boundaries, such as the UK food ser-
vice supply chain used in this study. People from dif-
ferent parts of the food service supply chain were
interviewed, and observations made at different loca-
tions in order to complement the input from the inter-
views. The observations focused on the handling of
packages in working situations at manufacturing plants
 Packaging demands in food service industry A. Olsson, M. Petterson & G. Jönson
Table 1 Number and distribution of interviews
Business Managers People in operations
Operator 1 2 4
Operator 2 2 3
Distributor 3 package for purposes other than handling and trans-
Manufacturer 1 1 portation. In the majority of interviews, extensive dis-
Manufacturer 2 4
and operator outlets. Case study is an approach that
attempts to relate theoretical concepts with reality and
where the findings might be applied and can be valid
in other circumstances (Stuart et al. 2002). Case studies
emphasize the element of understanding, a studied phe-
nomenon, and stress an interpretive approach (Denzin
& Lincoln 1998). Through case studies, it is possible
to examine and understand non-standard forms of
behaviour (Stuart et al. 2002). Following that reason-
ing, a case study is suitable for this research because
only limited research and references can be found in
the area of packaging in the food service supply chain.
The participating companies constitute major players
on the UK food service market, and in total five com-
panies were interviewed. The distribution of the inter-
views is shown in Table 1.
The two operators are both multinational companies
engaged in contract catering with a broad diversity of
clients. They have their operations in company restau-
rants, as fast food restaurants in town centres and in
typical shopping areas. The manufacturers are food-
manufacturing companies in the UK that produce and
pack food and drinks; and the distributor is the inter-
mediary that receives the food from the manufacturer,
stores it and distributes it to the operators. At a man-
agerial level, those interviewed were either in the pur-
chasing and marketing departments, or general
managers; and at an operational level, those who han-
dle or use food service products were interviewed.
In each company, people with different roles were
interviewed with the focus on packaging-related areas
regarding:
1 the usage of packaged products (not asked of
distributors);
2 the handling of packaged products, for example,
deliveries, storage and internal transportation;
3 the sale of packaged products;
4 the process of planning for new/replacements of
packaging.
All interviews were of a qualitative, semi-structured
nature and followed a prepared starting point of open
questions related to the areas above. Wherever possi-
ble, the interviews were tape-recorded, but where inter-
viewees objected, detailed notes were taken during the
© Blackwell Publishing Ltd. 2004 Food Service Technology, 4, pp. 97–105
99
interviews. The areas of questioning were similar for
the different players of the supply chain. However,
specific questions about package usage were only posed
to manufacturers and operators, because the distribu-
tors only act as an intermediary and do not use the
cussions followed each question.
Where interviews were tape-recorded, they were
transcribed and then subjected to a detailed analysis by
three researchers. The transcribed text was indepen-
dently analysed by each researcher and categorized into
commonly defined areas: (i) criteria for package selec-
tion, (ii) sector-specific package requirements, (iii)
problem areas, (iv) good and bad packaging, and (v)
roles of packaging. Where notes were taken during the
interview, these were treated in a similar way.
In order to confine the presentation of the findings
to the relevant issues with reference to the objective of
this study, the main answers and information are
shown in the relevant tables while the main findings
and most pertinent issues are raised specifically in the
text.
Results and discussion
The main results show that there are great opportuni-
ties to improve packaging solutions to fit better with
food service needs. Furthermore, at present, there is
limited integration between product development by
manufacturers and package development undertaken
by suppliers in the food service sector. This is exempli-
fied by one of the interviewees:
In food service you just have to deal with the kind
of packaging that is available for that type of
product.
The basis for packaging decisions differs among the
different companies of the study. Some companies still
see the direct cost of packaging as the main issue for
decisions, and packaging solutions that fit into already
used configurations are looked for, as cited from an
interview with one operator:
When ordering you look solely at the price – the
package is not considered.
In this case integrated development is disregarded.
However, in the study another operator company has
developed their view on packaging from merely being
a protector of the product to being a functional unit.
This means that they always look beyond packaging
currently being used when introducing new products,
and for integration with customers when taking new
packaging decisions. However, most commonly still,
100 Packaging demands in food service industry A. Olsson, M. Petterson & G. Jönson
when launching a new product, as indicated by the
input from the other companies in the study, the pack-
age is not specified and the integration between opera-
tor and supplier is limited. The criteria for choosing a
specific supplier are global deals and price negotiations
and not packaging, and in particular not back-of-house
packaging. When deciding on type of packaging, only
ready available packaging solutions are considered. As
cited from one interview:
No supplier has ever explained the benefits of a
specific package during negotiations. Packaging has
low priority and will not be on the agenda unless
the supplier brings it up.
None of the respondents said that manufacturers are
in a powerful situation compared to distributors or
operators, implying that they cannot do anything that
opposes what their customers demand of products.
However, according to many respondents, operators do
not require packaging that goes beyond what has been
used traditionally. On the other hand, some operators
do not feel that they have a say when it comes to
packaging decisions. The manufacturers in the study
consider intermediaries such as distributors or whole-
salers as a ‘necessary evil’ to reach the fragmented
market. In other words, according to manufacturers,
intermediaries do not have a say regarding the products
or the packages, except when it comes to distributors’
own brands. It is, however, interesting to note that even
though packaging seemed to be of low priority for most
respondents, the desire for cooperation with food man-
ufacturers to find improved packaging solutions was
expressed.
Table 2 summarizes the important characteristics
and roles of packaging found in the study of operators,
distributors and food manufacturers.
A number of new packaging characteristics that
would benefit food service operators were identified in
the study.
Operator benefits
Up to date, packaging is not a big issue in purchasing
decisions for the operators interviewed. Instead, price
and quality of products are the decisive factors, and
then they accept whatever package the chosen products
come in.
However, operators can provide many examples of
packaging-related problems and can also give many
examples of good packaging as well as bad packaging.
The observations carried out after the interviews con-
firmed and emphasized the operators’ views. This pro-
vides evidence that the demand for more appropriate
and more functional packaging will increase. The char-
© Blackwell Publishing Ltd. 2004 Food Service Technology, 4, pp. 97–105
acteristics of packaging presented in Table 2 can help
indicate what are more appropriate and more func-
tional packages for food service operators.
Distributor benefits
The distributors’ requirements derive from the desire
to make deliveries from manufacturers, picking, trans-
port and deliveries to customers more efficient. A
requirement is that products arrive at customers in
optimum quality both of the product and the package.
The distributor cares most about the outer case pack-
age during transport, whatever package that may be.
Still it is also important that neither the primary pack-
age nor the quality of the products is affected during
transport or storage.
Manufacturer benefits
The two different manufacturers had quite different
views of packaging, where the first manufacturer’s view
was that the only role packaging had was to hold the
product. The consequence was suboptimal cost and
suboptimal performance for this manufacturer. That
view has recently changed into the present view that
boring bulk packaging is history in food service and
that the role of the package is emphasized much more.
Economies of scale are looked for but at the same time,
the customer is more involved when it comes to decid-
ing on packaging. Environmental concerns are also
more in focus, and the packaging characteristics from
the first manufacturer can be summarized as:
1 promotion of brands (said to be as important as in
retail);
2 being functional;
3 the package should be a way to differentiate prod-
ucts from competitors’;
4 real end user benefit;
5 create added value for the customer.
The other manufacturer had a rather different view.
They think that the three most important characteris-
tics to consider in a good packaging solution are:
1 low direct cost of packaging;
2 high quality;
3 service (the packaging manufacturer has to service
packaging machines).
One of the objectives of the study was to identify
problem areas in food service that do not necessarily
seem to be related to packaging but where packaging
could be part of the solution. Table 3 presents problem
areas in the food service sector that can be considered
as opportunities for the packaging industry.
Based on this research, Table 4 summarizes ideas
where new kinds of packaging can solve problems and
 Packaging demands in food service industry A. Olsson, M. Petterson & G. Jönson 101

Table 2 Characteristics and roles of packaging to different sectors

Operators Distributors Manufacturers

No matter if it is secondary or primary packages

Back of house • Provides satisfaction of customer
• Low share of product price requirements
• Provides thorough descriptions of contents • Real end-user benefit
• Provides easy identification of products • Performs well in filling machines
• Makes products easy to find and recognize • Provides cost-effective handling
• Makes it possible to differentiate between and delivery, e.g. max pallet
products also in dim lights utilization
• Robust, enough for preventing impact on the • Comprises as few units as possible.
package and products from transport and storage The fewer items you have to manage
• Protects the product for all its duration of shelf storage levels for the better it is
life • Ideally there is some form of unity
• Provides warning if weight is excessive between different solutions, e.g. one
• Right size offered or two dimensions used for different
• Easy to dispose packaging, which provides unity in
• Provides hygiene plants on how to handle containers
• Minimizes waste • Provides protection through the
Front of house supply chain
• Attracts customers’ attention • Minimizes environmental impact
• Directs the target group • Differentiates products from
• Good looking and appealing competitors’
• Provides good-looking shelves • Promotes the brand
• Presents the product appropriately • Makes possible a price and
• Displays the content quantity¢ according to customer
• Convenient and user-friendly for users, including needs
easy to open and reclose

Primary packages
Back of house
• Provides easier and more practical use of • Needs to be robust enough
products during transport, where cases are
split
• Possible to reseal or at least reclose the package • Should help protect sustained
(unless the package is used in one all at once) quality of the product when
moving through the supply chain
• Easy to open and reclose • Should be robust enough not to
• Provides resistance to heat get damaged when moving
through the supply chain

Secondary packages
Back of house
• Appropriate case sizes and volumes • Easy to handle and move
manually
• Clear labelling on more than one side • Robust enough to not fall apart
• Easy to open • Clearly labelled for quick
identification also from a distance
and in dim lights
• Ideally but not necessarily
labelled with food ingredient
contents
• Bar coded for easy identification
and traceability
Environmentally friendly to
minimize taxes
No excessive weight for ergonomic
reasons and to lower weight
during transport

© Blackwell Publishing Ltd. 2004 Food Service Technology, 4, pp. 97–105

 Table 3 Areas identified that provide opportunities for improving packaging
102

Issues deriving from the
development of food service
– The role of packaging
is not realized.
‘Generally in food service
packaging has low priority.’
‘We don’t really see packaging as
something that can be improved.’
– The food service market is static
at the moment but most likely will
continue to grow.
– Food service is changing from
being craft operations into running
a business.
– Important interface area between
retail and food service.
If people get hungry they want
food no matter where they are.
Eating out is less formal today.
The interface area might eat up
some of food service’ growth!
More and more environmental
concerns.
Issues deriving from food service
outlets
– Deskilling in the food service
work force.
– Portion control is important for
cost control.
– Convenient use of products in
kitchens.
– Efficient storage.
Different opinions if primary or
secondary packages are most
appropriate in storage.
Hard to differentiate between
different products because the
packaging often looks very similar.
Original packaging is emptied and
replaced withnew ‘storage
containers’. Products are kept in
metal bins for mice protection.
– Ordering.
When packages look similar
ordering takes longer time.
It is often necessary to open
each package to see how much is
Issues deriving from end-
consumers
– Time-pressured consumers want
convenience.
Products have to be clearly visible
and displayed so they are
noticed and easy to find.
– Time-pressured consumers run
errands during lunch.
– Time-pressured consumers want
to eat lunch at their desk.
– Consumers want to eat on the go
to save time.
‘You should be able to eat and
drive at the same time.’
– Snacking is becoming important.
Handheld individual snacks
are demanded.
– Consumers want to see a wide
variety of choice.
– Increased health concerns.
Moving and receiving goods
– A significant proportion of
products require splitting
cases.
Primary package is outer
case during transports.
– Often mixed pallets.
Unload and reload pallets many
times when arriving at final
customers.
– Delivery schedule not followed.
Goods stand around waiting until
someone gets the chance to take
care of it.
– Moving goods is a heavy job.
‘I have to go to the gym to be
strong enough for my job.’
Packaging to stimulate
increased sales
– A better targeting of offers is
needed.
– New innovative offers have to be
presented frequently.
– Packaging in food service has to
reflect the products better than they
do today.
– Packaging should be a way to
lock in customers to buy more.
– Packages have to provide product
visibility.
– Good-looking shelves, front of
house, are extremely important.
‘It is very ugly when you see the
barcodes . . .’
Front-of-house packaging should
look like it contains more
than it actually does.
Packaging demands in food service industry A. Olsson, M. Petterson & G. Jönson

left, which complicates ordering.

– Shortage of space in storage.
Many overloaded shelves.
Goods on the floor.
Messy.
– Packaging waste is bulky.
‘We have rubbish
everywhere.’
– Improved shelf life is
wanted.
You would want the same
quality the day of opening the
package as 6 months later.
– Minimization of product
waste is required.
– There is time pressure in
kitchens.
Under stress, kitchen staff
mistakenly do not take food
safety, hygiene or

© Blackwell Publishing Ltd. 2004 Food Service Technology, 4, pp. 97–105

instructions into account.
 Table 4 Benefits of new characteristics/roles of packaging

Type of benefit

Roles/characteristics of packaging Improved Easier Product Minimization More Less strain

for solving problems or catching Time food More tasks cost Better of product space on staff/ Stronger Adjustment to
opportunities saving safety convenience in kitchens control taste waste in storage shelves marketing fragmentation

Packages should make it possible to eat C C O

wherever the consumers want to eat
Packages have to take the deskilling of O C, O O O O C
the workforce into account
Packages have to provide portion control O O C O
Packages have to work better in storage O O O, D, M O, D, M
Packages should make the ordering O O
process easier

© Blackwell Publishing Ltd. 2004 Food Service Technology, 4, pp. 97–105

Packages should enable improved shelf O, D, M O, D, M O, D, M
life
Packages have to work for food safety C, O, D, M O
Packages should be possible to empty O O
completely
Packages should assist consumers in C, O O
their choice of products
Packages should provide with more O C
variety in product offering to target
different needs
Packages should provide product O
visibility
Packages have to fit with other packages O
Packages should fit with less formal C, O C C, O
eating out occasions

C, consumer; O, operator; D, distributor; M, manufacturer.

Packaging demands in food service industry A. Olsson, M. Petterson & G. Jönson
103
104 Packaging demands in food service industry A. Olsson, M. Petterson & G. Jönson
where opportunities for packaging can be exploited,
and also whom in food service they will primarily ben-
efit. Table 4 indicates that it is primarily operators who
can benefit from the new requirements, but it is impor-
tant to keep in mind that what will benefit operators
will also benefit distributors and manufacturers
because of operators’ preference. Thus the whole chain
will most likely benefit.
If the question is raised about which sector – manu-
facturer, distributor, food service operator or end con-
sumer – packaging is prioritized, this paper suggests
that it is not prioritized for anyone at present. Rather,
the basis for packaging decisions today is a compromise
between, firstly, what the manufacturers think the cus-
tomers need without asking them, and secondly, the
equipment, materials and machinery available. Packag-
ing applications in food service originate from produc-
tion and distribution demand, rather than customer
and consumer demand, and this is where a major prob-
lem is, the failure to understand what packaging can
accomplish.
Many respondents have seen packaging as a ‘nec-
essary evil’ that costs money. It is essential to deal
with this preconceived notion about packaging
before packaging can acquire a stronger position and
gain a more appreciated role in food service. It is
important to consider whether added costs of pack-
aging in one place will reduce costs somewhere else.
For example, time saved can be translated into
money, and so can reduce the need for storage
space. Another way the package can lead to reduced
costs is to have a package that minimizes product
waste.
As a consequence of the role of packaging in food
service being perceived as insignificant, the communi-
cation of packaging issues is also negligible. However,
we argue that there is a need for communication about
packaging issues in the supply chain. Supply chains will
compete with supply chains instead of companies com-
peting with companies. Thereby a higher direct cost of
packaging is justified if it can benefit the supply chain
as a whole.
Conclusions
This study concludes that there are great opportunities
to improve packaging solutions to fit better with food
service needs. The study also indicates that there is a
lack of understanding in the food service sector that
packages can actually add value to the products and
thereby contribute to profit margins. One can also
conclude that at present there is limited integration
between product and package development, and also
limited integration between the different players in the
© Blackwell Publishing Ltd. 2004 Food Service Technology, 4, pp. 97–105
supply chain, regarding packaging issues. This is espe-
cially true when it comes to logistics. Properly
designed packaging to improve handling in the food
service sector would require suppliers to have a good
knowledge about the flow of goods to the different
food service sites. In addition, the supplier needs to
understand the customers’ planning systems in order
to help the food service outlets become effective. Fur-
thermore, the supplier ought to have sufficient insight
into the food service industry so that it could influence
the customer’s’ handling systems. Finally, the supplier
needs to have an insight into the identification technol-
ogy that the food service industry uses to improve
handling efficiency.
Based on packaging characteristics mentioned by
the different players and problems experienced in
the food service supply chain, opportunities for
food service package development are suggested.
Table 4 indicates who will benefit from solving the
problems identified, but with a more holistic view
on the supply chain, the entire food service supply
chain will most likely benefit through integrated
problem solving. Through integrated product and
package development based on cooperation between
the different actors, more convenient packaging
with better functionality in the different steps of the
chain will be developed. This will lead to an
increase in sales through better customer accep-
tance, and also to more efficient handling through-
out the value chain, from which the entire chain
will benefit.
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