Economic constraints are impacting all operations areas, but packaging professionals aren’t suspending efforts to improve sustainability and flexibility.
Money is on Americans’ minds, and financial uncertainty is affecting packaging priorities and plans in North American food and beverage plants, as this year’s Food Packaging Trends Study indicates.
Belt tightening characterizes today’s packaging department, with 45 percent of survey respondents saying fewer capital expenditure projects will be undertaken this year at their plants. One in four plan to install new lines this year, down sharply from the go-go days of 2007, when almost twice as many Food Engineering
readers polled were putting in new lines.
On the other hand, a poor economy poses an opportunity for innovative companies to differentiate themselves while the rest of the market is holding back. That’s precisely what 28 percent of respondents are doing by introducing new package designs and installing new equipment in a bid to increase market share. “We have an entirely new technology for packaging that will revolutionize the industry,” one respondent writes. “Fun, safe, portion controlled, clean, convenient, easy to use and patented: This is the platform technology that will change the face of food for the 21st century.”
These are bold words, but this professional’s firm is not alone in plunging into change instead of pulling back. More attractive and modern graphics, new high-speed equipment and package formats that are either more convenient for users or cut in-house handling costs are among the changes readers cite.
Skeptics predicted sustainability initiatives would be blunted by the economic downturn, but survey results suggest otherwise. Some softening in momentum occurred, but concerns about package recycling, material recovery, source reduction and other sustainability issues remain strong. Readers rate sustainability as the ninth most important issue affecting their packaging operations in the next two years, with almost half saying it is extremely or very important. That’s the same as last year’s sustainability ranking. Material costs and product safety continue to rank as the top two issues in packaging, and satisfying tracking and tracing requirements is rising in importance. Tracking and tracing is deemed to be the fourth most impactful issue. Three years ago, it ranked ninth.
Economic and social goals are intertwined in sustainability initiatives, a fact reflected in one food professional’s description of his firm’s packaging changes. The company “introduced new packaging for light-weighting bottles, taking advantage of reduced cost and [delivering an] improved sustainability message,” he writes.
Seven in 10 respondents cite reductions in energy use and waste streams as sustainability actions their companies have taken. Firms also are taking aim at the supply chain, with 58 percent indicating their organizations have reduced transportation costs. One in five say they now are reusing secondary packaging. Twice as many-42 percent-say they have increased the use of recycled content in their packaging.
Less material, more protection
Half of the organizations surveyed are reducing material use in both primary and secondary packaging, but there’s room for more improvement. “Still too much packaging,” one respondent grouses, commenting on where his firm’s efforts fall short.
Dividers and inserts in shipping materials are a fat target at many companies. Corrugated materials in particular are under review, with several readers indicating a move to either lightweight corrugate or its complete elimination. Comprehensive efforts to reduce material or supply-chain costs are not uncommon, with one respondent noting changes to “increase recycling content in primary package, change package geometry for optimum warehousing and shipping cost, [and] decrease strength of secondary shipping cases.”
“Primary and secondary packaging redesign is an ongoing project,” another writes. “Thickness reduction of secondary overwrap, redesign of shipper flaps to improve closing efficiency and palletizing speeds” are examples of recent changes. “Customer requirements (read: Wal-Mart) lead to continuous improvement in nonstandard shipper/display cases.”
Reducing product damage during shipping is by far the leading supply-chain objective, with three in five respondents saying their companies made changes in the last year to accomplish that. Better protection can be delivered with design changes that require less material, readers make clear. One notes his firm “reduced packaging material needed to do the job of protecting the product.”
Reusable containers, full-truckload orders and elimination of excessive or unnecessary packaging film and cases are frequently noted efficiencies. Consolidation of suppliers is another popular tactic for driving cost out of the supply chain.
Product diversity often means putting the same products into either smaller or larger containers. Consequently, a larger premium is being placed on ease of changeovers and increased machine flexibility. Readers rate increased flexibility/changeover as the third most important issue affecting their operations in the next two years, up from the sixth most important in 2008. Modifications to existing equipment sometimes can increase flexibility, and over half (53 percent) indicate they used that tactic to reduce roll-out time for new products. But people are more flexible than machines, and 21 percent say they have introduced manual functions and operations to speed time-to-market. Another 15 percent added modular or flexible lines to achieve this goal.
Increased flexibility is the argument for robotics. Two-thirds of respondents report robotic systems are being used in their finished goods areas. Palletizing is the most common application, with two in five facilities deploying robotics for that function, followed by carton forming and case packing, both at 25 percent penetration. Robotic depalletizing is done at one in 10 plants, with pick and place and a smattering of other functions cited.
Performance and maintenance ratings for packaging robotics are virtually identical to those last year, but dependability/reliability scores show improvement.
When evaluating new machinery, whether robotic or mechanical, packaging professionals consistently rate food safety and machine safety as the most important features. Allergen and contamination issues, on the other hand, plummeted in importance to 13th out of 20 factors, down from fourth most important two years ago. Training, on the other hand, climbed seven spots in the rankings to the 11th most important consideration.
But the factor that grew the greatest in importance is, not surprisingly, machine cost. It ranks behind only food and machine safety.
Who answered the survey?
Two-thirds of survey responses came from three job-function areas within Food Engineering’s readership: operations and production management (26 percent), general administration and management (22 percent) and engineering (19 percent). A quarter was drawn from the areas of quality assurance (13 percent) and research and development (11 percent). The remaining 11 percent were scattered between packaging, purchasing, technical support and other areas.
Small and midsized plants were most heavily represented: 24 percent indicated 100-249 workers are at their location, while 33 percent reported fewer than 50 employees. Almost one in five responses came from professionals at large plants, with 8 percent indicating 500-999 employees and 10 percent with 1,000 or more. The remainder was almost equally divided between plants with 250-499 workers (14 percent) and those with 50-99 employees (13 percent).
Three of 10 respondents (29 percent) work at firms that will spend less than $250,000 on packaging materials this year. At the other extreme, one in five (18 percent) will spend $5 million or more. The remainder are almost equally distributed in the ranges of $250,000-$499,999 (12 percent), $500,000-$999,999 (14 percent), $1 million-$1,999,999 (13 percent) and $2 million-$4,999,999 (14 percent).
This article is a snapshot of an annual study examining trends in materials, equipment and container usage, capital spending and other issues affecting business operations in the packaging industry.
The conclusions are based on the opinions and behaviors of industry insiders who agreed to participate in the survey. This survey was conducted and findings were compiled by Clear Seas Research.
A total of 199 individuals actively involved in recommending or authorizing packaging machinery or materials purchases for their company participated in the study, which was conducted in April of 2009.
This in-depth research study provides up-to-date information on current packaging activities and expenditures, along with information on the key factors impacting/driving current packaging operations and purchases.
The comprehensive report is available from Clear Seas Research. For information about ordering the report or to find out more about Clear Seas Research services, contact Sarah Corp at firstname.lastname@example.org.