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Paper and board play key roles in the future of packaging
CPG, Innovation, Trends

Paper and board play key roles in the future of packaging

Overall growth in dollar value terms for packaging was depressed for the years spanning the middle of the decade – although this is largely attributable to relative strength of the dollar against other currencies across that period. Still in 2017, value reached US$851.1 billion, a 2.8 per cent growth compared to 2016 at constant prices. This steady expansion is anticipated to continue across the next five years, rising slightly to 2.9 per cent year-on-year across this period, to reach $980.4 billion in 2017.
Regional perspectives The continuing trend towards large-scale mergers and acquisitions – for example the creation of WestRock from MeadWestVaco and RockTenn – is testament to the relative maturity of the packaging industry in developed world regions, like North America and Western Europe. The analysis in the new Smithers Pira report, The Future of Global Packaging to 2022, indicates that emerging and developing economies will contribute just over 70 per cent of world packaging consumption growth from 2017 to 2022. Asia is the largest market accounting for 42.1 per cent of world packaging consumption in 2016. North America is in second place accounting for 24.3 per cent of world packaging consumption, ahead of Western Europe with 18.4 per cent. The emerging and developing regions of Eastern Europe, South and Central America, the Middle East and Africa account for the remaining 15.2 per cent of world packaging consumption. Asia is forecast to grow packaging consumption at the fastest rate, led by China and India. This is largely attributable to growing populations, rising disposable incomes, and a transition from traditional markets to the purchasing of packaged consumerist goods, especially in the food segment. China alone is forecast to represent almost 48 per cent of world packaging consumption growth through to 2022 with India accounting for a further 8.5 per cent. Material segments Board and paperboard (corrugated, folding carton stock and liquid paperboard) is the largest packaging material type covered in the Smithers study. It accounted for 35.7 per cent of world packaging consumption in 2016, followed by flexible packaging (plastic, paper and foil) with 23.3 per cent, rigid plastic packaging with 18.2 per cent and metal with 12.2 per cent. Below, pulp and paper is represented in the two largest packaging material segments — board and flexibles — in 2017. GlobalPackChart2.jpg Flexible packaging is forecast to grow consumption at the fastest rate through to 2022, driven by advantages in lightweight, demand for smaller more convenient packaging and improvements in design. Growth will be strongest for flexible plastics which are already two-thirds of the market, but flexible papers will perform only slightly less well across the five year forecast, with aluminium seeing the smallest boost, as pricing and improvements in competing barrier materials squeeze its share. Food markets dominate flexible packaging consumption accounting for three-quarters of global consumption in 2016. Meat, fish and poultry; confectionery; dried food; and savoury snacks are the largest food markets for flexible packaging. Pharmaceuticals, medical, cosmetics and toiletries are the largest non-food markets for flexible packaging. Flexible papers While flexible paper packaging has been under threat from flexible plastics in some applications, it will remain an important constituent of the flexible packaging market for the foreseeable future. This is due to a combination of factors, its low cost, its perceived good environmental credentials, its use in laminations — often as a light barrier — and because consumers enjoy the tactile effect. A number of plastic films have been modified to mimic the feel and look of paper, while offering the benefits of moisture barriers inherent with plastic films. Matte finish BOPP is an example of such a film. Papers continue to dominate some packaging applications, such as flour, sugar and some soft cheeses. Papers are still used widely in medical packaging; fast food wrap and metallized paper cigarette bundle wrap, as well as less formal developing world retail sectors. Dried food, processed meals and savoury snack markets present growth opportunities for extrusion-coated papers, along with specialty medical packaging papers. Corrugated board Growing environmental concern is benefitting the corrugated board market due to the perceived and real environmental benefits of cellulose-based packaging. However, lightweighting of board constructions is hampering volume growth slightly, although the impact on value is less pronounced. Corrugated packaging companies are putting increased emphasis on shelf-ready packaging that significantly reduces the workload for unpacking and displaying products. This trend is now deepening with the rise of discount retailers — such as Aldi and Lidl in Europe — and convenience store selling, which are more likely to use less labour intensive shelving options and have fewer of their own branding priorities. This presents an opportunity for the brand to determine how their product is presented in store and gives an opportunity for them to invest in printed graphics for on-shelf differentiation. HP-Corrugated-Board.jpg Press builders like HP are collaborating with specialists in corrugated board handling to develop a new generation of high productivity inkjet press for printing boxes. Source: HP This trend dovetails neatly with the wider availability of inkjet printers for corrugated board, giving brand greatly expanded options for versioned packaging, including bespoke designs of corrugated formats for short run promotions. Flatbed inkjet systems have been available for corrugated for several years, but productivity and cost have limited these; often to point-of-sale displays, rather than packaging. Across 2017 to 2022, this situation will change as a new generation of high productivity inkjet presses — like the HP T1100S — especially designed for volume corrugated print are already seeing their first commercial installations. E-commerce The unspectacular, if steady, rise in demand for packaging in retail outlets contrasts with that in the e-commerce segment. The value of packaging demand into this sales channel was $28 billion in 2017, and will more than double by 2023. Over 75 per cent of this is for corrugated formats, causing a surge in demand for fanfold for fit to packing applications, new designs for returnability, and lighter weight flutings that minimize the size of postal shipments. From a packaging designer’s perspective with a customer encountering their goods away from a shop, serving staff and, other prompts such as point-of-sale displays; packaging is taking on an increasing important role as the primary touch point for brand identity. This is generating interest in new designs that create an opening or unboxing experience. Pack printing is also a key medium in this new arena with many e-commerce retailers and brands investing in high-quality graphics on the exterior and especially the interior of the package, for decorative impact. This in turn is creating a spur for new linerboards that can carry improved imagery. The position of folding cartons within global packaging will face competition in the future from new more streamlined pack formats – like resealable stand-up pouches – that do not require secondary cartons. Additional competition will also be seen from upright flexible packaging, e.g. shrink film for multi-packs of beverages, and corrugated boxes. Future demand will also be affected by factors such as falling sales of tobacco and cigarettes, and an increase in offshore production of toys and sports products that are shipped pre-packed. Higher paperboard prices, which impact on profitability, may another challenge, but in the short term board prices are generally decreasing as a result of rising European board output and high exports from an oversupplied Chinese board market. Folding cartons demand is predicted to grow in four main end-use segments. More spending is expected on luxury items, while the on-the-go eating trend will drive demand for retail carryout cartons. A larger ageing population and health enfranchisement worldwide will also increase demand for cartons in the pharmaceuticals category. Environmental factors and lightweighting is also expected to underpin faster than average growth in use of beverage cartons. Folding cartons will also benefit from the digital print revolution. New dedicated inkjet platforms are joining toner-based systems in this segment, which has been targeted as the first by Landa Nanography with its B1-format S10 press now in beta testing in Israel. Liquid packaging board Liquid packaging board consumption is likely to be maintained over the next five years. With 70 per cent of this market used in dairy and 20 per cent in fruit juices it will benefit from the healthy eating trend in developed markets, combined with growing consumption patterns in the emerging markets. There is a growing trend for liquid packaging board producers to use renewable resources in order to enhance their environmental credentials. In 2016, for example, Tetra Pak announced the launch of a new version of Tetra Brik Aseptic 1000 Edge with Bio-based LightCap 30. This is the first aseptic carton package in the world to receive the highest class of Vinçotte certification for its use of renewable materials. The new package is manufactured using a bio-based plastic film and cap. Innovations like micro-fibrillated cellulose (MFC), being pioneered by the likes of Stora Enso, offer the prospect of a biodegradable barrier film capable of replacing aluminium foil in liquid cartons. Carton manufacturers are also introducing new and innovative carton products. These include the Combidome carton bottle from SIG Combibloc and Elopak’s Pure-Pak Sense Aseptic carton. The novel design and functional features of Pure-Pak Sense Aseptic cartons include easy-to-fold lines and the convenient flattening of cartons to reduce volume in waste and recycling facilities. Liquid carton producers are also responding to consumer demand for packaging suitable for on-the-go drinking. Tetra Pak launched two portion-size packages in April 2017 to meet growing demand for on-the-go beverages. The Tetra Prisma Aseptic 200 and 250 Edge with Dreamcap 26 build on the success of the Tetra Prisma Aseptic 300 ml, which has more than 100 customers and packages more than 340 brands. Tetra Pak forecasts that worldwide demand for portion packages under 250 ml will grow to 72 billion litres by 2019, up 10 per cent from 2016.
WRQ : Market pulp manufacturers saw improved profitability in latter half of 2017

WRQ : Market pulp manufacturers saw improved profitability in latter half of 2017

Pulp manufacturers in many countries have seen their wood fibre costs go up during 2017, with the biggest increases in U.S. dollar terms occurring in Western North America, Europe, Russia and Australia, according to the Wood Resource Quarterly (WRQ). The Global Softwood Fiber Price Index (SFPI) increased for the third consecutive quarter to reach $89.08/odmt in the 4Q/17, 4.0 per cent higher than in the same quarter in 2016.
Hardwood fibre prices have also trended upwards over the past year, with the Global Hardwood Fiber Price Index (HFPI) reaching its highest level in almost three years during the 4Q/17. In U.S. dollar terms, hardwood fibre prices have gone up the most in Europe, Russia and Indonesia during 2017. The only region that has experienced a decline in wood fibre costs has been the U.S. South, where hardwood pulplog prices were 2.3 per cent lower in the 4Q/17 than in the 4Q/16.Wood fibre costs remain the single largest cost component in the manufacture of wood pulp, ranging between 40 to 60 per cent of the total cash costs, depending on region and pulp grade. The wood fibre costs as a percentage of the price of Northern Bleached Softwood Kraft market pulp (NBSK) have been on a downward trajectory over the past eight years. The substantial increases in market pulp prices during the 4Q/17 and only small upward price adjustments of pulpwood resulted in the wood fibre cost percentage reaching a record low of 23.2 per cent in the last quarter of 2017 (down from 36 per cent in 2012). Since wood fibre costs account for a majority of the pulp manufacturing costs, the low wood cost share has improved profitability for market pulp manufacturers throughout the world during 2017.
Six indicators of effectively leveraged packaging
Corrugated, Sustainability, Trends

Six indicators of effectively leveraged packaging

What renders a tool effective is the skill with which it’s utilized. Packaging has great potential. However, potential always is a quality that either gets unlocked or remains unfulfilled.
It’s a given that some corporations are more effective at leveraging packaging, but what do they share in common? While not offered as a collectively exhaustive list, the following indicators address that question. 1. Packaging is acknowledged by top management. It’s good to have friends in high places. When a CEO recognizes packaging as a strategic tool and a source of competitive advantage, it bestows a level of prestige difficult to obtain through any other means. Such recognition needs to be conveyed company-wide, luckily not a daunting task, given the various internal channels commonly utilized for top-down communications. The recognition, however, also should include external stakeholders, most importantly the customer base. For example, the extent that packaging is mentioned at stockholders’ meetings, in annual reports, and on the company’s website suggest recognition by top management. Recognition that is not supported by action is lip-service. Recognition, therefore, is necessary for the effective leveraging of packaging but is not sufficient. It makes sense, nonetheless, to discuss recognition first, for without it, the other indicators have no prospect of being implemented. 2. The company has a practical philosophy concerning packaging. Not to be confused with the related concept of culture, a company’s philosophy is the prism through which it interprets reality and its place therein, applying knowledge, beliefs, opinions, assumptions, instincts, and logic. A philosophy about packaging should: 1) define the discipline; 2) define its functions; 3) define its importance; and, 4) define how it is to be used. Definitions 1 and 2 should be regarded as universal, but definitions 3 and 4 should be regarded as company-specific. The subsequent paragraphs provide further details. Packaging, far more than just a container, is a system that necessitates trade-offs among competing (often conflicting) requirements imposed throughout the company’s supply chain. An aware company is less likely to make decisions that produce suboptimal net effects to that system. Packaging performs the functions of protection, communication, and convenience/utility. An aware company is less likely to assign a role to packaging that’s outside those capabilities. Packaging’s importance differs in accordance with a given company’s industry and products. A comparison between consumer packaged goods and industrial non-durables illustrates that point, in that the former places greater reliance on communication and convenience/utility while the latter places greater reliance on protection. An aware company is more likely to understand that all the functions of packaging should be present, although not necessarily in equal measure. As for how packaging is to be used, words to live by are honesty and forthrightness. Packaging, true of any tool, can be misused. After all, there is a term called deceptive packaging, and there’s never an absence of parties quick to apply it to any company deemed to have made itself vulnerable.
3. Packaging is staffed and managed by professionals. In every user-industry, there are alumnae of the various packaging curriculums, not that that’s the lone calling card to be considered, but being degreed should be a requirement. As shown by employment ads, for example, companies vary regarding what constitutes “a plus” (i.e. minimum years of experience, the industry in which that experience was acquired, and familiarity with certain intellectual technology). The preceding requirements are easily evaluated, in that, either the candidate possesses them or not. Less easily evaluated, but just as worthy of being requirements, are certain intangibles, such as creativity, inventiveness, and self-initiative. That said, it’s the rare job interview that’s designed to ferret out those qualities. Packaging departments range in size from an individual to dozens. The Goldilocks (not too little, not too big) size is the one required to effectively and efficiently maximize packaging’s contribution to the company’s competitive strategy. 4. Packaging is properly positioned on the organization chart. Packaging, as alluded, constantly has to interface with other disciplines, such as product development, procurement, legal, marketing, production, and logistics, just to mention the major ones. Packaging’s interdisciplinary nature should be a factor in assigning its position on the organization chart. Nonetheless, packaging should be afforded the needed amount of autonomy. That autonomy is more likely when packaging is positioned horizontal relative to the disciplines it serves. It would be questionable to vertically place packaging as answerable to a particular discipline. If, for example, packaging is a department under marketing, the latter might exercise disproportional sway about packaging-related decisions. An analogous example can be made regarding any of the other above-cited disciplines. In all such examples, it’s unlikely that packaging-related decisions will be made in the truest tradition of the systems approach. 5. Packaging is adequately resourced and budgeted. Packaging should be allocated assets commensurate with the expectations placed upon it. Salaries need to be competitive to attract and retain top talent. Are laboratory and testing equipment prudent investments? What about in-house design capabilities? The more a company is reliant on proprietary features and intellectual properties (i.e. patents and trade-dress), the more the answer 'yes' is justified. A company that appreciates the value (make that necessity) of staying in front of trends and drivers should include in the budget attendance at relevant conferences, seminars, exhibitions, and the like. 6. Packaging has citable accomplishments. The bottom-line indicator always is results, that is to say, quantified returns. There’s nothing wrong with packaging tooting its own horn, making it known throughout the company what’s been achieved─better yet, overachieved. In wrap-up, a company should not regard the six indicators as boxes to be checked; rather, they should be regarded as dynamic, not static. Complacency should never settle in; there’s always room for improvement─for example, practicing benchmarking and identifying best practices. Such a mindset, could qualify as a seventh indicator. Source : www.packworld.com
China’s paper product makers raise prices on higher raw material costs
Corrugated, Trends

China’s paper product makers raise prices on higher raw material costs

The increase will hit products ranging from packaging boxes to toilet paper.  

China is likely to see price rises for paper products this year on a shortage of raw materials and imported waste paper, according to Hong Kong-listed Nine Dragons, one of Asia’s largest packaging and paper producers.

Cheung Yan, the company’s chairwoman and one of China’s richest women, said at a press conference in Hong Kong on Tuesday that the company was likely to raise product prices in 2018, pressured by increased costs in raw materials, whose supply has been hit by Beijing’s tighter controls on imported waste paper, an important source for manufacturing paper products.

“The government’s tightened control on imported recovered paper has resulted in significant volatility in both imported and domestic recovered paper prices,” said Guangdong-based Nine Dragons in an interim results filing to the Hong Kong stock exchange.

In the six months ended December 31, the company saw its net profit more than doubled to 4.33 billion yuan (US$690 million), up from the previous 1.91 billion yuan.

Separately, Vinda International Holdings, China’s third-largest tissue manufacturer, said last month that it had raised tissue product prices by 4 to 5 per cent since last October in response to rising pulp prices.

US pulp prices have risen more than 35 per cent in the past year, contributing to the hike in toilet-paper costs among other factors, according to Bloomberg.

The toilet paper price hike has sparked panic buying in Taiwan over the weekend after suppliers told local supermarkets they would raise prices by 10 to 30 per cent from next month.

Raw materials accounted for around 48 per cent of the costs for toilet paper products, and almost all of the pulp was imported from abroad, said Taiwan’s Ministry of Economic Affairs.

Vinda has operations in Taiwan, but it is not immediately known the level of price increase they will put in place for their products on the island.

Source : www.scmp.com
USA box demand ‘back in growth mode again’ with a major boost from e-commerce
Corrugated, CPG

USA box demand ‘back in growth mode again’ with a major boost from e-commerce

After remaining relatively flat for the past 15 years, the US corrugated box industry is "in a growth mode again," former International Paper (IP) Sr VP Bill Hoel told the recent Fibre Box Association (FBA) annual meeting in San Francisco. One reason for this growth is e-commerce, which presents both a "tremendous opportunity" and also a major challenge for the industry, according to a panel discussion. Hoel, who recently retired as head of the IP Americas container operations, noted that the industry has remained "very vibrant" over the past 15 years, despite many competitive pressures, including two recessions, shifts in manufacturing offshore, changes in consumer behavior, competition from plastics, and a consolidating customer base. "The industry has remained flat with all these competitive pressures, he noted. "Some would be half the size." US box shipments in 2016 of 376 billion ft2were about the same level 15 years ago at 380 billion ft2in 2002 (and down from an all-time peak of 405 billion ft2in 1999 just before the previous recession). But in the past year, box shipment growth picked up, rising 2.1% in 2016, compared with 1.2% growth in 2015 and 2014, and no growth in 2013, according to FBA statistics. Shipments this year through April were up 2.3% from a year ago, blending actual and average-week statistics. Growing productivity.Over the last 15 years, "there have been huge advances in the scale and productivity of our box plants," Hoel noted, suggesting one of the strengths of the US corrugated industry. This has led to "concentration" in the industry, with the number of companies with corrugators declining from 129 in 2000 to 90 in 2016. At the same time, average volume per company increased from 3.1 billion ft2in 2000 to 4.2 billion ft2in 2016. Average corrugator plant production increased from about 660 million ft2in 1995 to over 1 billion ft2in 2016 – about 50% growth in scale. Corrugator widths have increased from 87 in. in the late 1990s to 98 in. in the first half of the 2000 decade, to 110 in. in the second half, with some 130-in. corrugators now being installed. "Kicks per minute" (number of boxes) for flexo-folder-gluers have increased from about 250 in the late 1990s to about 400 today. Changing end-use customer mix.Hoel indicated that there have been significant shifts in the end-use sectors for US corrugated box shipments. Despite recent sluggish growth, processed foods in 2015 accounted for 27% of the industry's box mix, up from 22% in 1995. Fresh foods held steady at 16% in 2015. The biggest decline was in durable goods, which was at a 9% share in 2015 that was down from 19% in 1995, reflecting the shift in US manufacturing offshore during this period, Hoel noted. Paper and publishing also showed a big decline as an end-use for boxes, dropping from 23% to 12%. Distribution/e-commerce showed the fastest growth, increasing to 12% of the US box market mix in 2015 from 1% in 1995, with e-commerce playing an increasingly important role in driving box shipments. New trends in consumer behavior.Among factors driving changes in consumer behavior are ordering products from mobile phones, which didn't exist 15 years ago, free and fast shipping from e-retailers like Amazon, interest in healthy and fresh food choices, and growing demands for social responsibility, Hoel noted. These trends will likely continue in the future because of increased buying power of millennials. Customer expectations are evolving in a new environment of "nonstop connectivity," where "convenience is king," and same-day delivery may become normal. Growing impact of e-commerce.In a panel discussion moderated by FBA VP Rachel Kenyon, four speakers described the growing impact of e-commerce on the North American corrugated industry. During the period 2005-2015, e-commerce grew 430% compared with 30% growth in total US retail sales, according to Freedonia Custom Research Sr dir Daniel Meges. Freedonia Custom Research was recently acquired by marketresearch.com. "Nevertheless, e-commerce still only represents about 5.5% of all US retail sales, but is likely to account for more than 10% of all retail sales by 2025," he noted. E-commerce is expected to grow at a 10% annual rate from 2015-2025, up 16%/yr from 2005-2010, according to a recent Freedonia study. This compares with about 3% growth in total retail sales. "Double-digit growth rates for e-commerce look likely to continue for at least the next decade," Meges said. Amazon Prime membership, a major driver for this growth, surged 75%/yr from 2011 to reach about 66 million members in 2016 – about half of US households, even though Amazon Prime only launched in 2006. Amazon's overall sales have grown from $2.8 billion in 2000 to $107 billion in 2015. E-box demand$1 billion by 2020?E-commerce packaging demand is forecast to grow from $2.5 billion in 2015 to $3.7 billion by 2020 and $5.4 billion by 2025. This would be up from only $1.5 billion in 2010, according to a recent Freedonia study. Corrugated boxes will become the largest component of e-commerce packaging demand, rising from $680 million in 2015 to $980 million in 2020 and nearly $1.7 billion in 2025, according to Meges. Boxes will account for 30% of overall e-commerce packaging demand by 2020, with protective packaging, mailers, and other packaging consisting of the balance. Protective packaging totaled an estimated $710 million in 2015 consisting of air pillows ($305 million), bubble packaging ($155 million), paper fill ($70 million), loose fill ($65 million), and other packaging ($115 million). Paper fill was forecast to reach $110 million by 2025. "Nearly two-thirds of boxes are purchased by traditional online retailers (such as Amazon) or 3PLs (third-party logistics suppliers) that are servicing the e-commerce industry," Meges noted. Bricks and mortar retailers will account for about 20% of demand through their online activities, Freedonia estimates. "Three of the top five product categories – computers/electronics, home furnishings, and recreational goods – are all incredibly conducive to corrugated products," according to Meges. Over the 2015-2020 period, packaging demand is set to grow the most rapidly in apparel and food/beverage. Grocery buying 'disrupter.'"E-commerce is a major disrupter to the way Americans buy groceries, as the share of online grocery purchases is growing three times that of traditional grocery channels," he said. Food and beverage e-commerce is expected to grow by more than 10%/yr over the 2015-2020 period, while in-store sales at traditional grocery stores are likely to grow less than 3% annually over the same period. There is a significant growth opportunity because food and beverage only represents 4% of all e-commerce sales and e-commerce only accounts for 5% of total retail sales. In 2016, only about 20% of US shoppers bought groceries via an online channel, he said. Shipping fresh and perishable food is a special challenge, however, because of refrigeration, a couple of panelists noted. "E-commerce's relentless growth presents unique challenges to the corrugated industry," Meges said. "Recycling efforts will be complicated as the traditional grocery store channel is eroded." "Cross-border supply chains will be increasingly common, and packaging will need to accommodate more diverse climate zones. Corrugated may increasingly find itself as the key 'brand ambassador' packaging medium," Meges said. Traditional store bubble bursting.E-commerce has been growing at an "exponential" rate and is expected to grow from around $400 billion today to $600 billion by 2020, according to former Walmart mgr and Vanguard Packaging marketing dir for retail ready packaging Chet Rutledge. Rutledge said that about one-third of online purchases are now made using smart phones, and social media provides consumers with immediate feedback. Meanwhile, the traditional retail store bubble is bursting, with 21 retailers planning to close 3,591 stores in 2017, according to a recentForbesarticle. More product categories are moving on line and there is an increased assortment of products. Walmart.com has 30 million items available online vs 150,000 for a normal company supercenter, Rutledge noted. More complex supply chain.E-commerce (supplier/fulfillment center/sort center/parcel delivery/customer) requires a much more complex supply chain than the traditional retail store channel (supplier/warehouse/store), speakers said. For example, the return rate is 20-30% for e-commerce purchases compared with 8-9% for brick and mortar stores, meaning boxes must meet "reverse logistics" requirements. Rutledge said boxes may have only 4-5 "touch points" in the traditional retail channel, but receive 20 or more in the e-tail channel – or more than four times the amount of handling. He said this places different demands on boxes, with lighter material needed with higher performance since a "damaged product equals a damaged reputation for the retailer." Amazon is using 40-60 different sized boxes for shipping products with the goal of offering customers "frustration-free packaging" that is easy to open and 100% recyclable. Packaging must be "right-sized to reduce dimensional weight or cube size in freight and be sustainable," according to Rutledge. With boxes going directly to consumers' homes, recovery of old corrugated (OCC) will become more of a challenge, he noted. By contrast, retail brick and mortar stores have a 93-95% recovery, with everything going to the store's backroom baler. Developing new standards.The evolving retail supply chain and its effect on package design was the topic of International Safe Transit Association (ISTA) pres A.J. Gruber. "Traditional retail packaging is not sufficient for 'direct' to consumer for a wide range of products," he noted. The increased complexity and number of "handlers" in the e-commerce supply chain increases the potential for product damage, which can impact "brand image with customers," Gruber said. In e-commerce there is "no intermediary to filter transit damage" and the "consumer must deal with 'end of life' for packaging material," Gruber said. He said omni-channel delivery is blurring "transport" packaging and will "alter the design process for boxes." Box requirements like vertical compression strength may be less important for individual packages moving through the e-commerce supply chain to households than for delivering multiple products to a store in a unit load, he noted. ISTA recently published an RFP to develop a test protocol to predict package performance in e-commerce for retailer shipping systems. The group has also developed an "E-Commerce Exploratory Team to establish common practices within the e-commerce supply chain." Major e-retailers such as Amazon and Walmart, major brand owners, and carriers are initial participants. "There is a lot of opportunity for the corrugated industry to create packaging designs around e-commerce fulfillment," Gruber said. Step change in the market.Providing a producer perspective, KapStone's Joe Hodges, who is the company's strategic account mgr for Amazon, noted that he expects e-commerce in the USA to grow at an annual rate of 8% over the next five years and account for 10% of total retail market by 2018. But it's still hard to judge e-commerce growth in demand for boxes as "additive or overlapping current (retail) business," Hodges said. Among ways e-commerce is a "step change" in the packaging market are more single-item shipments vs larger quantities moving through the retail supply chain and more frequent shipments. "Consumers are no longer shopping once a week, but daily, even hourly," Hodges said. For producers, there is more demand for smaller and specialty boxes, and need for an "increased service model," according to Hodges. "Lead times of two weeks are a thing of the past and our industry has to react to a compressed supply chain with 24-48 hour lead times around new consumer behaviors," he said. Significant demand spikes in e-commerce particularly around the holidays are a challenge in forecasting demand, Hodges added. Source : www.technology.risiinfo.com
Four consumer trends to come in 2018
Corrugated, Designers, Innovation

Four consumer trends to come in 2018

Mintel announces the four key trends set to impact North American consumer markets over the coming year. With surprises at every turn and vague uncertainty gripping Americans and Canadians daily, being attuned to consumer trends across transparency, value, self-care and automation is perhaps more crucial in 2018 than ever before. In the coming year, Mintel predicts that:
  • Companies will take a stand, speak out and prove that they're trustworthy as consumers reprioritize who and what they believe in.
  • Greater opportunities will exist for brands to align their efforts with value and to prioritize bargain-hunting consumers as the stigma of shopping with a coupon is long gone.
  • With widespread turmoil and unfavorable news at their fingertips, consumers will focus on self-care as they seek to better themselves in the year ahead.
  • While humans have been using speech and images to communicate for thousands of years, technology will finally catch up through voice- and visual-based devices and software.
Looking ahead to 2018, Mintel consumer trends consultant Stacy Bingle and manager of trends, North America Carli Gernot highlight the major consumer trends predicted to play out in North America in the coming months and years. Trust Funding In a post-truth world, consumers are putting their dollars where their trust remains intact. "We're living in a post-truth and post-trust world. As consumers grapple with news that may or may not be 'fake,' with corporations acting in ways that foster mistrust, and with organizations voicing beliefs and philosophies, more consumers will reprioritize who and what they trust in 2018. In fact, just five percent of Canadians say they trust the news stories they read on social media sites, according to Mintel research. Today, trust has become one of the strongest drivers in how consumers choose products, services, and which organizations and politicians to support," says Carli Gernot, Manager of Trends, North America at Mintel. "Evaporating trust means that companies sometimes have little choice but to communicate where they sit on various issues, make bold moral actions and take clear political stances when necessary. Product innovation that meets the changing needs of apprehensive consumers can build or redeem trust, including adding more information to packaging or incorporating livestreams of production methods. In the year ahead, brands will need to court consumers with transparency, honesty and facts; at the same time, they will need to find new ways to prove their positions," continued Gernot. The Value Equation Budget-minded consumers are weighing a variety of value factors for each purchase decision, and brands are making these individuals a priority. Carli Gernot, manager of trends, North America at Mintel says, "While it's true that values matter, brands are similarly clear about the importance of value when appealing to lower-income or merely budget-focused consumers. Consumers, on the whole, are feeling a bit more positive about their money – 43% of Americans describe their economic situation as 'healthy' in 2017, according to Mintel research – although they are still cautious with spending. More brands are focusing efforts to align with values, but value matters just as much to many consumers, and for a significant portion, it's the most important factor in their shopping decision." "Tighter budgets will cause many consumers to re-evaluate whether their go-to choices are worth the cost and brands need to be able to respond accordingly. Because a large proportion of rural and low-income consumers don't have home broadband, finding value online isn't necessarily their solution for saving. The physical still matters for many consumers," Gernot adds. "As economic uncertainty continues its hold on the North American consumer base, brands that engage with low spenders and develop low-cost alternatives are set to enjoy increased attention from those looking to save in the coming year." Health Yourself In an uncertain and seemingly unstable world, self-care and preventative health are becoming essential for consumers across demographics. Stacy Bingle, Consumer Trends Consultant at Mintel, says, "Interest in self-care and preventative health has been building for decades, but a combination of strong forces is bringing these topics into the spotlight in 2018. Fake news, global terror threats and sociopolitical unease are impacting consumers' well-being. In fact, Mintel research finds that two in five Americans (41%) and Canadians (39%) cite feeling less stressed out as a reason they manage their health. This is motivating many to incorporate proactive wellness methods into their daily routines, and brands will facilitate this movement with above-and-beyond initiatives. "Emerging concerns that affect various groups will require more personalized pathways to health in the coming year. A shrinking middle class will necessitate approaches for low-income consumers; teens and young adults will face new issues resulting from a lifetime in front of screens; and the world's opioid crisis will demand even more holistic pathways to wellness. The opportunity is ripe for brands in any sector to develop their support roles for the growing number of consumers seeking to better themselves and get ahead of health concerns.". Life in Sync: Voices & Visuals As the line between online and offline blurs, smart systems are delivering seamless convenience – with voice control and image recognition at the helm. "The first iteration of the trend 'Life In Sync' – one of Mintel's North America Consumer Trends for 2017 – correctly predicted that life would become 'seamless and smarter thanks to major advancements in artificial intelligence (AI).' That trajectory continues, and computer systems are now adept at understanding the words we vocalize and the images we present to them. In 2018, speak (or show) and you shall receive as the time has come for the quickness and intuitiveness of chatbots to migrate from type to talk," says Stacy Bingle, consumer trends consultant at Mintel. "The future of AI is fraught with concerns, but it will also bring unimagined benefits to the world. According to Mintel research, three quarters (73%) of Canadian consumers who are interested in making their home better connected agree that using smart devices saves time when performing day-to-day tasks. Eventually, augmented reality (AR) will move from phones to the field of vision, syncing worlds even more effortlessly. Brands can work toward a seamless and synced future today by using voice- and visual-based technology to truly take the 'think' out of consumer interactions," concludes Bingle. Source : www.packagingstrategies.com
Packaging Outlook 2018: Fundamentals Drive Packaging Innovation
Corrugated, Retail

Packaging Outlook 2018: Fundamentals Drive Packaging Innovation

The recent series of Vision 2025 focus groups conducted by PMMI, The Association for Packaging and Processing Technologies, captured an increasingly popular sentiment throughout the packaging community: “The more things change, the more they stay the same.” According to input received from more than 58 consumer packaged goods (CPG) professionals, some familiar fundamentals are fueling new approaches to industry challenges. These include changing consumer demands, their impact on the internal production operations of CPG companies and increased collaboration between CPGs and original equipment manufacturers (OEMs). These ever-present factors are longtime influencers of change in the packaging sector. However, the resulting solutions feel very fresh.


When we talk about the core fundamentals, what exactly do we mean? Changing consumer demands can refer to several factors. First, increasing calls for greater convenience and dwindling tolerance of delays in gratification continue to create challenges for manufacturers. What do consumers want now? A diversifying range of products, easy-to-use packaging and single servings top the list. As a result of these demands, we’ve seen the rise of the meal kit market, with players like Blue Apron and Hello Fresh offering consumers the experience and nutrition of a homemade meal without the hassle of searching for recipes and shopping for ingredients. Changing consumer demands also encapsulate the rising call for clean label products. Though the industry may not be aligned on what constitutes clean label, the key takeaway is that consumers are increasingly weary of ingredients they do not recognize, prompting demands for options free of GMOs, gluten and preservatives. A growing desire for healthier lifestyles also sparks requests for lower sodium, sugar and calorie counts. However, some of these demands contradict the reality of purchase decisions as consumers continue to prioritize taste. Increasingly specific and diverging requests from consumers also present CPGs with new challenges, creating the need for innovative packaging solutions. The desire for customization, the need for greater differentiation amid a crowded product landscape and the push for manufacturers to hold inventory for faster shipping create hurdles on packaging lines and in distribution channels.


As a result of changing consumer habits, manufacturers require increasingly flexible, multi-functional equipment to allow for quick and efficient changeovers—and often short runs rather than long product runs. Over time, we’ve seen increased demand for user-friendly human machine interfaces (HMIs), tool-less equipment changes, modular components and clean-in-place (CIP) capability. These attributes reflect the need for allergen controls, compliance with Food Safety Modernization Act (FSMA) regulations and for waste reduction.
Changing consumer demands require maximum flexibility in packaging machinery to be able to handle short runs and different packaging formats.
  In short, this combination of challenges has spurred the need for a new balancing act—especially for ready-to-eat (RTE) products that have complicated requirements for space and logistics. The bottom line is that increased complexity in the supply chain adds cost. Manufacturers seek solutions to reduce complications matters where they can, implementing “one voice” programs to get all departments on the same page—especially in bringing marketing closer to production operations, and overcoming the potential for strained relations. By bringing departments closer together and boosting collaboration, these companies hope to gain agility.


The need for greater collaboration extends beyond CPG departments. While manufacturers have always depended on OEMs for critical solutions and expertise, the need for collaboration continues to grow as the challenges become more complex and standard operating procedures default to an increasing number of short runs. When asked what the ideal arrangement between CPGs and OEMs would look like, focus group participants listed several points. These include having both parties come to the table on a project early in the design phase. CPGs would also like OEMs to help them manage the operating costs of their equipment, provide transparency, integrate with other parties in the development of a project, innovate with CPG input and provide training and parts support after making the sale. Additionally, CPGs would like their OEMs to act as true partners and think ahead to foster strategic improvements.


While the core approaches seem broad and long-standing, the technological evolution and industry initiatives they fuel may seem much more contemporary.


The need to meet constantly changing and diverging consumer demands prompts innovation in a wide range of equipment, materials and processes. For example, many CPGs participating in the report cited advances in additive manufacturing and 3-D technologies—particularly in thermal form filling. In addition to the need for CIP-ready solutions, sophisticated automation, equipment compatibility with new materials, tool-less changeover and modular components, CPGs also require self-learning and self-monitoring attributes from their equipment as they embrace Industrial Internet of Things (IIoT) technology. On the materials and containers front, CPGS need solutions for “handheld food” for grazing consumers, preservative attributes to compensate for preservative-free foods, connected packaging for track-and-trace solutions to challenges related to e-commerce and options to improve label stock variety. Meanwhile, process improvements may include the adoption of phone apps for robust marketing around e-commerce, the use of meta-data for better understanding consumer demands at retail and innovations in product transport beyond automated guided vehicles (AGVs).


Since the days of Computer Integrated Manufacturing (CIM), manufacturers have aimed to connect machines enterprise-wide. Now, the next-generation of this initiative, Industry 4.0 stands to provide companies with an even more unified view of their manufacturing operation by leveraging big data and improved HMI. However, widespread implementation depends on whether suppliers can clear up manufacturer confusion. CPGs perceive challenges around interoperability, data integrity and the oversupply of unnecessary features. However, there are many benefits to be gained from Industry 4.0, including the identification of weak points and early detection of issues with self-auditing. Some CPGs are even looking to applications of augmented reality (AR) for troubleshooting and training.


While e-commerce offers most CPGs a promising future for sales growth, many must sort through the growing pains as they find their footing in the digital space. For many companies, it is difficult to forecast demand on e-commerce platforms and overcome challenges with fulfillment and content verification—all while meeting sustainable packaging demands and retaining control over branding when products are re-packaged for distribution by third parties. Some companies struggle to identify which of their products are best suited for e-commerce, and frozen food manufacturers are especially eager to understand how to get in the game. To overcome these challenges, companies are looking to high-growth e-commerce markets like China. They also aim to implement packaging technologies that respond to climate challenges and employ alternatives for fulfillment, including in-house sourcing and other third-party sourcing solutions.


Workforce shortages have plagued CPGs for years as they battle negative images associated with manufacturing and the challenges with employee development. As the boomer generation plans to retire, the threat of a knowledge gap looms large. However, companies are making strides in recruitment and education to better retain talent. These steps include carving out swift, individualized paths for growth among junior workers. Additionally, CPGs are working to make jobs more interesting for employees, connecting them with their work on a deeper level and improving recognition for a job well done. Several companies advocate for training provided by technical schools, apprenticeship programs providing young workers the opportunity to learn key skills on the job, while others report that union affiliation can sometimes prevent such creative solutions. Improving benefits and automating certain jobs are also measures on the table for companies to consider.


Keeping pace with workforce development is a challenge associated with generational differences. CPG respondents reported the management of expectations among their younger workers along with the resistance to change from their older workers as key challenges. Measures to improve communication and collaboration include convincing emerging leaders to take ownership of and advocate for their work, and increasing the use of technology and social media to better connect different generations of workers.


The rapid changes to technology and the encroaching retirement of the baby boomer generation can seem overwhelming at times. However, today’s most complex and pressing challenges and opportunities are rooted in a few fundamental and longer-term factors—factors that have been tackled and overcome before. Source : www.packagingstrategies.com
Ready To Deliver – Canadian Packaging

Ready To Deliver – Canadian Packaging

New retail realities help drive accelerated global growth for retail-ready packaging solutions. No one can deny or dismiss the enormous competitive impact of online shopping and e-commerce retailing on the traditional brick-and-mortar retail outlets across North America. But neither should anyone discount the retailers’ ability to adapt to new challenges, however urgent and far-reaching they may be. For all the promise and excitement of the disruptive power of e-commerce to alter modern consumers’ purchasing behavior—fueled by the meteoric growth of Amazon and other e-commerce powerhouses offering a vast growing range of everyday consumer staples for prompt home delivery at similar or lower—the lion’s share of average North American consumers continue to rely on traditional shopping outlets for a vast majority of their everyday needs, especially the food-and-beverage products. That said, there has never been as much pressure on physical retailers to reduce their operating costs, their labor costs in particular, since the inevitable move by larger e-tailers into the grocery business, as highlighted by Amazon’s US$13.4-billion acquisition of Whole Foods Market earlier this year, followed by significant price-cutting of a large range of organic food products sold by the upscale retailer. While some retailers have already responded in kind by either launching or beefing up their own e-commerce presence, many of them have accelerated efforts to achieve greater cost reductions at their stores and throughout their supply chains—ranging from introduction of automated self-checkout aisles to cutting back on operating hours—to counter the e-commerce firms’ inherent advantage of lower overhead costs. As part of this cost-cutting, traditional retailers are also expected to increase their use of the so-called retail-ready packaging (RRP) solutions—also called shelf-ready, display-ready or pallet-ready packaging—which have already yielded impressive savings in shelf-stocking, product handling and inventory control costs since their widespread rollout across North American markets in the last decade.

Tubs of sour cream sit tightly in their cutouts inside a RRP tray made for the ALDI supermarket chain.

SHELFISH DESIGNS  Designed to allow the packaged consumer goods to be readied for sale or merchandising with minimal opening or set-up effort at the store level, RRP packaging such as die-cut pre-perforated corrugated boxes, die-cut display cases, shrinkwrapped trays and modified-atmosphere cases combine the practical advantages of easy handling, better product identification and enhanced transportability with an additional opportunity to market the product for better visibility and shelf impact at the store level. With RRP’s widespread adoption initially driven by the Big Box and Club Store retailers as a way to keep prices low, this innovative secondary packaging format has not only been warmly embraced by larger supermarket chains, but also in other retail channels—primarily because it does not require y the fact that the store staff to unpack the inner contents of the RRP package. As a recent report from market researchers The Freedonia Group points out, “Gains will be supported by further growth of mass retailers and club stores, as well as food and beverage sales volume in nontraditional outlets such as drug and dollar stores. “Additionally, the proliferation of club stores and ‘no-frills’ deep-discount grocery stores will be especially important for RRP, as such stores primarily sell merchandise directly from secondary packaging and require their vendors to ship products in RRP.” Projecting the U.S. market demand for RRP packaging to grow by 5.2 per cent annually over the next three years, The Freedonia Group study forecasts the U.S. market for RRP to surpass US$6.2 billion by 2020. According to the report’s author Esther Palevsky, “Growth will be supported by expansion in the retail user base and increased presence of value-added box types.” As Palevsky explains: “The disruptive trends in the North American food retailing landscape will bode well for RRP. “Among such trends is the increasing competition that traditional supermarkets face from a host of alternatives, including club stores, deep discounters, mass retailers, drug stores, farmers’ markets, and e-commerce vendors. “Increased openings of smaller-format locations by mass retailers will also promote gains for RRP,” Palevsky adds, “as these stores carry a more limited product selection than their traditional counterparts and have fewer employees. “These stores can benefit from RRP’s ability to speed up the stocking of shelves and increase shelf space efficiency.”

Equipped with high-speed pick-and-place robots inside the enclosure, Delkor’s MSP-m Series case-packer makes light work of placing stand-up pouches inside pre-printed retail-ready trays that can be placed directly onto the store-shelves upon their arrival with minimal effort.

According to Paula Feldman, director of business development at leading packaging industry group PMMI, The Association for Packaging and Processing Technologies in Reston, Va., “Urbanization, population and economic growth are significant drivers for RRP, especially when they are accompanied by an increase in the number of supermarkets and large box stores. “Because RRP enhances shelf appeal and supply chain efficiency, retailers often see it as a ‘must-have,’ and use their considerable leverage with CPG manufacturers to make it happen. “As they adjust their packaging requirements, manufacturers must continue to innovate to stay competitive,” she sates. Tony Corsillo, general manager for the Retail Packaging & Displays Division of Toronto-headquartered corrugated packaging manufacturer Atlantic Packaging Products Limited, agrees: “Some of our customers request RRP due to retailer pressure. “It all starts with cost-savings for the retailer to stock the shelves, which leads to lower merchandising fees. “However, many others following are simply following suit while trying to stretch out their use of plain traditional packaging to save costs—not realizing that branding has a larger bottom-line impact in the long run,” Corsillo relates.

Pouches of the popular Fisher brand of different varieties of processed nuts are easily displayed in their upright positions on a Walmart store-shelf by the virtue of being pre-packed into the Cabrio Cases trays on Delkor’s Trayfecta G Series case formers.

THE RIGHT IMAGE  “In the end it is the impact of the brand image improvement which raises the overall sales volume,” Corsillo explains, “and many larger CPGs with a global presence and ties to Walmart, or other large retail chains in Europe, have all experienced the many benefits of switching to RRP designs.” Going forward, Corsillo predicts the RRP format to keep growing, “Because stockability and visual appeal will become even more important as consumers begin to lower the shopping decision time.” While Europe currently remains the largest single market for RRP packaging, “North America is anticipated to grow at a significant rate due to retail market growth in Canada and the U.S.,” according to another market study conducted by the U.S.-based Global Market Insights, Inc. “More product visibility and brand retention are anticipated to be the key driving factors to influence marketers to adopt this technique,” the report states, “while easy transportation, reusability, and recyclability are likely to attract more retailers.” Projecting the global market for RRP to exceed US$71 billion by 2023, the report identifies food, beverage, bakery, electronics, flowers, and health-and-beauty products as the most promising categories for future RRP market gains worldwide. “The increase in competition among FMCG (fast-moving consumer goods) companies, owing to large number of competitors coupled with consumer shift, is likely to boost retail ready packaging market growth.”

A wide assortment of the two-piece retail-ready display trays made and filled inline by the high-speed SOMIC machinery.

Rick Gessler, vice-president of engineering at secondary packaging equipment manufacturer Delkor Systems, Inc., sees a “bright future for RRP,” citing nearly a billion Delkor-patented RRP packaging produced on Delkor equipment specifically designed specifically for this purpose annually. Says Gessler: Yes, there are many customers buying online and that trend will likely continue to grow. “However, the brick-and-mortar stores still play a vital role and consumers are still relying on them, particularly for daily shopping such as household groceries,” he points out. “That puts that onus on these retailers to be more operationally efficient,” he says. “With RRP, stores can more quickly and efficiently restock shelves with cases that are easy-to-open and visually appealing when placed on the shelf,” Gessler continues. “This helps retailers ensure that their shelves are fully stocked and that products are not missing in the aisle, while consumers can quickly find the products they are seeking in the aisle. “It’s a win-win for both retailers and consumers,” Gessler states. “It was important to us and to our customers to be able to offer systems that can produce multiple package formats without the need to add additional machines to those systems,” he explains, “so we took on an initiative to create new package options that were efficient in terms of packaging material usage, while also leveraging equipment that can produce multiple formats. “As we all know, more efficient material translates to lower package cost for our customers,” Gessler elaborates, “and multi-format packaging systems translate to streamlined plant operations and flexibility to better meet the requirements of the retailers.” With decades of experience in the manufacture of case-packers and many types of cartoning machinery, Delkor has used its expertise to develop the Trayfecta G Series former that can form both standard shipper boxes as well as the Cabrio Case RRP packages without having to add a bliss-style former to the packaging system. “For Delkor’s customers, it’s like having three machines in one,” he says, noting that Delkor’s recently-launched Club Store Stackable Tray is produced on the Trayfecta G Series case formers. “The versatility of the Cabrio Case is well-proven by its rapid growth,” he adds, “as its usage has grown to more than 200 million cases per year over the past three years.”

A sampling of the many types of pre-perforated RRP cases produced by WestRock to pack a wide range of consumer products in easy-to-open packaging requiring minimal manual effort to stock on the shelf without any product handling of the contents.

KEEP IT SIMPLE  Peter Fox, senior vice-president of sales for North America at SOMIC America Inc. in Bensenville, Ill., says North American retailers have some catching up to do to their European counterparts in terms of RRP adoption, especially in making more use of the display tray packaging format that has largely displaced wraparound RRP boxes in Europe. “The most effective retail ready package is one that is simple for the stockperson to open and display, requiring no directions and absolutely no tearing of the corrugated,” says Fox. “This is why tray and cover is the dominant retail ready package,” says Fox. “In Europe, SOMIC produces about 80 per cent of our machines for tray cover solutions,” Fox relates, “while the other 20 per cent are either wraparound case-packers or combination machines. “While the opposite is true in the North American market, this trend will flip over the next 10 years with significant gains for tray cover applications,” says Fox, pointing to the ongoing growth of flexible packaging formats as a key driver for this trend. “Due to the proliferation of the flexible packaging materials, the stand-up pouch and pillow-pack retail-ready presentations account for the bulk of the products we run on SOMIC lines, which have the ability to stand pouches upright for display or lie them flat for wraparound case formats—all on the same machine,” Fox explains. “Retail markets are looking to reduce the time to get product on shelf, but at the same time do not want to look like a warehouse store,” says Fox, citing SONIC’s diverse customer base comprising leading multinational manufactures of pet food, dry foods, dairy and confectionery products, with an installation base stretching from Canada to Russia. “Having grown up in Germany in the midst of the of the birth of the European retail-ready style packaging, SOMIC’s expertise in this field is founded in the design of our machines as well as the material designs that provide the unique retail ready packaging,” Fox states, “which is why SOMIC is a global leader in this market. For Nicole Lipson, segment marketing manager at Norcross, Ga.-headquartered corrugated packaging giant WestRock, an effective RRP package should address the so-called “Five Easies” of being:
  • easy to identify;
  • easy to open;
  • easy to stock;
  • easy to shop;
  • easy to dispose of.
“Following the tenet of the Five Easies means retailers get product on the shelves faster and consumers find shopping easier,” says Lipson, citing WestRock’s Meta brand of RRP boxes and equipment dedicated to high-speed forming of display-ready cases and trays. “Our expertise in understanding customers’ supply chains, transportation challenges, fiber and sustainability requirements and branding guidelines means we can help them find the best solution for that product and that channel,” Lipson relates, citing a successful RRP project WestRock has recently completed for a Canadian customer. “The customer needed a retail-ready palletized solution for a bagged product, for which it was literally hand-folding cartons manually,” she relates. “By assessing the product, the labor and the distribution process, we recommended a WestRock trayformer and a proprietary tray design. “With the implementation of the equipment and the new container, we helped the company realize labor and fiber savings beyond its expectation.” Says Lipson: “All our packaging solutions are customized for each company’s specific requirements, which combined with our knowledge of equipment makes us unique in the industry—offering customers the best of both worlds.

Manufactured by SOMIC, the 424 series machines enable high-speed production of an extremely broad range of RRP tray designs to suit virtually any primary flexible package format.

CREATIVE TYPE  “We can create designs and custom RRP containers for boxes, pouches, odd-shaped cans, jars or bottles, beverages, wine and other products with a large array of designs that are proven in the grocery and club channels.” According to Lipson, the RRP offers CPG manufacturers and their suppliers of packaging and equipment tremendous opportunities in the North American market moving forward, driven by intense competition among retailers and rapid proliferation of retail channels. “Retailers are seeing challenges from all side: stores are moving to smaller formats; the center store is shrinking; and consumers have more places than ever to purchase their food products. “To respond, CPG manufacturers are evolving rapidly to supply retailers with products faster than ever, hence shelf- and retail-ready packaging makes perfect sense,” Lipson states. “Smaller store formats for specialty and grocery, for example, are the perfect environment for shelf-ready packaging due to its advantages in stocking,” she says, “while other channels such as convenience stores and dollar stores also offer good growth opportunity. “Our goal is to help consumer products companies develop every container, for every product, for every channel,” Lipson asserts. “With the grocery segment changing so rapidly, today’s retailers must be able to populate and stock stores quickly and easily,” Lipson concludes. “No one likes an empty shelf.”
Plastic v cardboard: which is greener?
Corrugated, Retail, Trends

Plastic v cardboard: which is greener?

When considered over the lifetime of the packaging, paper and cardboard embody far more greenhouse gases than their plastic equivalents. From Carbon Commentary, part of the Guardian Environment Network
Riverford packaging chart
Riverford Organics, one of the largest vegetable box schemes in the UK, has suggested it may move away from cardboard packaging and towards plastic. In this week's note to customers, Guy Watson at Riverford says that plastic boxes could reduce the carbon footprint of the company's packaging by 70%. He strongly hints that the company wants to move to plastic immediately but is frightened of the reaction of customers. This issue is an important one. Householders continue to see plastic as wicked and paper-based goods as benign. But when considered over the entire life of the packaging, paper and cardboard embody far more greenhouse gases than their plastic equivalents. Paper products take substantial amounts of energy to make. Crushing a tree down into small fibres, mixing the wood pulp into a slurry and then passing the wet mass through huge rollers cannot be done without use of enormous quantities of power. Making paper and cardboard is almost certainly the third largest industrial use of energy on the planet. By contrast, plastic is light, durable and its manufacture is generally not particularly energy intensive – at least by comparison to paper. A second concern is that many paper and cardboard products, probably including Riverford boxes, end up in local authority landfill, where they rot down anaerobically, creating the greenhouse gas methane in the process. Plastic, as is well known, doesn't rot and sequesters its carbon for ever. Guy Watson's company delivers its products to homes in cardboard boxes that can be returned to the delivery driver the following week. Watson says that the boxes are designed to last for ten delivery cycles before being recycled. They typically only actually survive four outings before they are lost or made unusable. Because these boxes are 'free', the householder doesn't look after them properly. As a result, about 10% of the total carbon footprint of the business is derived from making and recycling the boxes. This is about the same figure as the carbon cost of shipping the Riverford vegetables to the local distribution hubs. If I have done the calculations correctly, the carbon cost of its boxes would be greater than plastic replacements even if they did actually last 10 cycles and were never used, as the company says, 'to let the dog give birth in'. Riverford has done some of the best and most incisive work on carbon footprinting of any business in the UK. The company's view seems to be that that plastic – far more reusable than paper and cardboard – is a far better solution that its current packaging both for the outer boxes and for carrying the individual products. Its sense of frustration is palpable as it says 85% of our packaging footprint is made up of paper and cardboard yet our customers are very happy with this packaging; virtually all negative comments on packaging relate to plastic punnets and bags which contribute only 8% to the footprint. It is the customer who is stopping Guy Watson and his colleagues using long-lasting plastic for any form of packaging, not economics or carbon accounting. Watson despairs of getting householders to understand the true environmental cost of paper goods and one can only sympathise as he demands government action to force suppliers to recognize and account for the full cost of packaging. We all need to understand, far better than we do now, that anything that doesn't last – like paper for packaging – is almost certainly a far greater problem than an almost infinitely recyclable plastic crate. Yes, of course, plastic is an increasingly serious litter problem, in the UK and elsewhere. But it is not a significant cause of CO2 pollution compared to paper. As a devoted customer, my suggestion to Guy Watson is that he pushes ahead with plastic – perhaps only with customers who agree in advance – and gives us a small price reduction but imposes heavy deposits on each plastic crate left on our doorstep each week. If we don't leave the box out next week, we get charged. Painful, but there is nothing like a punch in the wallet to get people to change behaviour. In the longer run, a 'closed loop' recycling system using plastic crates is infinitely more environmentally sustainable than one based on cardboard boxes. Source : www.theguardian.com
Packaging Outlook 2018: Paperboard Packaging Overview
Corrugated, Trends

Packaging Outlook 2018: Paperboard Packaging Overview

One of the cornerstones of the folding carton industry, and a reason for its continued stability, is the fact that most paper-based packaging is used for consumer staples. Nearly 60 percent of all paperboard packaging is used in food product segments such as beverages and dairy products, candy and confections, dry foods and frozen foods. The remainder of the market serves segments such as pharmaceuticals, cosmetics, toys, and most of the items found in grocery and club stores. While definitely not recession-proof as many in the industry have liked to say, it provides a level of security to the industry. There is positive news in the folding carton markets regarding  the relative stability of tons of paperboard  shipped, but the value of those shipments continue to slip. In 2016, the last year for which complete figures are available, the North American industry shipped 4.9 million tons of paperboard packaging with an average value per ton of $1,753, according to the Paperboard Packaging Council (PPC). This is nearly identical to 2015, with just a slight dip in the value per ton, which in 2015 was $1,765. Heartening news can be found in terms of workforce numbers; after shedding jobs every year since 2012, more than 1,000 jobs were added in 2016, bringing the total to 40,442. This, incidentally, is only the second time in the prior decade that the industry crossed the 40,000-job threshold. The dollar value of shipments dropped for the second year in a row, from $8.71 billion in 2015, to $8.59 billion in 2016. This is the lowest mark for shipment value in more than a decade. The last time shipment values were this low was 2004, with values of $8.53 billion. While the PPC predicts growth from the period between 2016 and 2020, it is conservative, at best. The industry is expected to grow at an average annual rate of 0.3 percent in sales and 0.5  percent in tons. The average value per ton per year is expected to drop 0.1 percent. RISI (risiinfo.com), an information provider for the global forest products industry, believes that, like 2016, 2017 was a year of marginal contraction. RISI forecast folding carton shipments drop by 0.7 percent. Despite the slight stagnation, RISI estimates folding carton shipments will increase 0.4 percent annually over the next five years. Shipment growth is expected to be healthiest in the middle of the five-year forecast, with RISI anticipating an economic slowdown in 2021 that will lead to flat shipment growth.
PPC's TRENDS 2017 Report - All forecasts and analysis presented by RISI, Inc.
  RISI predicts the total value of U.S. carton shipments to grow from an estimated $8.6 billion in 2016 to more than $9.6 billion in 2021. Average annual values per ton are predicted to increase 1.9 percent per year. The PPC continues to warn about the negative effects associated with increasing boxboard prices and the impact they have on profitability. From 2011 to 2016, paperboard costs rose annually at an average rate of 2.2 percent. Compare this with the 1.3 percent increase in the average value of folding cartons, and it is easy to see the problem. New European capacity, in combination with oversupply of cartonboard in China, has helped to push U.S. boxboard prices downward. Nothing has changed in the general breakdown of the industry. Independently owned private companies, defined as converters who do not own their own mill, comprise about 20 percent of industry sales. Market share has declined from approximately 30 percent over the past 15 years, due primarily to industry consolidation. According to research conducted by Smithers Pira (smitherspira.com), the value of the global cartonboard packing market passed the $100 billion mark in 2016, consuming more than 40.3 million tons of material in folding carton and micro/miniflute packaging applications. Several market influences will combine to push worldwide demand for cartonboard in packaging to increase at 4.0 percent annually until 2022, creating a global market value of $124.1 billion in that year.


The corrugated industry has made small, but sustained, steps since shipments plummeted following the crash of 2008. For 2016, the last year for which final statistics are available, the industry experienced increases in both the size and value of shipments, a welcome positive development. According to statistics compiled by the Fibre Box Association (FBA), corrugated industry shipments totaled more than 376.4 billion square feet in 2016, a 2.1 percent increase over 368.6 billion square feet in 2015. The value of shipments increased to $30.8 billion. While only a 0.8 percent increase over the prior year’s shipments, it’s the seventh straight year of growth. In 2015, the value of industry shipments increased to 30.5 billion, up from $29.8 billion in 2014. One thing in the corrugated market that forecasters can always rely upon is the breakdown of shipments delivered from corrugator plants (companies with their own corrugated production machines) versus sheet plants (companies purchasing corrugated sheets from a corrugator plant, which they then convert) remaining virtually unchanged. Eighty percent of industry shipments in 2016 came from corrugator plants, while 20  percent came from sheet plants, as has been the case for at least a decade without a single  percentage change. In addition to volume and value, productivity continues its upward trajectory. The average corrugator plant manufactured 1,010 million square feet of combined board in 2016, compared to 968 million square feet in 2015.
  In the ongoing commitment toward sustainability, slow and steady seemed to rule the industry as basis weights inched downward. In 2016, the average basis weight of corrugated board was 131.3 pounds per thousand feet, a miniscule tick downward from 2015’s average basis weight of 131.4 pounds per thousand square feet. While single-wall corrugated board continues to dominant in the industry, there was a slight downtick as it accounted for 90.4 percent of all production, compared to 90.7 percent in 2015. Corrugator plants consumed 30.8 million tons of containerboard to produce combined board, up from 2015’s 30 million tons. Consolidation continues to shrink the total number of plants in the industry, although the dip from 2015 to 2016 was relatively minor. In 2016, 1,155 industry plants were in operation. Of that total, 465 were corrugator plants and 690 were sheet plants. The workforce in the corrugated industry saw its first increase in a number of years. The number of employees in industry production was 57,075 in 2016, up from 56,227 in 2015. Not a substantial increase by any means, but a welcome development, nonetheless. Although the workforce growth was anemic, productivity continued to scramble a little higher over last year’s mark. Productivity in 2016 was 3,790 square feet per production man-hour, up from 3,670 square feet per production man-hour in 2015. IBISWorld (ibisworld.com), a business intelligence research firm, expected the price of corrugated boxes to shift direction in an even more aggressive fashion and rise 3.9 percent in 2017, much of it due simply to converters passing along increased material costs to consumers. Demand for retail-ready corrugated boxes, which allow the shipping containers to also serve as the retail packaging, is projected to increase 5.6 percent per year to $3.3 billion in 2020, according to industry research firm The Freedonia Group. Growth will outpace the overall corrugated box average due to continued solid expansion for revenues and store units among retailers that require retail-ready packaging, specifically club stores and limited assortment deep-discount grocery stores. Additionally, gains will reflect the presence of value-added features on retail-ready corrugated boxes, particularly high quality graphics and customization of box design.


The sustainability movement—the single most important development in the converting industries in the past decade—sees no signs of abating. While data often vary among research sources, all can agree that the green market is growing. The global green packaging market is primarily driven by a paradigm shift among consumers who now demand increased environmental awareness from packaging producers. The challenge for folding carton and corrugated converters is to discover the most effective means to let consumers know the environmental benefits of their products. A recent report from Zion Market Research Global (zionmarketresearch.com) finds that the green packaging market share was valued at $161.50 billion in 2015 and is expected to reach $242.50 billion in 2021, growing at a compound annual growth rate (CAGR) of 7 percent between 2016 and 2020. According to a report from Allied Market Research, the global green packaging market generated revenue of $132 billion in 2015 and is expected to reach $207 billion by 2022. The sector grew at a CAGR of 5.41 percent from 2016 to 2022. The food & beverage segment accounted for more than 60 percent of overall share in the applications segment. In the realm of sustainability, paperboard packaging options such as corrugated and folding carton are beginning to be seen as the most environmentally friendly packaging option, especially as consumers see the devastating effects plastic has had on the oceans. “Paperboard packaging,” said the PPC, “unlike fossil fuel-based plastic packaging, is made from a renewable resource, is recyclable and the best choice for the environmentally conscious consumer.” According to a report from a GlobalData (globaldata.com) global consumer survey, 65 percent of consumers globally always or mostly recycle product packaging and 53 percent always or mostly avoid excessively packaged grocery products. Leading retailers such as Target and Walmart have already outlined aggressive sustainable packaging goals, and just recently at the World Economic Forum in Davos, Switzerland, 11 global companies announced that they will work toward using 100 percent reusable, recyclable or compostable packaging by 2025 or earlier. The companies include international brands Amcor, Ecover, evian, L’Oréal, Mars, M&S, PepsiCo, The Coca-Cola Company, Unilever, Walmart, and Werner & Mertz. Additionally, fast-food chain McDonald’s also pledged to recycle 100 percent of its customer’s packaging across the world by 2025.


The threat from counterfeit goods poses a significant risk to consumers and to brands themselves. It is a problem that grows with each passing year and has yet to be adequately addressed as a systemic problem. Some of the statistics are staggering. Take for instance the fact that in 2016 more than 55 percent of the medicines purchased online globally were either of poor quality or fake. The anti-counterfeit push in the pharmaceutical industry, unsurprisingly, is growing because of increasing initiatives by the pharmaceutical companies, as the threats to end-users (and the inevitable lawsuits) are obvious. Folding carton manufactures are currently working to establish the means to better incorporate RFID technology into their products, including printing RFID sensor platforms that enable the printing of labels that combine a temperature and a first-opening sensor with a printed electronic Near Field Communication (NFC) antenna. The system interfaces with a smartphone, measuring and recording temperatures during the label’s lifetime, and also indicating whether the label has been opened or tampered with. The market for anti-counterfeit and security packaging will see significant growth over the medium term, with Smithers Pira estimating a market worth over $2.75 billion in 2015 and growing to more than $3.5 billion by 2022.   Source : www.packagingstrategies.com