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Outsourcing to CPs grows

The use of contract packagers expands, according to a survey of 200 representatives of end users. Satisfaction with service has improved.

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Contract packagers are getting better—or at least better appreciated—according to the results of Packaging World’s latest survey of end users. Actually, both statements are probably true, when the 2004 survey results are compared to the most recent PW survey, published in January ’02 (www.packworld.com/go/c095)

More than any other factor, this year’s survey shows an overwhelming level of satisfaction and enthusiasm among end users toward the companies they use for packaging assignments. In the earlier survey, there was considerable balance between those companies that were happy with CPs vs those who had issues with them.

In the 2004 survey, conducted on PW’s Web site, Packworld.com, in January, the favorable responses far outnumbered those that were negative. When the survey asked a completely neutral question about how the end users felt about CPs, the favorable responses outranked negative comments by 4:1, of those respondents who shared either a decidedly positive or negative opinion. Of course, many other responses combined both positive and negative factors. (See sidebar, Methodology, for a profile of the 214 participants that were selected for this report.)

Regardless of whether the respondents’ comments were positive, neutral, or negative, it’s obvious from the survey results that manufacturers will continue to outsource many packaging projects to CPs.

For the first time, the PW survey also reports on the use of offshore CPs. Although nearly half of the respondents say their companies don’t use foreign CPs, only 4% of the respondents say that their companies’ use of overseas CPs will decline in the future.

Most of the responses closely parallel the answers to the survey two years ago. Once again, technology that’s not available in-house and the minimizing of upfront investments were the two major drivers for using CPs.

Becoming a normal part of business

Some years ago, the use of contract packagers was normally limited to those instances when companies had orders for special packs or a company wanted to test the waters for a new product or package. Today, based on comments from manufacturing company respondents, CPs have become regular, routine business partners for some companies.

“We have very good lines of communications with our contract packagers,” stated an engineer with an industrial products manufacturer in the Midwest. “When we design a retail-ready product, we do so with our CPs’ capabilities in mind.” Similarly, a packaging engineer at a beverage company in the Mid-Atlantic States stated: “We view our contract packagers as full-service business partners, and we involve them from the design inception of the package all the way through to final shipping.”

The warehouse manager for a food processor in the Midwest said, “Our contract packager works well with our production and purchasing departments to develop top-notch packaging systems for our products. Because our products are food, this close relationship is vital.”

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