2016 European Barrier Films in Flexible Packaging Product ... · European flexible packaging...

2016 EuropeanBarrier Films in Flexible Packaging

Product Leadership Award

2016

Akulon XS

BEST PRACTICES RESEARCH

© Frost & Sullivan 2016 2 “We Accelerate Growth”

Contents

Background and Company Performance ........................................................................ 3

Industry Challenges .............................................................................................. 3

Product Family Attributes and Business Impact ........................................................ 3

Conclusion........................................................................................................... 7

Understanding Product Leadership .......................................................................... 8

Key Benchmarking Criteria .................................................................................... 9

Best Practice Award Analysis for DSM ........................................................................... 9

Decision Support Scorecard ................................................................................... 9

Product Family Attributes .................................................................................... 10

Business Impact ................................................................................................. 10

Decision Support Matrix ...................................................................................... 11

The Intersection between 360-Degree Research and Best Practices Awards ..................... 12

Research Methodology ........................................................................................ 12

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 13

About Frost & Sullivan .............................................................................................. 14



Background and Company Performance Industry Challenges

Companies specialized in developing plastic films with adequate barrier properties for

protecting, preserving, and extending the shelf life of packed goods witness the highest

rate of product adoption in the European food packaging industry. On one hand, plastic

substrates deliver significantly high flexibility to brands, especially manufacturers of

packaged food substances, in terms of printability, branding, sustaining, and preserving

the manufactured product. On the other hand, the lack of a sufficient barrier in the plastic

film is the key factor leading to the permeation of flavor, aroma, water vapor, moisture, or

any other gaseous substance. The existing participants in the European polyamide barrier

film market opine that polyamide 6 (PA6) is the ideal component for manufacturing

packages with the best combination of barrier properties as well as mechanical strength.

However, the high crystallization speed of this polymer is a challenge that barrier film

processors need to overcome. Traditionally, companies handle this challenge by either

reducing the processing speed, which affects productivity, or by combining PA6 with

unstructured polyamides or polyamide copolymers. In both cases, however, the

production cost increases because customers have to compromise on their productivity

efficiency or spend more in the process of blending PA6 with additional polyamides or

polyamide copolymers.

Companies operating in this market need to develop a technologically advanced version of

new polyamide that features a slower crystallization rate than the conventional PA6, but

the similar material property of PA6. With this feature, the advanced product version

would be able to match the crystallization speed of different material layers. The

developed bubbles would be more stable than before, and the processors would be more

flexible when processing barrier films. In addition, the produced barrier film would need to

be more stretchable than the existing offerings, which would require the application of less

force to achieve the desired blow-up ratio (BUR) level, providing companies with a

competitive edge over their peers in the European market, backed by their ability to

position their product lines strategically to meet customers’ needs.

Product Family Attributes and Business Impact

Product Value

As a specialist supplier of polyamides, thermoplastic copolymers, and polyesters to the

European flexible packaging market, DSM has created a product portfolio that is highly

compatible for food, pharmaceutical, and industrial packaging. This product line comprises

the company’s proprietary products, Akulon® (PA6, PA66, XS resins used extensively for

film extrusion purposes in food,medical and industrial product packaging). Barrier film

developers use DSM’s Akulon in cost-effective packaging applications (e.g., retort



packaging for ready-to-eat products and packaging for fresh food). Poor shelf life caused

by environmental factors such as temperature, moisture, and air pressure as well as low-

quality food packaging is the primary reason behind the wastage of packed substances. To

avoid this situation, brands are compelled to invest in improving the existing food

preservation methods, translating into reduced return on investment (ROI) for film

manufacturing companies. To help customers overcome the aforementioned challenges

and add value to flexible packaging, DSM has introduced its exclusive Akulon 6, 66, and

XS (introduced in 2014) product variants.

Features and Functionality

Fresh food and retort convenient products require high barrier properties against

moisture, oxygen and temperature. Moreover ready to eat products and food products

that are packed in microwaveable packaging, require high resistance towards temperature

and moisture. It is pretty vivid from DSM’s Akulon product range that the company

understood this need thoroughly. For instance, Akulon 6 offers high-range processing

(high temperature resistance & high viscosity extrusion grade), superior mechanical

attributes, viscosity, low gel count, and ability to preserve moisture. With customer focus

on retaining shelf life of the product and a single film catering to multiple types of

products, DSM’s products are well suited for both fresh and processed food and prevent

them from discoloration and spoilage, thereby enabling a prolonged shelf life.

In addition, Akulon 6 offers better features with respect to higher temperature resistance

and mechanical strength as compared to polyamide copolymers such as PA6/66. Because

of these attributes, the former is growing in applications such as retort convenient

packages that can survive high temperatures and mechanical pressures. However, the

processing challenge of PA6 in blown film is hindering film converters to capture the value

in this growing demand markt segment.

In comparison, Akulon XS is a revolutionary product due to its special chemical and

morphological structure and has combined the film property advantage of PA6 and the film

processing advantage of PA6/66 copolymers.. By using Akulon XS, barrier film

manufacturers have been able to design multi- and mono-layered film structures that are

co-extruded. No other traditional PA6 resin can offer customers a viable solution that

addresses the slow productivity issues caused either by the drop in processing speed or

expensive production process. Barrier films produced from Akulon XS also proved to be

more robust and provided better stretchable properties than traditional polyamides in the

market without compromising on the aesthetics.

In the past year, DSM has delivered products by addressing the contemporary needs of its

customers and is focused on doubling the shelf life of food through innovative packaging

solutions in the future.



Reliability and Quality

Driven by its commitment to offer technologically advanced polyamides to barrier film

producers in the Global market, DSM strongly relies on its extensive research and

development (R&D) capabilities to develop sustainable products. DSM’s leadership position

can be best understood through its success in the constant development of proprietary

technology platforms that equip its scientists with the unique ability to understand the

crystallization kinetics of polyamides. Slow crystallization enabled by Akulon XS

establishes the company’s expertise in producing both mono- and multi-layered co-

extruded barrier film structures that were earlier impossible to achieve without either

slowing down the normal processing speed or mixing PA6 with expensive polyamides or

copolymers. Using this material, customers can create smart, breathable packaging

systems that intelligently control the presence of moisture, oxygen, and carbon dioxide

within a container.

Operational Value

To ensure its products effectively address customers’ changing needs, DSM has

implemented 2 different internal tools: the value calculation model and the lifecycle

analysis tool. The company developed the value calculation model by working closely with

film convertors to understand the product’s performance value, whereas the lifecycle

analysis tool evaluates the barrier film’s sustainability in terms of its effectiveness in

reducing food wastage.

DSM realizes there is a gap between film convertors and brands in terms of their

respective requirements from the materials used in barrier film production. For instance,

according to DSM’s findings, brands are solely concerned about efficient packaging,

whereas film convertors are always looking for resins that would help bring down

production costs, while enhancing their value in terms of sustainability. In this context,

Apart from meeting customers’ demands most comprehensively, backed by the semi-

crystalline structure and slower crystallization speed, Akulon XS guarantees better

mechanical strength as well as durability than traditional barrier films. As a result, film

convertors are able to bring down the production cost by almost 10%.

Price/Performance Value

DSM strongly emphasizes on enhancing the performance of its offerings, while still

launching them at a competitive price. For instance, the slow crystallization rate of Akulon

XS assures customers with a ready-made solution that helps keep the barrier film’s rate of

productivity high by eliminating the need to create customized recipes, where amorphous

polyamides or polyamide copolymers are mixed with traditional PA6 resins. The instant

usability of Akulon XS is attracting polyolefin manufacturers to become a part of the

growing landscape of barrier film production. Despite their specialization in the production

of polyethylene/polypropylene (PE/PP) films, these companies have been limited, in terms



of technological resourcefulness, in penetrating the European polyamide barrier film

market. With DSM’s polyamides, the production process becomes simplified, without

customers needing to create an expensive barrier film manufacturing expertise.

DSM is also playing an active role in enabling film convertors to produce 12 micron

biaxially oriented polyamide (BOPA) films instead of the traditional 15 micron. Even

though 12 micron polyesters are standard in the current scenario, existing film convertors

lack the efficiency to produce 12 micron BOPA films without compromising on the film’s

mechanical strength and barrier properties. Capitalizing on the higher stretchability of

Akulon XS, DSM can offer film convertors a viable solution that can be used to produce 12

micron BOPAwith sufficient mechanical and barrier properties without losing efficiency.

In addition, DSM is working closely with its food packaging customers/companies, with a

focus to improve the barrier and breathability propertyof packaging. This improvement will

bring solutions to increase the shelf life of food items, or keep the freshness of packaged

items preserved for a longer time.

Customer Ownership Experience

DSM believes in working closely with its customers and sharing with them its extensive

knowledge about material crystallization in different temperature ranges, so customers

can easily configure their machineries to produce best-in-class barrier films. Unlike its

competitors, DSM follows a traditional approach of directly interacting with customers to

demonstrate differentiation and the value that customers will receive by opting for its

products, in terms of procedural simplicity. In addition, DSM ensures that the cost of using

its offerings is affordable, unlike its competitors where customers are required to make

significant additional investments. Moreover, because the market is mature, DSM insists

on an annual product feedback satisfaction rating, through which the company constantly

improves its performance.

Brand Equity

Customers generally prefer DSM’s products over competition on the basis of performance

and also because the company is considered to be a consistent innovator in this industry.

For instance, the Akulon product line has become synonymous with barrier films and has

been instrumental in elevating DSM’s brand presence in the European region. In addition

to offering barrier film products, DSM also provides its customers with customized advice

and technical solutions through its advisory team to help their end customers improve

productivity and save costs.

Pursuing its aim to widen its geographical footprint in the European polyamide barrier film

market, DSM has entered into strategic collaborations with various scientific organizations

and academic groups. For instance, DSM collaborates with the research team at Delft

University of Technology to get insights on ways to improvise the functional properties

(moisture, gas retention) of barrier films. With Europe’s stringent food regulatory



standards and consumer awareness emphasizing on environmental friendliness, DSM has

built its perception among customers as a sustainable provider of high quality and certified

barrier films for the food industry.

DSM also frequently showcases its new products in prominent flexible packaging

symposiums and expos like AIMCAL, Interpack, and Pack Expo in Europe which not only

creates awareness, but also elevates its visibility among key industry groups, leading to

greater acceptance of its products throughout the regional markets of Europe.

Conclusion

DSM’s proprietary product Akulon and its variants are aimed at matching a wide range of

polyamide barrier film manufacturing needs, from superior barrier properties to

recyclability solutions. Akulon XS has received wide acceptance among barrier film

producers because of the revolutionary Akulon technology. With its special chemical and

morphological structure and Akulon XS features the film property advantage of PA6 and

the film processing advantage of PA6/66 copolymers.

Based on its extensive study of crystallization kinetics and morphology of polyamides,

DSM has successfully created the Akulon XS resin that helps barrier film developers

overcome the traditional problem of slow productivity or high-cost production.

With its strong overall performance, DSM has earned Frost & Sullivan’s 2016 Product Line

Strategy Award.



Significance of Product Leadership Ultimately, growth in any organization depends upon customers purchasing from your

company, and then making the decision to return time and again. A comprehensive

product line, filled with high-quality, value-driven options, is the key to building an

engaged customer base. To achieve and maintain product excellence, an organization

must strive to be best-in-class in three key areas: understanding demand, nurturing the

brand, and differentiating from the competition.

Understanding Product Leadership

Demand forecasting, branding, and differentiation all play a critical role in finding growth

opportunities for your product line. This three-fold focus, however, must be complemented

by an equally rigorous focus on pursuing those opportunities to a best-in-class standard.

Customer communications, customer feedback, pricing, and competitor actions must all be

managed and monitored for ongoing success. If an organization can successfully parlay

product excellence into positive business impact, increased market share will inevitably

follow over time.



Key Benchmarking Criteria

For the Product Leadership Award, Frost & Sullivan analysts independently evaluated two

key factors—Product Family Attributes and Business Impact—according to the criteria

identified below.

Product Family Attributes

Criterion 1: Match to Needs

Criterion 2: Reliability and Quality

Criterion 3: Product/Service Value

Criterion 4: Positioning

Criterion 5: Design

Business Impact

Criterion 1: Financial Performance

Criterion 2: Customer Acquisition

Criterion 3: Operational Efficiency

Criterion 4: Growth Potential

Criterion 5: Human Capital

Best Practice Award Analysis for DSM

Decision Support Scorecard

To support its evaluation of best practices across multiple business performance

categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool

allows our research and consulting teams to objectively analyze performance, according to

the key benchmarking criteria listed in the previous section, and to assign ratings on that

basis. The tool follows a 10-point scale that allows for nuances in performance evaluation;

ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by Product Family Attributes and Business

Impact (i.e., the overarching categories for all 10 benchmarking criteria; the definitions

for each criteria are provided beneath the scorecard). The research team confirms the

veracity of this weighted scorecard through sensitivity analysis, which confirms that small

changes to the ratings for a specific criterion do not lead to a significant change in the

overall relative rankings of the companies.



The results of this analysis are shown below. To remain unbiased and to protect the

interests of all organizations reviewed, we have chosen to refer to the other key players

as Competitor 2 and Competitor 3.

DECISION SUPPORTSCORECARDFOR PRODUCT LINE STRATEGY LEADERSHIP AWARD

Measurement of 1–10 (1 = poor; 10 = excellent)

Product Line Strategy

Product Line

Strength

Customer

Impact Average Rating

DSM 9.2 9.2 9.2

Competitor2 8.5 8.7 8.6

Competitor3 8.0 8.2 8.1

Product Family Attributes

Criterion 1: Match to Needs

Requirement: Customer needs directly influence and inspire the design and positioning of

the product family

Criterion 2: Reliability and Quality

Requirement: Products consistently meet or exceed customer expectations for

performance and length of service

Criterion 3: Product/Service Value

Requirement: Products or services offer the best value for the price, compared to similar

offerings in the market

Criterion 4: Positioning

Requirement: Products or services unique, unmet need that competitors cannot easily

replicate or replace

Criterion 5: Design

Requirement: The product features an innovative design, enhancing both visual appeal

and ease of use

Business Impact

Criterion 1: Financial Performance

Requirement: Strong overall financial performance in terms of revenues, revenue growth,

operating margin and other key financial metrics

Criterion 2: Customer Acquisition

Requirement: Product strength enables acquisition of new customers, even as it enhances

retention of current customers



Criterion 3: Operational Efficiency

Requirement: Staff is able to perform assigned tasks productively, quickly, and to a high

quality standard

Criterion 4: Growth Potential

Requirements: Product quality strengthens brand, reinforces customer loyalty and

enhances growth potential

Criterion 5: Human Capital

Requirement: Company culture is characterized by a strong commitment to product

quality and customer impact, which in turn enhances employee morale and retention

Decision Support Matrix

Once all companies have been evaluated according to the Decision Support Scorecard,

analysts can then position the candidates on the matrix shown below, enabling them to

visualize which companies are truly breakthrough and which ones are not yet operating at

best-in-class levels.

DECISION SUPPORTMATRIX FOR PRODUCT LEADERSHIP AWARD

High

Low

Low High

Cu

sto

mer I

mp

act

Product Line Strength

DSM

Competitor2

Competitor3



The Intersection between 360-Degree Research and Best

Practices Awards

Research Methodology

Frost & Sullivan’s 360-degree research

methodology represents the analytical

rigor of our research process. It offers a

360-degree-view of industry challenges,

trends, and issues by integrating all 7 of

Frost & Sullivan's research methodologies.

Too often, companies make important

growth decisions based on a narrow

understanding of their environment,

leading to errors of both omission and

commission. Successful growth strategies

are founded on a thorough understanding

of market, technical, economic, financial,

customer, best practices, and demographic

analyses. The integration of these research

disciplines into the 360-degreeresearch

methodology provides an evaluation

platform for benchmarking industry

players and for identifying those performing at best-in-class levels.

360-DEGREE RESEARCH: SEEING ORDER IN

THE CHAOS



Best Practices Recognition: 10 Steps to Researching,

Identifying, and Recognizing Best Practices

Frost & Sullivan Awards follow a 10-step process to evaluate award candidates and assess

their fit with select best practice criteria. The reputation and integrity of the Awards are

based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify award recipient candidates from around the globe

Conduct in-depth industry research

Identify emerging sectors Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

Interview thought leaders and industry practitioners

Assess candidates’ fit with best-practice criteria

Rank all candidates

Matrix positioning all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

Confirm best-practice criteria Examine eligibility of all

candidates Identify any information gaps

Detailed profiles of all ranked candidates

4

Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

Brainstorm ranking options Invite multiple perspectives

on candidates’ performance Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5

Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

Share findings Strengthen cases for

candidate eligibility Prioritize candidates

Refined list of prioritized award candidates

6

Conduct global industry review

Build consensus on award candidates’ eligibility

Hold global team meeting to review all candidates

Pressure-test fit with criteria Confirm inclusion of all

eligible candidates

Final list of eligible award candidates, representing success stories worldwide

7 Perform quality check

Develop official award consideration materials

Perform final performance benchmarking activities

Write nominations Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8

Reconnect with panel of industry experts

Finalize the selection of the best-practice award recipient

Review analysis with panel Build consensus Select winner

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform award recipient of award recognition

Present award to the CEO Inspire the organization for

continued success Celebrate the recipient’s

performance

Announcement of award and plan for how recipient can use the award to enhance the brand

10 Take strategic action

Upon licensing, company may share award news with stakeholders and customers

Coordinate media outreach Design a marketing plan Assess award’s role in future

strategic planning

Widespread awareness of recipient’s award status among investors, media personnel, and employees



About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth

and achieve best in class positions in growth, innovation and leadership. The company's

Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined

research and best practice models to drive the generation, evaluation and implementation

of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in

partnering with Global 1000 companies, emerging businesses and the investment

community from 31 offices on six continents. To join our Growth Partnership, please visit

http://www.frost.com.

http://www.frost.com/

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