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Five ways contract packaging is changing

It’s more than rising fuel and energy costs. Change reflects the consumer’s mind-set and in-store trends. Respond by balancing production complexity with simplicity.

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At a glance, skyrocketing oil prices and marketplace demand for more-customized products don’t seem to go hand in hand. But they do, and they’re just two factors that will shape future decision-making about contract-packaging services.

On the one hand, the oil price spike has packaging teams looking harder at the type of material they use, and how much to use. At the same time, marketing and design teams are raising the bar for how it is used.

Now add in emerging factors such as growing societal demand for packaging that is recyclable or reusable, and the continuing emergence of new technologies and packaging tactics for attracting consumer attention. What emerges is the imperative for anyone who has a hand in contract-packaging services to be able to balance ever-increasing packaging value chain complexities with the need to simplify operations and procedures.

A cross-section of contract-packaging professionals raised these ideas with Contract Packaging magazine in cultivating a list of five trends that will drive near-term business across the industry. Our analysts also imparted advice on how those responsible for contract packaging management at consumer packaged goods (CPG) companies can approach co-packers to meet emerging challenges.

β€’ Sustainability. The first trend, toward sustainable packaging, coupled with the desire to lower packaging costs, will converge to bring about more-frequent use of retro and recyclable packaging materials, as well as a trend toward less packaging in general, our experts say. CPG companies should be looking for contract packagers to assist in at least two ways.

 1. Material use. Consider asking companies that may co-pack your next project to take a renewed look at packaging materials that have previously fallen from fashion. It may be time for them to shine again. That’s a trend Jeff Topits, director of technology and engineering for contract packager Diversapack (www.diversapack.com), Atlanta, GA, already has noticed. Co-packers generally had been moving away from working with paper, some board stocks, and cellophane. But these materials are being reintroduced as environmentally conscious options to materials such as plastics, which can’t always be recycled. Paper and board stocks are sometimes viewed as more cumbersome than plastics, but they are more environmentally friendly and can be marketed as such, Topits says.

β€œThese materials are popular againβ€”but for a different reason than they were originally used,” he says. β€œThey’re more cumbersome and difficult to use, but they’re greener. I say that to become more environmentally conscious, we have to look backward to go forward. We have to revisit things, like paper, that are no longer popular.”

2. Greener design. CPG companies could re-evaluate the extent to which they use certain materials  in packaging for another reason, says John Farren, a contract-packaging industry consultant who spent decades working in the business at Gillette Co. Expect continued high oil prices, which in July were hovering at record $140-a-barrel levels, to radically affect decisions on plastic packaging materials. Resins used in plastics production are a petroleum byproduct. Also, as energy prices rise, costs of materials used in packaging will rise, Farren predicts.

Better designs, fewer materials

To curb packaging costs, co-packers will be called upon for innovative packaging designs that will incorporate fewer materials. The leading edge of contract packaging has been moving upstream of assembly and filling activities and into design. Some co-packers have begun to hire experienced package-design talent away from CPG companies and design agencies, and the trend could accelerate. As part of the qualifying process, CPG companies should ask about a prospective co-packer’s expertise in design (i.e., is the company’s experience in packaging structure or graphics).

Whether intended or not, these changes will result in β€œgreener” packaging, Farren says.

β€œMy feeling is that as costs rise, there will be a serious rethinking about the packaging, the material itself, and the volume of packaging that goes into products,” Farren says. β€œWe’ve seen the elimination of cartons for stick deodorants, and Wal-Mart was a big initiator of that.”

Anticipating a trend away from cartons such as chip-bottle containers, Nor-Cal Beverage Co. (www.ncbev.com) has brought a shrink-wrap machine into its West Sacramento, CA, co-packing facility, says Pete Grego, director of co-packing sales and new business development. Shrink-wrapping reduces packaging waste because it often eliminates the need for components such as supportive trays, inserts, and pads.

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