The Bioterrorism Act influences processors' priorities as tracking and tracing requirements and product safety top the concerns ofFE's annual packaging survey.

While the slowly improving economy is bolstering budgets for new packaging equipment and material spending, product safety, in terms of tamper evidence and traceability as well as increasing automation levels, continue to be top concerns of respondents toFood Engineering's 19th Annual Packaging Trends Survey.

In examining the impact the economy has had on packaging equipment and material upgrade plans this year, 21 percent of respondents say they have increased capital expenditure projects, while last year only 6 percent of respondents said they saw an increase in spending. The percentage of respondents who reduced capital expenditure projects this year is 29 percent, down from 39 percent last year.

There is also more room in food and beverage company budgets for new packaging equipment compared to the past few years. Forty-three percent of survey respondents say, compared to 2003, their budgets for packaging equipment have increased, up from 35 percent last year. Forty-one percent say their budgets have remained the same, while 16 percent report a decrease.

While food processors may be opening their purse strings, they are doing so with apprehension as the threat of another terrorist attack on US soil and consequential market instability is an ever-present danger. Perhaps this is one reason why 51 percent of respondents say their company plans to spend less than $100,000 on packaging equipment this year. However, 16 percent are ready to spend a $1 million or more on packaging machinery this year.

The outlook is bright on the materials side, with more spending allotted this year versus the past, as 55 percent of respondents say that their 2004 packaging materials budget has increased as compared to 2003; 37 percent say it remained the same; and 8 percent say that it has decreased. And, 41 percent of survey respondents say they plan on spending $1 to $5 million or more for packaging materials in 2004.

The Packaging Machinery Manufacturers Institute's (PMMI) Annual Purchasing Plans Study finds similar reasons to be optimistic in terms of spending on packaging machinery. The study notes that consumer and industrial goods companies plan to increase packaging machinery expenditures 4 percent over the previous year to nearly $5.5 billion in 2004. The food products segment, which accounts for 40.8 percent of the total expenditures for packaging machinery, is estimated to spend $2.233 million on equipment, while the beverage category is estimated to spend $990 million.

"The predicted 2004 growth, which follows two successive year gains after the downturn in 2001, offers confirmation that the recovery now in progress is indeed genuine," notes the PMMI report. The PMMI study cites improved capacity utilization rates, boosted capital spending for industrial equipment, relatively low interest rates, higher corporate profits, and the need to replace older packaging machines to expand automation as the leading drivers to increased US demand for packaging machinery.

Protecting product safety

When respondents to FE's survey were asked to rate important factors when purchasing packaging machinery, for the first time, "compliance with government regulations" tied with accuracy as the number one factor. Safety and accuracy were listed as the top factors in 2003 and 2002, respectively. In a testament to the fact that packaging line performance is paramount, packaging machinery cost was listed sixth among the 18 factors, behind safety, easy changeover, supplier technical support, and ease of use.

Readers may have listed government regulations as the top priority because of pressure to comply with the Bioterrorism Act of 2002, which states that food manufacturers, processors, and packers are required to keep records identifying the immediate source from which they received the food, as well as the immediate subsequent receiver of the food.

The effects of the Bioterrorism Act are also evident among the top packaging issues FE readers rated as having the most impact on their business operations in the next two years. Product safety tops the list, with materials cost, faster packaging line speeds, improved automation and consumer convenience rounding out the top five. But a new entry into the top ten issues-tracking and tracing requirements-was listed as the number six issue respondents felt will be of importance in the next two years. In fact, one reader cites "issues with materials tracking and verification systems" as an area where his company's packaging effort falls short.

In what may be a surprise considering all the publicity radio frequency identification (RFID) received recently, RFID technologies ranked 18th in terms of packaging issue importance. Although major US retailers such as Wal-Mart and Target, as well as the Department of Defense, are requiring that their top suppliers implement RFID technology by early 2005, many end users are adopting a cautious approach. As a result, demand for RFID-related equipment is not expected to surge until late this year.

Results from PMMI's Purchasing Plans study also reveal that RFID is not, as of yet, a major influence in decisions regarding packaging machinery acquisitions. "While the ultimate potential for RFID is admittedly enormous, the slow development of definitive standards for the technology relating to packaging applications has caused many end users to adopt a wait-and-see posture until a clearer picture emerges, and possibly hope that the implementation deadlines set by the retailers will be delayed," notes the report. On the packaging supply side, 32 percent of respondents surveyed at the Packaging Strategies Conference earlier this year by Packaging Strategies and Cap Gemini Ernst & Young said that RFID "isn't here yet, but we are getting a program and action plan together this year."

Improving the end-of-line

In a question new to FE's Packaging Trends Survey, respondents were asked to describe improvement efforts in end-of-the-line package handling systems such as case packing and pallet wrapping and handling. A third of respondents said major initiatives are in the planning stage, while 27 percent said major projects have been executed in the last two years and 25 percent said minor automation efficiencies have been introduced.

When readers were asked to list their priorities in the package handling area, many listed increased automation as a top concern and a way to streamline end-of-line operations. "Increasing speeds of machines and efficiency, more automation, remove manual feeding and handling," said one respondent. Another respondent also identifies "automation of individual piece handling and line integration" as high priorities.

The increasing influence major retailers are exerting on packagers in terms of customization and display-ready packaging was also reflected in many of the respondents' responses. One respondent identified the top challenges as "customizing for different retailers and club stores, display pallets, and the opportunity to have equipment to do repacking or variety packing more easily."

New package development

As revealed in both 2003 and 2004 packaging survey results, when developing new packages, it is not flashy graphics or innovative bottle or container designs, but functionality that comes out on top. "Product protection and preservation" was listed as "very important" by 61 percent of respondents. Cost was a close second, as 59 percent of respondents indicated it is a very important factor. Consumer convenience, often cited as the driver of new product and package development, was third.

More aesthetic aspects of the package, such as printing and graphics quality, product differentiation, and brand image were all ranked as somewhat important, while environmental considerations are low on the radar for most respondents. Only 20 percent ranked source reduction as a very important factor that they consider when developing new packages.

As far as the implementation of new packaging materials or technologies within the past year, packaging line automation again tops the list. Robotics-driven applications and zipper packaging were also listed by a number of respondents. "Films with micro-barriers in them to prevent micro organisms, extend shelf life and consistency," voiced one respondent. Graphic Packaging's new refrigerator-friendly Fridge Pack, now used by both Coca-Cola and Miller Brewing, was also listed by a number of readers as a new packaging technique that stood out this past year.

Room for improvement

Decreasing labor-intensive processes and improving and increasing automation along the entire packaging line were listed time and again as areas where respondents felt their company's packaging efforts fall short. One respondent said his firm "would like to add more automation for a decreased labor presence so as to lengthen packaging events." Another respondent says "some places are still manually intensive, [with] too much direct labor."

One respondent summed up the whole host of challenges many food processors are faced with regarding their packaging lines: "Our product is not getting handled gently enough in packaging, [it's] too hard for employees to operate, [we] want to be safer, get more efficient and reduce labor, minimize cost; we are weak in product accountability [and want to] track our product better."

About this survey

The purpose ofFood Engineering's Packaging Trends Survey is to evaluate the attitudes and opinions of industry professionals toward current and future food packaging trends. This year 1,000 questionnaires were mailed to readers with packaging-related responsibilities. In addition FE attempted to contact another 2,304 readers via phone. There was a 9 percent response rate from the mailed surveys, while there was a 56 percent response rate from the phone survey once readers were contacted and screened. The majority of respondents hold positions in operations/production management, general administration/management, and engineering. A breakdown of the response groups included 29 percent dairy; 28 percent meat/poultry/seafood; 21 percent bakery; 21 percent grain-based products; and 19 percent beverages.