A bottle of Pepsi is mostly water, with a bit of flavoring and some carbonation added in. Pepsi has long been possible to carbonate at home, and the syrups are easily measured and mixed. But offering a tiny flask of concentrated liquid shelved in stores next to an enormous 2-liter bottle of the premade stuff was always a tough sell to consumers.

Ecommerce, however, has given new life to the concentrate option. Those same small bottles of flavoring take up the same amount of digital space in an online storefront, and offer shoppers more servings per purchase. Pepsi’s parent company, PepsiCo Inc., also benefits from the smaller bottles, since it’s not shipping the water that makes up the majority of the standard 2-liter bottle. That’s part of the reason PepsiCo last year paid $3.2 billion for make-at-home carbonated water company SodaStream, and why PepsiCo is behind the launch of the Drinkfinity, which brings flavored pods to the health-conscious drinker.

These moves make sense for PepsiCo within the context of a rapidly growing ecommerce industry, according to Eric Hiser, technical vice president at the International Safe Transit Association, which offers testing and develops standards for packaging. PepsiCo is taking these old ideas that couldn’t survive on retail store shelves and reviving them for an online world, he says.

“There’s been a huge mind shift from what has been the norm and what people have been optimizing for in the past several decades,” Hiser says. “Companies are figuring out the switch from shipping en masse on pallets for stores to shipping a single item anywhere in the world.”

Ecommerce makes up a relatively small share of overall consumer packaged goods sales; an August study by Nielsen and Rakuten Intelligence showed that ecommerce represents less than 5% of the CPG market for the previous 12 months. But it also accounts for an outsized share, 40%, of the sales growth in the sector, according to the survey.

Beyond sales, there are a host of other pressures causing CPG manufacturers to rethink packaging apart from reduced costs. The strains of storing packaged goods in warehouses, packing them with a nearly infinite array of other objects and shipping them through carriers like UPS puts tension on the containers that they likely weren’t designed for.

Many of today’s packaged goods sit in distribution centers rather than store shelves. They’re clamped, rotated and dropped unlike goods in stores. Even products that survive a fall or a rough clamp may still have structural flaws that cause a leak en route to the customer, leading to a bad initial exposure to a product—or worse, they fail in the consumer’s home leading to a bad experience with the brand.

That’s why Procter & Gamble Co. redesigned its Tide laundry detergent packaging for ecommerce sellers. The liquid detergent is found on store shelves in a round-topped container with a handle molded into the plastic for easy carrying. The spout is lightly protected by a cup that doubles as a measuring device.

The new Eco-Box package, announced in November, replaces the plastic bottle with a cardboard box. Inside is a flexible plastic bladder that holds the liquid detergent, and the box has built-in struts that lift it off surfaces for easy dispensing from a spout that consumers fold out from the box after it arrives. The whole package is shipped in a thin film envelope, which replaces a box filled with padding that would be needed to ship the traditional container via ecommerce.

Tide even reformulated its product for ecommerce, shipping a more concentrated formula that has 30% less water to reduce weight.

“For the first time, we have designed a package ‘e-comm-back,’ beginning with the unique challenges and opportunities the ecommerce environment presents,” and working backwards, says Sundar Raman, vice president of the company’s North American fabric care business. “This is a fundamentally different approach than we’ve taken in the past.”

CPGs are also under pressure from online retailers to provide better packaging for ecommerce. Starting in August, Amazon will require that select products—especially CPGs—come in frustration-free packaging that doesn’t require any shipping preparation or other packaging.

Amazon is offering manufacturers an early adopter credit of $1 per unit Amazon receives of the frustration-free packaging before the Aug. 1 deadline. After that, each unit that doesn’t meet the frustration-free packaging requirement will incur a $1.99 fee.

Amazon’s move is focused on offering more ships-in-own-container items, or SIOCs. These items arrive to retailers like Amazon in a package that the retailer can ship out directly, just placing a shipping label on it before it heads out the door.

Growing online sales have spurred consumer and business products manufacturer 3M to change its packaging for both stores and how it ships its products to ecommerce retailers like Amazon, says Rob Dumas, the company’s packaging solutions supervisor. 3M sells products such as Command Strips, which are wall mounting sticky strips used for hanging lightweight items.

For 3M’s Command Strip ecommerce orders, the manufacturer reduced its volume of packaging per strip by 29% by placing them in a polybag envelope instead of in the hard plastic packs that it uses for stores. These envelopes can be shipped directly by the retailer rather than having to be packed in another box. “Amazon does not want to be in the package prep business,” Dumas says.

“The neat thing about SIOC is that you can brand the mailer,” says Jeff Potts, global executive director of marketing for ecommerce fulfillment solutions at Sealed Air.
This allows Sealed Air to package things like cosmetics in a custom-printed bubble mailer, along with inserts or product samples, before they’re sent to a retailer.

Bulky CPGs reap some of the largest benefits from shipping in their own packaging, and packaging companies like Sealed Air have brought products to market specifically for ecommerce shipments. For example, Potts described a dog food manufacturer that was packaging its dry dog food bags as a private label for an online retailer.

Initially, the retailer sold the same soft packaging in stores and online. But as ecommerce took off, the retailer requested the dog food be packed specifically for ecommerce deliveries. Instead of boxes, which could only be stacked five tall before the weight ruined the boxes, the dog food was wrapped in Sealed Air’s “Stealth Wrap” plastic film, allowing for 12-bag-tall stacks.

Sealed Air didn’t just test to make sure its film would stand up to being stacked, it also had to meet the standards from ISTA and the manufacturer. That includes making sure it can handle being transferred around warehouses and transported to consumers’ homes without turning the kibble into dust.

The film, which launched in 2017, is roughly the same price as corrugated boxes, Potts says. However, the automated wrapping process means that 12 units could be packed per minute versus two for a traditional box, Potts said. The result: the distribution center handles six times more shipments in the same amount of time without added employees. And the thin material is a tenth the weight of a box, helping to save on shipping costs. The wrapping process also compresses the bag, further reducing the dimensional weight shipping costs that are calculated on both the weight and amount of space a shipment takes up. Together, Sealed Air says, Stealth Wrap reduces billable weight costs by 18%.

Potts says that the Amazon frustration-free requirement, the move toward more dimensional weight shipping and rising trust in buying CPGs online has caused manufacturers to feel a pain that they haven’t felt before. “They don’t really move until there’s pain,” he says.

Despite the potential benefits, switching whole production lines from traditional packaging to an online-friendly package may not be wise. Just as concentrates may not have sold well on store shelves, a boxy Tide container may look bland next to competitors when consumers are shopping in stores, Hiser says. He also says that retail packaging can be plenty sturdy for physical store sales and it’s often cheaper to produce.

Hiser wouldn’t give an estimate for the investment it would take to retool a product’s packaging for ecommerce because various products require vastly different considerations. But he did note that the cost considerations should include a budget for testing, reorganizing distribution facilities and training employees on how to handle ecommerce packages differently than traditional retail.

Splitting the line for various sales channels also comes with risks, Hiser says. With Amazon’s Standard Information Number (ASIN) system that creates a single product page for similar items in a variety of packaging from various retailers, consumers may still get retail-bound products through an online purchase.

If a reseller can get his hands on some retail hand soap, for example, he could sell it on the same product page as the manufacturer who has special ecommerce packaging, Hiser warns. If a consumer gets that package and one of the bottles has broken open, that customer’s review would negatively impact the manufacturer’s product listing that shares the ASIN. For products that are expected to sell well online, switching the entire product line over to an ecommerce package may be a better investment, Hiser says.

Of course, as omnichannel efforts like ship-from-store and curbside pickup proliferate, predicting how a consumer purchases an item can get complicated. Retailers like Walmart Inc. and Target Corp. are using in-store stock to fulfill online orders, and while those orders are being processed more directly than traditional ecommerce, CPG manufacturers should still consider how they will arrive to the consumer. With Amazon’s Whole Foods acquisition leading to an explosion in the number of Prime Now-eligible products available, quick deliveries from in-store stock will likely continue to rise. And that means CPG manufacturers may have to keep rethinking their packaging.