Trends Driving Today’s Packaging Industry Keith Schafer, Nordson Corporation June 23, 2011.

Trends Driving Today’s Packaging Industry

Keith Schafer, Nordson CorporationJune 23, 2011

22009 Executive Leadership Conference 2 2

Who is PMMI?

• North American packaging supply chain association

• Member Profile– 500 general members

– 69 processing, supplier & materials members


PACK EXPO Trade Shows

• Discover innovation across the line

• Help attendees– Strengthen brands– Improve cost, production

efficiencies– Achieve sustainability goals

• Allied partners add value


Industry Resource


• Alliance for Innovation and Operational Excellence

• Mission: Unite CPGs and suppliers to establish

best practices for critical manufacturing issues

• GMA is charter partner

• Multiple solution groups–Product Safety Solutions Group (PSSG)–Sustainability Solutions Group (SSG)–Operational Reliability Solutions Group (ORSG)–Workforce Development Solutions Group (WDSG)

New Industry Alliance


Presentation Overview

• Vision 2015: End-users, OEMs expect gains

• Trends and advances in food packaging

• Beverage market forecast

• A preview of PACK EXPO Las Vegas 2011


Vision 2015: Economic Outlook

• “Cautiously optimistic” outlook for economy– Slow but positive growth in next 12-18 months– Specific niche opportunities for new products and packaging to

drive growth rates

• Increases in spending by CPG’s due to several factors– Economic stability in developed countries– Continued economic growth in developing countries– Improvement in consumer spending– Benefits from tax and other public policies that support increased

business spending


Vision 2015: Economic Impacts

• Project must produce high and short-term returns with minimal risk

• Capital funds increasingly being directed toward process and operational improvements

• Strong emphasis on lean strategies– Using automation to reduce labor costs across operations– Leveraging sustainability strategies to reduce costs– Applying Six Sigma disciplines to measure and improve

performance– Emphasizing OEE metrics

• Decrease in incremental innovation that produces marginal results


Vision 2015: The Upside

• End-users will continue to implement strategies to build customer loyalty and market share

• Consumers still seeking innovation due to desire for convenience, value and safety

• Consumers increasingly “thinking green”

• Compliance with new government policies will spur investment in packaging machinery and innovative materials

• Large retailers continuing to push for packaging innovation


Market Spotlight: Food



• Three primary drivers shaping today’s food industry

– The Economy• Consumers more thoughtful about spending and saving more

– The Consumer• Convenience continues to drive demands

• Counting on food processors to reduce waste

– The Retailer• Creating choice for consumers with premium store brands

• Initiating packaging material reduction

• Retail Ready Packaging (RPP) trend

Source: PMMI’s Trends & Advances in Food Packaging 2010



• These drivers are, in turn, directly impacting today’s packaging trends

– Sustainability

– Labeling and food safety


Sustainability

• Sustainability efforts spanning multiple packaging stages

Primary Package-Material reduction-Right-sizing the package-Reducing web width and cut off to minimize waste-Using new bio-film materials for better shelf life and barrier protection-Lightweighting glass/plastic-Using water based inks to aid recyclability

Secondary Package-Increase use of recycled corrugate-Material reductions; gapped flats-Specialty glues to add corrugate strength-Moving away from bleached corrugate

Transport Package-Better pallet configuration-Recycling pallets-Cube utilization -Source materials closer to production & distribution



Sustainability



Sustainability

• Materials being tested or considered for food packaging– PLA (polyactic acid)– Regresa® oxo-biodegradable polyethylene films– NatureFlex™ films

– Surlyn®– IntegraGuard™ Eco-Wise



Labeling & Food Safety

• Foodborne illness is a significant public health burden that is largely preventable– 48 million people (1 in 6 Americans) get sick each year

– 128,000 people are hospitalized each year

– 3,000 people die each year

• Food Safety Modernization Act (FSMA)– Gives FDA new prevention-focused tools and clear regulatory

framework

– Enhances FDA’s ability to oversee food imports

Source: Centers for Disease Control and Prevention


A Closer Look at FSMA

• The law can be divided into five key areas– Preventative controls

• Mandatory preventative controls for food facilities

• Mandatory produce safety standards

• Authority to prevent intentional contamination

– Inspection and Compliance• Mandated inspection frequency

• Records access

• Testing by accredited laboratories



– Imported Food Safety• Importer accountability

• Third-party certification

• Certification for high risk foods

• Voluntary qualified importer program

• Authority to deny entry

– Enhanced Partnerships• State and local capacity building

• Foreign capacity building

• Reliance on inspections by other agencies



– Response• Mandatory recall

• Expanded administrative detention

• Suspension of registration

• Enhanced product tracing abilities

• Additional recordkeeping for high risk foods


FSMA and Recallswww.fda.gov/Safety/Recalls



• FDA proposing nutrition labeling guidelines

• Nutrition Keys, a new voluntary front-of-pack nutrition labeling system– Developed by the food and

beverage industry in collaboration with GMA and FMI

– Helps busy consumers make informed decisions while they shop

– Clear, easy to read format displays calories, saturated fat, sodium and sugar per serving



• Types of new equipment needed as FDA mandated food traceability and food safety changes are implemented– Date coding equipment

– Labeling equipment

– Metal detectors

– Barcode printers

– Testing equipment for salmonella and bacteria

– Barcode scanning equipment

– Scrubbers/cleaners

– RFID, if it’s required




• Wide range of industry resources for help and guidance– New web resource: FDA Basics for Industry

(www.fda.gov/FDABasicsforIndustry)

• Basic information about regulatory process, frequently requested information

– Produce Safety Alliance

• Funded by the FDA and USDA and housed at Cornell University

• Provides produce growers and packagers with essential, on-farm food safety knowledge

• Helps prepare for proposed rules from FDA in 2011 on safe production, harvesting and packing of produce


Trends to Watch

• Name brand vs. store brand (Own Brand)

• Healthier lifestyles

• Foods of the future

• Continued testing of nanotechnology



Trends to Watch

• Next Generation of Machinery– Enhance operating efficiency

– Changeover with the push of a button

– Lower energy consumption

– Decreased waste

– Reduction in labor

• Increased integration of processing and packaging functions– Streamlines operations

– Increases productivity

– Reduces waste

– Decreases costs



Market Spotlight: Beverage


Key Beverage Trends

• Eye-catching single-serve packaging

• Cost-effective “green” packaging

• Flexible packaging machinery to support latest container technologies

• Minimization of secondary packaging to cut costs, reduce overall carbon footprint

Source: PMMI’s Beverage Industry Market Research Study (2010)

282009 Executive Leadership Conference 28 28Source: PMMI’s Beverage Industry Market Research Study (2010)




Your Resource for Packaging and Processing Innovation


PACK EXPO Las Vegas 2011

• Largest North American packaging and processing event in 2011

• New in 2011– The Pharmaceutical Pavilion– The Processing Zone– The Confectionery Pavilion– Project 2020: The Consumer

Experience


PACK EXPO Las Vegas 2011

• New customer-centric approach– Puts attendee at center of focus

– Launching initiative with three industries

• Pharmaceutical• Confection• Bakery/Snack

– Networking Lounges• Rx Lounge• Candy Bar• Baking/Snack Break


Partnerships: Education


Added Value Partnerships


THANK YOU!

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Trends Driving Today’s Packaging Industry Keith Schafer, Nordson Corporation June 23, 2011.

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