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An obligation to excellence

An obligation to excellence

An obligation to excellence

As manufacturers continue to demand increasingly high-spec products with ever shorter turnarounds, the need for contract packaging services has grown enormously. The Contract Packaging Association’s president Chris Nutley explains.

Contract packaging serves many different functions across the consumer sector. As a result, it reflects a range of influences, from personal consumer preferences, to larger economic forces like free-market competition and mass marketing.
In order to stay one step ahead of demand, companies respond to shifting consumer behaviour by continually striving to meet the needs of producers, retailers and users.
The key to successful contract packaging in 2015 is innovation, while remaining strictly economical.
A proper balance must also be struck between cost-effectiveness and merchandising in a marketplace that demands responsible environmental practices and high levels of customisation.

Sustainability and materials
Consumer awareness of environmental issues is peaking, alongside producers’ demands for economical packaging. As these forces converge, creative packagers will continue to turn to eco-friendly package designs.
Packaging materials fall in and out of favour; where streamlined plastic materials were once in vogue, the current preference is for recyclable paper packages.
In addition to adopting socially responsible practices, contract packaging providers will continue to respond to the rising cost of materials. Plastics are by-products of petroleum, the price of which will continue to shape packaging decisions. Contemporary package redesigns ought to strive to reduce the total amount of materials used, resulting in a more economically and ecologically responsible approach.

Innovation and technology
Technological advances continue to drive innovation. Consumers’ demands for creative new packages will continue in 2015, as buyers seek greater convenience and capability from their products.
Specific contract packaging sectors will be affected more than others, such as the food packaging industry, which continues to respond to shoppers’ calls to reduce waste.
In the UK, more than 18 million tons of produce ends up in landfill each year, prompting demands for better shelf-life and more efficient portion packaging. Reusable and sealable units are also poised for growth, as portability and serving-size packages continue to prove popular with busy consumers.
Data gleaned from the recent PACK EXPO 2014 show growth in flexible packaging and the use of films, rather than containers, as well as measures to thwart tampering and counterfeiting. Child safety is another major concern shared by contract packagers and their customers.
As producers and consumers demand greater accountability, increased attention is being paid to flexibility and customisation. This trend shows no sign of waning, as contract packagers collaborate with retailers to create unique shelf presences. Contract providers are also tending to use smaller production runs to maximise the impact of custom options.
Seasonal specials and promotions, for example, will be closely linked to labels that can be easily altered for pinpoint merchandising. Increased collaboration between packaging contractors and the manufacturers and producers will streamline packaging costs and help keep the packaging supply chain tight in 2015.
By strengthening relationships throughout the packaging process – from design to product management – contract packagers will continue to expand service offerings and their ability to respond quickly to custom requests.
For flexibility and efficiency, packagers are delaying some parts of the design process until the final stages of production. For example, standard labels with customisable portions suited for last-minute messages to consumer enable producers to send timely, personalised slogans, or promotions, directly to their target audiences.
In some cases, shifting printing responsibilities to packagers, rather than relying on printers, is the most cost-effective approach. In practice, the adaptable strategy conserves materials and aids warehouse inventory management.

Industry trends
The Contract Packaging Association estimates that the industry has doubled in size since 2008. With that type of growth and packaging innovators’ willingness to expand services, the industry is poised for continued gains in 2015.
Food and beverage, pharmaceutical and personal care products continue to provide a large share of contract packagers’ business, and this won’t change dramatically in the coming months. In fact, the call from these industries will continue to increase for contract packagers, as increasingly dynamic solutions are required.
Technology plays an important role in the future of packaging contractors, with serialisation, digital printing and advanced robotics leading the way for cutting-edge providers.
Integrating the latest technology into the packaging process includes streamlining and economising through more efficient production methods, but technology also finds its way into packages themselves, maximising the potential of materials and merchandising.
Contract packaging is a growing business, paving the way for providers of all sizes to make gains. Pharmaceutical packaging alone, valued at $50 billion in 2011, will reportedly be worth more than $73 billion by 2018.
Innovation and expanded services will enable contractors will continue to meet the evolving needs of producers and consumers, capturing their share of a swelling market.
Sustainability and customisation will continue to drive trends in 2015, leading to growth in CPG, like personal care products, food and beverages. Integrating technology and reducing the amount of materials used are additional forward-thinking goals shared by contractors and their clients.

Sustained effort
The Contract Packaging Association estimates that industry growth doubled in 2008. With the seemingly endless demand for sustainable packaging and the constant efforts being made by manufacturers to cut costs and increase efficiency, players in the contract-packaging industry must continue to be innovative and cost-effective.
Collaboration within the supply chain between contract packagers and manufacturers has a driving force behind packaging concepts and innovative, more cost-effective designs. This type of mutually beneficial arrangement enables contract packagers to benefit from new designs while manufacturers reduce R&D costs. With 73-85% of consumers’ purchase decisions made at the point of sale, packaging designs must be innovative and attractive if a brand hopes to gain new customers.
Recently, contract packagers have expanded service offerings to include more end-to-end processes, such as early-stage design capabilities and the management of products throughout their lifecycles. With a broader range of services offered by contract packagers, manufacturers can streamline operations and rely on fewer suppliers.

The following are some of the other notable trends and highlights within the contract-packaging industry:

  • Some contract packagers have gained an edge over competitors by adopting progressive technologies such as serialisation concepts, robotics, and digital printing.
  • Serialisation remains at the forefront of contract packaging processes, but the regulations regarding this process are often vague and unclear, leaving some packagers unsure of the value of such services.
  • Many manufacturers many want to be more involved with the development of sustainable packaging.
  • Consumers’ increasing concern with the function of a product’s packaging has become a critical consideration in the development of new packaging.

The Contract Packaging Association predicts that, due to its ability to offer innovative, cost-effective solutions, the industry will continue to grow as manufacturers increasingly outsource this stage of the supply chain.