A Look Back and Ahead: The Flexible Packaging Landscape
Dean M. Enslein
American Packaging Corporation
Seldom before in history has an industry in its infancy faced such trials and tribulations as the flexible packaging industry, especially in the past 15 years.
The flexible packaging industry has weathered economic hardships and crashes; large-scale attacks on our country; wars; global political changes; environmental concerns for sustainable products; raw materials spikes; city- and country-wide bans on plastic bags; industry-changing mergers & acquisitions; and business-altering regulations and new laws, to name a few.
And yet, through all of this, flexible packaging went from being a foreign concept to a consumer household mainstay. And not only that, the industry has been highly successful, and continues to grow, increasing sales and breaking into new markets each year.
When asked if the amount of growth the industry saw was anticipated, despite all of the economic, political and worldwide setbacks businesses have had to deal with in recent years, Dean Enslein, director of business development for Bemis Shield Pack LLC, was strong in his response: “Absolutely. When you look at flexible packaging, it is the most economical way to package, preserve and distribute consumable, drug and other products that require extended shelf life.”
Peter Schottland, president/CEO of American Packaging Corporation, also had a firm reaction to anticipating the growth of the industry. “Yes, while we serve several diverse markets, our primary businesses are in the food and medical segments that are largely immune to a recession,” Schottland says.
Fredy Steng, director of new business, flexible packaging division, at Berry Plastics Corporation has a similar opinion: “After 53 years in the business, I guess I should have a few opinions about an industry that has been very good to me. The flexible packaging industry will continue to grow at a steady pace; primarily, so much of our product offering is consumed by the food and beverage industry. Regardless of worldwide economic and political situations, people still need to eat and drink.”
The Best of the Industry
The flexible packaging industry has exploded into new markets each year. The rate of growth can be pin-pointed to one innovation: the standup pouch. We all know this ubitquitous package helped propel the industry to new levels, but what else were some industry-changing products that helped with success?
“There is a continuous flow of new technologies and products into the flexible packaging arena. Today, the “value-added” flexible packaging segment alone is $21 billion and growing. Fitment pouches allow the transition of many products from rigid containers into flexible packages, which provides improved convenience and reduced environmental impact. These products include baby food, beverages and detergents. This technology will result in increased conversion from rigid packaging to flexible packaging. Reclose technology integrated into packages contributes to this industry-changing momentum. Consumers have embraced the value of this technology, and are driving increased demand for more options by CPG companies,” says Schottland.
Enslein confirms the standup pouch innovation as king. “I believe standup pouch formats will expand significantly in numerous consumables markets since the next generation has no bias against this style of package.”
“In Central and South America supermarkets today, we observe soups, wines, drinks, purees, ketchup, and mayo in stand up pouches. I also expect to see dramatic growth in both retort and aseptic packaging,” Enslein says.
Steng pinpoints the industry’s hot spots: “The fastest growing products in our industry are standup pouches and reusable/resealable bags and pouches, both of which are rapidly displacing paperboard packaging.”
Business-wide and Industry-wide Challenges
Every businessperson has their fair share of pretty significant challenges, as does every industry. FP asked our panel of gurus what the biggest challenge was for their company, and what they see as the biggest challenge for the industry is overall.
Enslein believes that business moves at a much faster pace. “The speed of business today creates new challenges. When I started with Bemis, there was no voicemail or computers. You wrote your new orders on carbon paper and mailed them in along with the graphics. You would be on the phone at 11:00 pm, taking calls in regards to business. The dramatic expansion of technology has changed the way that we do business and continues to challenge our processes to keep up with those changes.”
Enslein continues, “The biggest industry challenge is the balancing of the continued desire by suppliers and customers to develop and invest in next generation packaging, with the pressure of today’s economic pressures and corporate mandates to reduce costs.”
“The biggest hurdle is often getting converters and packagers to tell their story!” says Stansbury. “They are so protective of their manufacturing contract partners; they have to find a way. For the industry, keeping up with the latest technologies and automation pathways is a constant challenge.”
For Steng, the company’s challenge is a common one. “The continuing challenge for our company is to stay abreast of and implement new technology for our customers and continue to invest in state-or-the-art equipment and processes.”
Steng believes innovation is a challenge that the industry must continue to tackle. “The biggest challenge of the flexible packaging industry is to continue to develop products that are user-friendly to the ultimate consumer of the package, i.e., shelf life stability; easy open/close features, and do so at costs that are competitive with other forms of packaging.”
Schottland’s challenge is a bittersweet one: “The biggest challenge for our company is keeping up with our rapid growth. Our company is evolving rapidly; we have grown from $100 million to approximately $400 million in sales in the past 12 years organically. This requires significant change, progressive thinking and aggressive capital investment.”
Schottland continues, “As I see it, the biggest challenge the industry has is changing the image of flexible packaging with consumers through education on sustainability. The flexible packaging industry must continue to proactively look for better ways to communicate the benefits and develop improved structures, printing methods and display options as compared to other packaging mediums.”
Why are we in business if not for achievements and successes? Our respondents are proud of what they and their companies have achieved, which has taken years to cultivate.
Steng says, “In my opinion, the biggest success for my company has been to develop a position of leadership in the flexible packaging industry by doing so with a combination of product innovation, product quality and customer service.”
Stansbury’s success has been a one-woman show for years. “Building my client list and then founding the Converters Expo, which features flexible packaging, has been truly rewarding. I recently sold it to BNP Media and they will take it to another level.”
Schottland is proud of his privately-held company’s achievements. “Our year-over-year success is attributed to the company’s philosophy: Best people, great equipment, excellent technology and low overhead. Because we are privately held, we can make decisions that best serve our customers, our employees and our suppliers to keep the company healthy. American Packaging has a very lean organization and has invested nearly $200 million in new equipment in last 15 years in order to deliver quality packaging at a competitive price.”
Enslein’s successes are shown through the company’s products. “There have been numerous successes for Bemis, including the development of cook-in films for the protein markets, standup pouches, printed multi-packs (for bottled water/sports drinks, etc.), easy open/reclosable packaging, anti-fog, I.C.E. forming films and hot fill liquid packaging. Numerous individuals at Bemis played roles in the successes of these innovative technologies.”
Future Business for Flexible Packaging
Enslein’s response to the future of our industry will be centered on a globalization of products. Enslein expands, “I believe as world economies modernize and the demand for food safety heightens around the world, we will see an increased need for upscale products and extended shelf life. The flexible packaging industry will benefit significantly from these trends.
“It’s a global market, and the question is how do we distribute food around the globe in an economical, safe environment while preserving product safety, quality and extend shelf life. If you travel to second and third world countries, you see a lot of retort and aseptic packaging, as the distribution system can only handle these products from a shelf life stand point. With cost of energy increasing annually, I expect to see the expansion of these packaging styles in North America along with a reduction in frozen food packaging,” says Enslein.
Steng sees very strong future growth, “The future of our industry will liken our ability to continue to be as innovative as we have been in the past 50 years, thus allowing us to continue to be the dominant method of packaging available across all segments of industry.”
Schottland knows that the North American market still holds a lot of promise for flexible packaging. “In Europe, 50+ percent of consumer products are in flexible packaging; however in North America, it is only approximately 20 percent. The growth potential is phenomenal for the flexible industry. The biggest promise for flexible packaging is the cost advantage over all other packaging mediums. We also have the advantages of being able to innovate and improve the offerings available in the flexible packaging arena,” says Schottland.
Stansbury believes it’s in our continued strengths: “Delivering seamless solutions from production through packaging,” she says.
An industry, we’re now everywhere, and we’re not going anywhere…