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What’s in store for 2003

Des King kicks off the year by asking a cross-section of industry movers and shakers what we might expect from the next 12 months

The diary pages are still relatively fresh but what are they more likely to be pencilled in – promise or pessimism?

Whatever the future holds in store, one thing’s for certain: price is bound to be the major issue so no change there. Squeezing the supply chain is now second nature for retailers. There’s precious little left in the way of excess fat to be stripped out of the product, as any farmer will testify. So delivery is the only element left from which to drive down cost.

With e.commerce clearly gaining consumer acceptance on-shelf visibility will increasingly be called into question. Balance that with the need for packaging to continue to perform to high standards in the home itself. It doesn’t have to be all doom and gloom.

Design creativity is invariably the first component of the packaging mix called into account when marketing budgets come under pressure. Stick to your guns says PI3 Innovation structural design director Steve Kelsey.

“Marketers are turning more and more to innovative packaging concepts, at the expense of advertising spend, to help them market their way out of trouble. It’s time to look the buyer straight in the eye and tell him you know innovation is on his marketing director’s agenda and he has to pay for it.

“Innovation is a risk but the successful companies are the ones who develop risk-sharing strategies, partnership contracts and even equity swaps. The key is sharing – not carrying. The successful will recognise that development isn’t a cost of doing business, it’s a key differentiator.”

Customer/supplier partnerships are high on the agenda this year for Ian Welsh, packaging design controller at Safeway.

“I want our suppliers to be visionary along with us and to be proactive in pushing ideas forward. They need to be thinking about the future, rather than concentrating purely on service. We want to be solving problems jointly.”

But is the price of partnership, reduced margins? Not at all says Ian Welsh. “We have to keep things keen but I don’t believe that a good partnership means that someone has to suffer. Hopefully, it works for both sides. Good service and adding value are the two pillars on which any good company is built. With our suppliers we’re looking for an avoidance of a ‘them and us’ culture.”

Eye-catching point-of-purchase display packaging is an essential feature within any retail outlet. Mondi Packaging marketing manager Ian Gordon foresees it becoming increasingly linked directly to the products themselves.

“Brand owners are demanding ever higher packaging content in terms of appearance and information. This means that traditional packaging print cannot meet the brand owners’ demands without resorting to litho lamination which is very expensive and with high front-end cost.

“Mondi has now moved into the volume production of high-resolution print on packaging substrates using a refined six-colour flexographic printing process. Special substrates, such as metallics, present no problem and the final result can even be embossed to achieve packaging used as a display in its own right.

“The movement of POP from advertising display to actually combining itself with the product itself will be an area of tremendous interest in 2003.”

John Birkenshaw of Pira International is another to see major opportunities for flexo in 2003, not least in better addressing supply chain issues as a direct result of the process’s improved engineering capabilities.

“Everyone’s looking for cost reduction but can we squeeze the converter any more? Perhaps, but significant cost reduction will come from imaginative supply chain changes such as print on demand production and integrating print with pack operations.

“Mention these concepts and we instantly think of digital print, then realise that it is slow, costly and has limitations. So we’re stuck or are we?

“Conventional presses have developed tremendously, changeover times are now measured in minutes and computer to plate has revolutionised plate-making for all the major processes – reducing time scales and minimum viable run lengths, and making print on demand a practical reality without resorting to digital print.

“Integrating print and pack operations is more difficult. Ink jet looks ideal but has some way to develop. Meanwhile UV flexo would suit. As a process it has good stop/start characteristics and could be readily adapted to inline operation. Demand for radical cost reduction will drive this kind of radical approach.”

If Mr Birkenshaw’s assessment is correct then Reed’s forthcoming Flexo show at the NEC in March should be well worth a visit.

John Webb-Jenkins, chief executive of the Institute of Packaging, also has technology very much in mind, but of an altogether ‘smarter’ kind.

“2003 will see a greater impact of science and technology on the packaging industry. A simple box or a bottle is no longer enough. We now have the technology to introduce a whole range of ‘smart attributes’ to make packaging more exciting and user-friendly.

“Nanotechnology [the science of thin films] is bringing increased barrier properties to a range of products, particularly liquid packs. Breathable films allowing diffusion of gases under controlled conditions are mimicking natural phenomena.

“Cheap micro circuitry and the development of simple power sources, such as the paper battery, allow us to concentrate on the serious, such as RFID tagging, through to the frivolous like the packet of corn flakes which flashes the message ‘buy me’.

The user-friendly theme is also taken up by Mark Sheahan of CompGen, inventor of the ‘Simply squeeze to open’ closure and Inventor of the Year award-winner in 2002.

Mr Sheahan feels there will be a genuine move on the part of suppliers and retailers this year to deliver systems solutions for easier to open packaging.

“Brand owners are now also waking up to the fact that poor packaging can seriously damage their health, not just the purchaser. The real winners in the market will be the ones who are able and willing to think outside the box and take risks. A call for true innovation is now required and that will mean going back to the basics on how a pack functions.”

Also mindful of boxes, James Clancy of the Packaging Focus consultancy has words of comfort for carton board packaging manufacturers in 2003.

Carton board suppliers have had a tough time in the UK over the past few years. Servicing customers, whose own business has been whittled away by the weaknesses afflicting manufacturing industry in general, board suppliers have seen a cumulative drop of up to 40 000 tonnes in deliveries since 1998.

But recovery may be in sight. In our estimation, carton board demand is set to rise by up to 2% in 2003 and to stay on this course over the following years. Much depends, of course, on the speed with which UK manufacturing can extricate itself from recession.

“Board mills are at the forefront of the supply chain and will see stronger order books developing from third quarter onwards ahead of the recovery in manufacturing generally that is now predicted for the turn of 2004.”

Improvement towards the latter part of the year is also predicted by Bill Wager, chairman of Gilbert Curry Industrial Plastics, provider of customised transit packaging solutions to the automotive sector.

“The first half at least of 2003 will be a period of marking time but with volume of business picking up when a number of anticipated major projects come through in the third quarter.

“The overall drive is towards greater reusability fuelled by a combination of EU legislation, environmental issues and cost. Shorter lead times and reduced volumes will work in favour of smaller suppliers capable of innovative inner packaging for components but they’ll have to be flexible and fast to respond.

“Tighter quality standards may well thin out the existing supply roster. The Japanese requirement for having all suppliers near to or on-site hasn’t happened here yet but, in the long term, that’s going to be very much the trend.”

Last gaze into the crystal ball comes from the PPMA’s Andrew Manly who is cautiously optimistic about machinery sales during 2003.

“Exports are recovering slowly and are particularly good in the States, which must bode well for a continuing recovery in the US economy. We’re hearing gloomy prospects from across the EU, especially Germany and Italy where, if they manage to hold their own over the next 12 months, it’ll be something of an achievement.

“The UK domestic market has been flat for some time now and there is undoubtedly a lot of used machinery on offer at the moment. However, there are certainly indications of some recovery within the food sector which is good news.

“Overall, the situation is still best described as ‘fragile’. It only takes something like a worsening situation in, say, Iraq to set everything back.”