Randy Scott, Vice President of Global Marketing, Pliant: There are always multiple drivers, but the groundswell of interest in developing packaging options which incorporate material savings and light-weighting continue to be the predominant focus over the last couple of years. The continued high raw material and energy costs and growing consumer awareness of the environmental impact of packaging is the area that Pliant has been most focused on.

Michael Brandmeier, Vice President and General Manager, Torayfan Division, Toray Plastics (America), Inc.: At Toray Plastics (America), Inc., our experience demonstrates, without exception, that it is the brand owner’s passion for innovation that inspires and drives flexible packaging advancements. The end user is clearly in the best position to bring cutting edge technologies to market because it is in the business of developing and improving consumer goods, and in this case we’re referring to food products, making them satisfying, nutritious, fun, longer lasting, and less expensive. End users are the ones that understand and sometimes even anticipate the desires of the consumer. Ultimately it is end users that can rally raw material film suppliers, converters and equipment producers to motivate them to create a change for the better.

An important concern for the end user is product freshness and shelf life. If it wants to extend the shelf life of a product, it may seek a flexible package with high barrier performance and help drive that innovation to a new level. If the end user’s business is seasonal, a longer shelf life allows them to pre-build inventory to better manage peak seasonality in their product portfolios. At Toray we have seen this be an important driver in the development of our high barrier clear and metallized films.

Another end user might be driven to replace foil in a structure with a metallized film in order to achieve better barrier performance at a lower cost. In the transition, it gains the added benefit of improved aesthetic appeal on the store shelf because the new structure is extremely resilient and resists becoming shopworn when handled. Toray has participated in several such transitions in the last several years, all driven by the end user’s desire to eliminate foil from their packages.

In a third example, an end user might be driven to replace a cold seal structure with an advanced thinner heat sealable structure that creates a better finished package barrier at a lower total system cost. We developed a film in 2007 specifically to address this need at a key end user account that commercialized the new structure just last year.

In a fourth example, the end user is charged with finding an alternative to metal cans and replaces them with retortable flexible pouches. The switch yields a lighter package that can lower transportation costs significantly. A flexible innovation also helps create a food product with better taste because the product can be retorted at a lower temperature. The consumer experiences greater convenience, too.

In each of those cases it is the end user that is in the best position to drive technology forward. Through the end user’s push for constant improvements of their product portfolios, the film suppliers, the converters, and the equipment manufacturers are driven to deliver new and innovative solutions to meet their needs.

Uli Unterriker, Director of Sales & Marketing, Americas, The Hudson-Sharp Machine Co.: Our main inspiration for innovations is to help our customers stay competitive in the global marketplace by developing and supplying equipment with increased throughput and efficiency, automation and machine flexibility.

From a marketplace perspective, our customers confront us with exciting opportunities that evolve around:

•Product developments to allow conversion from glass, paper, rigid plastic and corrugated packaging to flexible packaging

•Reclosable packaging which addresses consumer demand for convenience

•Great examples and a continuing success story are innovative solutions such as Inno-Lok and Pour & Lok reclosable packaging solutions for both bag making and pouch making machinery.

Ian Hole, vice president, market development, EskoArtwork: While the brand owner is looking for smarter, environmentally friendly, easy-to-use packaging, the converter is driving innovation to drive cost-effectiveness, design changes to satisfy shorter runs, and production efficiencies.

Thus, from the converter, the motivation is to reduce the number of discrete production steps. For example, EskoArtwork created Visualizer to eliminate unnecessary mock-ups; the Esko Digital Flexo Suite optimizes the workflow in the plate room; and the CDI platesetter’s UV Inline main exposure unit eliminates a flexo plate step. Innovation will also appear around quicker and better sleeve technology and quicker color matching technology on press-even globally, where packaging has to match here or anywhere.

John Norder, Business Manager, Packaging and Industrial Adhesives, Rohm & Haas: I believe it’s a combination of the consumer’s desire for convenience and the consumer product companies’ quest for packaging innovation without increasing costs. This drives not only package development and design at the converter level, but also drives their need for higher productivity and efficiencies throughout their process.

Converters benefit from thinner gauge films, films with more functionality, fewer layers or processes, faster line speeds for printing, lamination and slitting, and more robust adhesives and inks.

Richard Pettifor, President, Sun Chemical North American Packaging: Innovation in today’s flexible packaging industry springs out of developments and investments from throughout the packaging value chain. Of course, consumers are often at the head of innovation, as the industry works to keep up with the neverending demand for greater convenience. Improving productivity is another key factor behind new technologies. Press manufacturers, for example, continuously look to build faster presses which lead to innovation throughout the production process. Most recently, the growing focus on sustainability is a key source of innovation, as new packaging materials and structures are created and developed that have lesser impacts on the environment.

David Taylor, President, Radius Solutions: In my view, the primary inspiration for innovation for flexible packaging manufacturers comes from consumers’ wants and needs. The two common factors I see are usually convenience and price. The convenience issue is typically addressed by working with equipment suppliers or in-house engineering to design and develop not only packaging products that fit consumers ever changing lifestyles, but equipment that can produce the items efficiently with a high level of quality.

Pricing issues can inspire change as well. The development of linear-low and metallocene resins are examples of new materials that got a boost in interest because they allowed manufacturers to provide a better product for a lower price. In the past, flexible packaging manufacturers were accustomed to price fluctuation of raw materials, especially resins and films. There were always adjustments, but the price of materials was always a reasonable percentage of the total cost of the manufactured items.

In the past few years, the prices for raw materials have inched upward without an equalized correction. This means that manufacturers have had to find better, more efficient ways to produce an item as well as finding ways to monitor and control the cost of the process. I believe without exception, any firm that has an interest in staying competitive, has invested in better and more advanced equipment, i.e., co-extruders, high-speed gearless printing presses, faster converting machinery, etc.

Another change that has become more prevalent in the past few years as a result of rising cost and overseas competition is the use of industry specific software. The method of predicting, documenting and evaluating costs throughout the process has evolved from inscribing information and pouring over paperwork, to spreadsheets, then in-house designed programs. Many companies are now realizing how helpful it can be to look outside their own organizations for solutions that have been developed with input from other comparable organizations. They also find it can be helpful to be on a platform that is continually enhanced and maintained for them.

John Q. Baumann, President and CEO, Ampac Flexibles: Although creativity and innovation come from all areas, it is competition for the consumer’s purchasing power that is the ultimate driver. Innovative packaging that drives consumer sales is the ultimate goal.

Lisa S. DiGate, Global Business Director, DuPont Packaging Graphics: At DuPont Packaging Graphics, our inspiration is always to create solutions that support our customers and help to advance flexography. Our global sales and technical organizations are constantly in touch with customers worldwide to understand what is affecting their business and how DuPont innovation can provide solutions.

We’re seeing growth in conversion from rigid to flexible packaging. We’re seeing consumer package goods companies and retailers requiring more and more complex graphics to capture consumer attention, demanding faster speed to shelf and demonstrating a growing interest in sustainability. At the same time, we see that everyone is dealing with rapidly rising costs for raw materials, warehousing and transportation, all of which are affected by the continuing increases in crude oil prices.

Jim Ciolino, President, Kiefel Inc.: I believe the sustainable initiative being pushed by the big box stores and the CPG’s will be the biggest driving force behind flexible packaging now and in the future.

Consumers as well will be pushing this issues which in turn will lead to more and more innovations in packaging design be it through materials that are either renewable or by using less of it.

Rick Ruenzel, Director of Business Development, Midwest, Comexi: What we are really dealing with is the fundamental relationship of customer and supplier - throughout the entire supply chain. The reality and perception by the supplier of what a customer wants - and needs - is the basic building block of innovation. A well-managed company, attuned to the realities and demands of the market, will develop new approaches, products and technologies to gain a competitive edge over the competition. In the final analysis, it comes down to, “what is the customer asking for?” Innovation is what separates one supplier from another.

Wal-Mart’s Sustainable Packaging initiative is well underway, and the Wal-Mart Packaging Scorecard’s deadline is Feb. 1, 2008. If a supplier’s data is not inputted and on-file by that date, that company may not be eligible to be considered a Wal-Mart supplier. Have Wal-Mart’s actions had a positive impact on the flexible packaging industry so far, and do you expect it to affect the industry in the coming years?

Scott: The short-term impact has been to create considerable confusion and consternation for many companies that supply directly or indirectly to Wal-Mart. This will become less of an issue as companies begin to understand that there are many paths to improving its packaging scorecard. In addition, most of the retailer trade seems to be adopting its own approach to managing the packaging that flows through the supply chain which reinforces the position that sustainability is not a short-term public relations approach.

Unterriker: Continued focus on sustainability is likely to grow over the coming years. Recent reports have indicated the flexible packaging industry is slowly incorporating the sustainability requirements while continuing to face the challenges of higher packaging costs and equal product quality for sustainable packaging manufacturing. The effect we’ve seen on the flexible packaging machinery market is the request for modifications to machinery to address the needs of biodegradable film. This is not new to Hudson-Sharp. We’ve demonstrated the capability of our different machines in this area most recently at global trade shows and will continue to do so in the future.

Hudson-Sharp continues to help converters overcome the challenges of making bags from biodegradable film, while recognizing the current biodegradable film technology is still changing.

Hole: To some degree, Wal-Mart is likely using sustainability to differentiate itself to compete in a commodity business, as well as to ‘protect the world’-a noble deed, even with ambitious time frames. It makes people look more seriously at the carbon footprints they leave behind.

Unfortunately, the brand owner is caught between the retailer, who is planning on green packaging, and the consumer, who does not want to pay extra for it. And, while Wal-Mart is setting one scorecard, another retailer might set a different standard. Expect an organized coalition of buyers to oversee a standard in a few years. Frankly, the effort will either be driven by industry...or ultimately by government. Industry would rather do it themselves.

Pettifor: Wal-Mart’s initiative has keenly focused attention on the environmental impact of packaging. It has also accelerated the timeline for new product development efforts that support package reduction and the use of materials with greater compostable and biodegradability attributes. Those are very positive developments for the industry. Wal-Mart’s efforts are reflective of the wider movement toward sustainability, so we expect the trend towards lessening the impact of the environmental footprint of packaging will remain strong over the next several years.

Taylor: Wal-Mart is a driving force in the industry and people will follow their lead. In 2006, Wal-Mart announced plans to measure its 60,000 worldwide suppliers on their ability to develop packaging and conserve natural resources. Wal-Mart expects the project to reduce overall packaging by five percent and save 667,000 metric tons of carbon dioxide from entering the atmosphere. These policies are focused on helping the environment, but they can create a burden on its suppliers as they often tend to expect mandated changes to happen without significant cost to them and within specific deadlines. If you accept that sustainability is a pre-requisite for doing business, then the changes have been positive, as they encourage companies into more proactive business practices than they may otherwise adopt. It also helps separate the more agile companies out from the pack, as they will be the ones able to adopt those changes and benefit from them.

Baumann: Wal-Mart’s sustainable initiative has had a positive effect by accelerating the trend toward, and attention to, sustainable packaging. Packaging suppliers have and will continue to develop more scientific, cost, and material effective structures to meet the sustainable goals of their company, their customers, their communities and the consumers that use their products. Wal-Mart does not change these goals, but their mass does influence the speed at which suppliers invest to attain their goals.

DiGate: Wal-Mart’s actions have certainly created a significant amount of activity in the area of sustainable packaging. People are now asking such basic questions as ‘What does sustainable packaging really mean?’; ‘What are its benefits?’; and ‘What do they need to do to comply with the scorecard requirements?’ And it is having a very positive impact.

Having said that, it’s important that the answers to these questions remain very firmly based in scientific fact and that “green washing” (i.e. deliberately misleading consumers regarding the environmental benefits of a company’s products) be avoided.

Consumers, consumer goods companies and retailers like Wal-Mart will continue to drive interest in sustainability throughout our industry. Suppliers will respond to that according to their ability and knowledge. DuPont, a science company, has been in the forefront of sustainability for almost 20 years and recently established sustainability goals tied directly to business growth, specifically to the development of safer and environmentally improved new products. An excellent example of a sustainable solution for the packaging industry is Cyrel FAST, a platemaking system that uses thermal technology, eliminates the use of solvents, reduces energy consumption and increases productivity for printing graphics.

Ciolino: I think the Wal-Mart sustainability initiative will have an impact on the flexible packaging market simply from the shear size of Wal-Mart and the purchasing power they have. However, I’m not sure it will be as big of an impact as some might think. I think there are a lot of companies out there waiting to see if this initiative is the real thing or more of a PR thing and they are waiting to see if others push in this direction as well. I do think it will have a positive effect on the market as it is making all of us think about what we do, from the raw material supplier to the machinery supplier all the way through to the packaging designer and any this will lead to better and better packaging for all of us.

Ruenzel: At a certain gut level, this is not a question of whether this action is positive or negative but what a supplier needs to do to do business with Wal-Mart. As we live in a big box culture, with an increasing emphasis on environmental awareness, “sustainability” will be a concept endorsed and marketed by companies worldwide. What is open to debate, is what the true significance of “sustainability” is and its long term impact and viability in the marketplace.

Printing continues to be the number one way flexible packaging manufacturers add value to their product, with flexography the leading printing method. The improvements in flexo printing can be tied directly to its increasingly digital aspects, specifically on the prepress side. What additional improvements can be made to flexographic printing, and can it finally take the last step in catching or surpassing rotogravure printing?

Scott: Pliant, as a leading printer in the North American market, is continually focused on improving its ability to provide the best and most cost-effective graphics with the shortest turnaround to its customer base. Digital pre-press and online communication with our customers has been critical to continuing our relevance as a supplier to our customers. We believe that flexography and rotogravure will continue to co-exist as each has its particular strengths relative to the other and we don’t necessarily believe that one will win out over the other any time soon.

Unterriker: The Hudson-Sharp Machine Co. is addressing the future of flexible packaging by staying on the cutting edge of changes in the flexible packaging industry. We constantly monitor the industry and respond to the global flexible packaging market with the most innovative, technically advanced machinery for bags, pouches and reclosable packaging. In addition to our strong position in the wicketer markets, we have developed into the technological leader in other plastic bag/pouch segments including new developments in:

•Inno-Lok reclosable packaging

•Pour & Lok reclosable packaging

•Custom application pouch and bag making machinery

•Side Gusset and SUP Pouch Machines

Hudson-Sharp has also developed unique strategic partnerships with influential world-wide industry suppliers, which help us to stay current with the latest industry news and global flexible packaging trends. This, combined with excellent customer service and support, will continue to differentiate Hudson-Sharp in the marketplace.

Hole: Improvements will all be directed toward fulfilling the needs of the flexo and flexible package industry by being cost effective, faster and more efficient than gravure. While much of prepress is digital, the press and finishing portions of the packaging workflow are still analog...for example, mounting and the positioning of plates.

However, perhaps the comparison should not be flexo vs. gravure, but flexo vs. digital printing. We all know flexo is used for shorter runs and gravure for high volume runs in lower skilled geographic areas, such as Asia. The challenge is between flexo and digital printing, where items such as labels and narrow web flexible packaging are printed. The upshot is that converters need a prepress workflow capable of working among all the different processes. It really adds up to color management, the key to consistent printing, no matter the package and no matter the process.

Gerben B. van Wijk, public relations manager, Drent-Goebel: Although we initially agree with your point that flexo made some immense improvements in print quality in the last couple of years, we personally don’t believe that it will ever surpass rotogravure. Moreover, flexography as a technology and flexo printers have to be aware of the rise of web-offset in flexible packaging. The web-offset press manufacturers have seen their traditional markets decline and now look into flexible packaging (as well as cardboard and label markets) and are gaining a market share for themselves.

This new development also triggered web-offset printers to change their markets and even convinced some pioneering flexo and gravure printers to change to this technology. Roger Miller of Gateway Flexible Packaging even said it in an interview in Flexible Packaging Magazine: “This Changes Everything,” Miller said. “Three times as fast as flexography. Twice as fast as gravure. It sets up in half the time and its print quality is superior as well. It’s web-offset printing, and it may forever change the way flexible packaging is converted.”

I was in the lucky position to visit Roger myself just before Christmas and remains very excited about the technology. They have educated their customers and are seeing the ‘fruits’ of this. Designs are changing to completely benefit from the advantages that the offset process offers; higher quality in half-tones, sharper details in small prints and text, improved vignettes to name a few. The power for point of sales promotions can be much higher than ever achieved in flexo.

So even when flexo press manufacturers can find ways to further improve the technology there are alternatives that might still be better for flexible packaging printers. This comment shouldn’t be taken as just another ‘sales argument’ from a press manufacturer but as an honest warning to printers to not just look at ‘what they already know’ but to also ‘look outside their traditional context’. We have seen that flexo printers willing to take the risk to completely change their business model gain a competitive advantage over their competitors. This is the most important since the flexible packaging market is more and more turning into a price driven market. If you can only offer the same as your competitor does and try to make the difference on price you are a playing a very risky game.

Pettifor: One way that flexographic printing is closing the gap on graphic image quality relative to rotogravure is through the implementation of game-changing technology. WetFlex is the breakthrough wet-on-wet flexographic printing process, patented by Sun Chemical. It is designed, along with the patented UniQure ink system, to meet the needs of the flexible packaging market for the highest level of print fidelity and food product safety, along with the required durability to protect the package integrity and improve printing efficiency. WetFlex is precisely the kind of new technology that is leveling the playing field between flexographic printing and other printing technologies.

Taylor: Flexographic printing has taken large strides in catching up to the quality of rotogravure printing over the last 10 years, however in order to catch or surpass rotogravure there are things that need to take place. For flexo to match or surpass gravure’s ability to print good highlights and deep shadows at the same time, lower volume anilox rolls and higher strength inks are critical. In addition to the press side improvements, there continues to be improvements on the pre-press technology to optimize for the higher strength inks and lower volume anilox rolls. Technologies such as Hybrid Screening, Solid Screening technology (PlateCell Patterning, Groovey Screening), Cell Center Screening for deeper shadows, and the quality and price/performance improvements of the digital platesetters, all are contributing to narrow or eliminate the gap between flexographic printing and rotogravure printing.

Baumann: Flexography has made great strides, making the difference in print quality more difficult to discern. There still remains subtle differences in the cost and ability to achieve the final image as well as in adhesion to certain substrates, especially in stringent high heat and moisture lamination applications. With the size of the printing industry and the continued challenge to balance cost and performance, there will always be a place for both technologies in the printing industry.

DiGate: Some would say that flexography has already caught gravure printing for flexible packaging applications. Digital prepress and digital plates have for the most part have leveled the playing field with gravure, and in some cases - such as fine type and linework - flexo may actually exceed gravure capabilities. When you couple those quality improvements with the rapid change-over and superior economics of flexo, it provides brand owners with numerous opportunities to differentiate themselves and add value to their products via brand extensions, targeted promotions and regionalization. These flexible options do not readily exist in a gravure workflow.

At DuPont however, we still think that flexo print quality can be further improved. We’ve seen improvements in print quality by moving to CyrelFAST plate processing as well as In-The-Round (ITR) imaging. We’re now working to bring those two technologies together to produce a next generation image carrier that raises the flexo quality bar to new levels.

Ruenzel: I think the improvements will be incremental. Gravure will remain the high quality process but flexo - at least in my mind’s eye - can compete in this area and still offers within the flexible packaging industry the benefit of cost, at least for short and medium runs. Bottom line is that plants that have invested in flexo will not be inclined to invest in gravure, or vice versa. But do not sell gravure - and other alternative technologies - short on innovation and capability. Gravure is becoming more cost effective and the prepress costs for 8-10 color flexo have risen, corresponding to the increasing qualitative requirements of the flexographic process.

In recent years, the major issues facing the flexible packaging industry have included raw materials costs, globalization and sustainability. What will be the industry’s major issues during the next year or two?

Scott: As the raw material and downstream customers continue to consolidate, there will be a continued trend in the flexible packaging industry to do the same. Multi-national customers and vendors will continue to focus most of their attention on packaging suppliers who can provide their products and service on a global scale. Sustainability as a mindset to reduce the amount of packaging that ends up in the waste stream is here to stay.

Hole: The packaging world is not changing rapidly. The same issues of raw material costs, globalization and sustainability will still be here two to three years from now. Why? The higher cost of oil will affect the cost of substrates, inks, plates, and other materials. In globalization, many of the tools exist, but most supply chains are not yet structured well enough to take advantage of them. Sustainability will become the most important issue, as individual consumers become more sensitive to global warming. Products that are the most ‘green’ will gain a competitive advantage.

van Wijk: Sustainability and the environment will remain on top of the agenda for the flexible packaging industry and the entire graphic arts industry. ‘Green production’ will be a key-word. This also is a threat to the flexo and gravure printers. The use of solvents is still common in this industry and this might dramatically change in the coming years. A change to UV or EB (well introduced in offset) will be a logical choice.

Norder: Certainly raw material costs will continue to be a major concern as crude prices continue to rise to record levels. This puts pressures on not only packaging materials, (resins, films, inks and adhesives), but also on the energy costs associated with operating converting plants and equipment, as well as freight costs of both incoming and outgoing shipments. We also need to look at the impact of higher oil prices on consumer spending and the overall U.S. economy. Convenience is a luxury most consumers can afford to cut, and many flexible packaged products could feel the pinch.

The globalization issue may become more of an opportunity than a threat to U.S. converters and consumer goods companies, due to the declining value of the dollar which is making U.S. goods less expensive.

Pettifor: We believe those same three issues will continue impact the industry in the next one to two years. Raw material costs continue to rise, and we don’t see an end to that pattern. At Sun Chemical, although we continue to improve our efficiencies and reduce internal costs through the Six Sigma and Lean processes, these measures have not totally compensated for rising raw material and energy costs.

As more consumer packaged good companies (CPGs) move operations to Asia and South America, a growing factor in globalization has become product safety. As a result, CPGs are pushing harder to have only the most reliable partners in their supply chain who can meet their high standards for consumer health and safety and product fitness-for-use. Sun Chemical’s global presence and reputation for reliability, position us well to serve these customers.

As noted earlier, sustainability will continue to be a major issue, driven partly by consumer interest and initiatives by retailers and by greater societal concerns about the environment and global warming. We believe sustainability will create significant business opportunities for flexible packaging printers, as CPGs seek more cost effective, environmentally friendly packaging. Sun Chemical’s WetFlex™ system is a great example of technology that can help flexo printers take a leadership position on sustainability while delivering a higher quality finished product.

Taylor: We believe the industry will continue on its trend of consolidation and price pressures, and that packaging converters will continue to differentiate themselves on service. This will require companies to continue broadening their product offerings through new machine technology and/or acquisitions, so they can be more comprehensive suppliers to their clients. They will also continue to search for ways to gain efficiencies within their organizations so they can remain price competitive. We have seen many companies that are looking for software that can help them gain efficiencies. Many are eliminating old in-house systems and point solutions in favor of scalable fully integrated systems that can tie together data from multiple plants across all of their operations, and consolidate it into a single view of their business performance. This continues to be a big trend as companies search for ways to identify areas where efficiencies can be realized. It is also one that plays in acquisitions, as companies look to have a modern, scalable backbone technology in place, that they can use to run their existing operations, and also easily roll-out across newly acquired facilities.

DiGate: We also believe that these are opportunities for innovators. Retailers and CPG’s will continue to demand high-impact graphics and rapid speed to market while requiring cost savings and environmental sustainability. We at DuPont are investing heavily in advancing digital and thermal technology that we believe will deliver enhanced quality and productivity while reducing the platemaking environmental footprint.

Baumann: Cost, globalization and sustainability will remain challenges for packaging suppliers. The major challenge, or opportunity, is providing innovation and solutions during these times. To remain competitive, brand owners have fewer resources and time to develop solutions internally. Partnerships with packaging suppliers that can innovate and supply without adding cost and complexity will remain key during the next few years.

These three issues will continue to have a major influence in flexible packaging. Increases in crude oil prices will continue to affect raw material costs for the foreseeable future. Advances in technology and telecommunication will make the world a smaller place to do business so it is critical that our industry be competitive in all regions of the world. Consumers, governments, brand owners and retailers will continue to expect more sustainable solutions.

Ciolino: I don’t think they will change all that much as raw material costs will always be the biggest issue the industry faces. Increased globalization will continue and sustainability will also grow. The currency situation will have some effect as well but not to the extent as the others.

Ruenzel: I see the major issue to be one of profitability. This industry has not, in recent memory, been exceedingly profitable. The challenge now is how to compete and grow in an environment that is very competitive and also experiencing increasing raw material, labor and regulatory/legacy costs that cannot be easily absorbed. This plays havoc with a company’s ability to sustain itself and prosper. Concurrent with this is the need for converters to be integrated suppliers and offer a full range of processes and products to their customers. To do this requires a substantial capital investment in people and equipment - and further pressure on a company’s bottom line.