To obtain a broad sense of packaging strategies for the year, a new question was added to this year's survey, asking food and beverage companies which statements reflect their planned packaging equipment and material activities for this year. In an indication of a healthier economic climate, 42 percent of those polled said they plan to increase capital expenditure projects this year, compared to 21 percent last year. Thirty-seven percent said they plan to implement new lines, 32 percent indicated they would reduce capital expenditure projects, and 18 percent said they plan to outsource projects to co-packers.
The report estimates the US contract packaging marketplace at between $17.5 and $21.5 billion, with 15 to 20 percent annual growth. Market research firm Frost & Sullivan reports contract packagers currently hold a 12 percent market share in the North American packaging market.
This need to satisfy requests for more tailored packaging has resulted in increased packaging equipment spending, as the number of FE respondents indicating they plan to spend $1 million or more on packaging equipment, doubled from last year (31 percent of respondents compared to 16 percent of respondents who said they planned on spending the same amount last year). The same positive trend is seen in packaging materials spending, as 33 percent of respondents said they plan on spending $5 million or more on packaging materials in 2005, compared to only 22 percent last year who said they would spend the same.
These findings echo the numbers in this year's Packaging Machinery Manufacturers Institute (PMMI) US Purchasing Plans Study, which predicts a seven percent growth in packaging machinery sales in the US to reach an estimated $5.91 billion. This predicted increase follows three consecutive years of growth after the economic downturn seen in 2001. According to PMMI's report, end-users' decisions to raise capital expenditure budgets in 2005 are being influenced by improved capacity utilization, increased consumer sales, higher corporate profits and favorable gross domestic product (GDP) numbers. Among the key trends PMMI's survey cites as drivers of increased packaging machinery sales are: the need to expand capacity of existing products, more product and stock keeping unit (SKU) additions, the need for more automated packaging machines to reduce labor costs and the continuing influence of super stores and major retail chains on packaging requirements.
A whopping 90 percent of respondents ranked food safety as a "very important" factor in new package development, while 78 percent ranked product protection and preservation as a very important factor. Cost was the third-ranked characteristic considered in new package development.
Why is food and package safety such a high priority at the moment? "The food industry faces many more challenges today in terms of safety in food packaging than it has in previous years," comments Jeff DeLiberty, marketing manager for Silgan Containers. "Consumers are much more aware of potential risks to the food supply, not only from issues like Mad Cow disease or improperly cleaned produce, but also from tampering. This heightened awareness will continue to play a significant role in consumers' everyday shopping habits."
The Can Manufacturers Institute, which promotes the use of metal containers, a packaging method that boasts 100 percent protection from contaminants outside the container, commissioned a recent opinion research telephone survey of 1,000 Americans to determine their perceptions of food safety. The survey revealed that the potential presence of bacteria in food concerns 83 percent of Americans, while potential food product tampering worries 78 percent. The survey also found that more than three-fourths of Americans pay close attention to how a food's packaging protects them and their family from the consequences of spoilage, bacteria and/or tampering.
To thwart product tampering, potential bioterrorism threats or extortion attempts against food manufacturers, food packaging may need to move beyond traditional methods of protection such as tamper-evident bands, foil seals and tamper-evident closures. The use of color-changing dyes that indicate product tampering or damage is now being developed by Australia's Commonwealth Scientific and Industrial Research Organization (CSIRO). Dr. Andrew Scully, a scientist at Food Science Australia, recently remarked at a food industry conference that the intelligent packaging method, still in its early stages, is "based on irreversible color-changing dyes so once the package is damaged or punctured in some fashion ... it would trigger a change of color that would indicate the quality of the product has been compromised in some fashion."
CSIRO is currently studying how to use color, either as an explosion of ink on the product's wrapper or the dye's reaction to the sudden influx of moisture from the outside, to signal tampering.
Among the verbatim responses, FE readers cited cost, software issues and updating computer systems to accommodate RFID technologies as obstacles. A number of respondents said their company was in the midst of testing and evaluating the technology. One respondent said they are "looking for improved RFID longevity," while another said his company will apply RFID technologies "when Wal-Mart decides we have to do this."
Another respondent said the "variety of products plus the need for a variety [of] types of packs" is an area of improvement needed along the packaging line, while another said his company "ships on a customer-by-customer customized basis, [so the] inventory of packing material and cost [are] always important."
Among the new packaging materials or technologies that have been implemented within the past year, automation along the packaging line was again mentioned in many responses. Modified atmosphere packaging, retort plastic containers and "sleeker packaging and closeability" were listed, among other packaging techniques implemented at food manufacturers' sites.