For “Retail Ready Packaging: Research and Analysis,” a recent report from PMMI, The Association for Packaging and Processing Technologies, researchers conducted lengthy interviews with an assortment of brand owners, machinery manufacturers and retailers to learn what’s behind growth in the market for retail-ready packaging (RRP).
Retail-Ready Packaging Hits the Shelves and the CPGs
Driving the expansion are retailers, particularly large-box stores and supermarkets, whose influence stems from sales volume, the PMMI study reports. That’s particularly true in developing markets, such as Asia and Africa. Both saw significant rates of growth in 2012, although they’re not the largest RRP markets. (That distinction goes to Europe, followed by North America.)
“Urbanization, population and economic growth are significant drivers for RRP,” says Paula Feldman, director of business intelligence at PMMI, “Especially when they are accompanied by an increase in the number of supermarkets and large box stores. RRP enhances shelf appeal and supply chain efficiency, so retailers often see it as a must-have, and use their considerable leverage with manufacturers to make it happen. As they adjust their packaging requirements, manufacturers must continue to innovate to stay competitive.”
Consumer packaged good companies (CPGs) interviewed generally expressed willingness invest in specialized packaging machinery for RRP — if it would mean reduced costs in the long run — but also preferred limiting investments to components that simplify and streamline particular points on the manufacturing line. Considerations of lifetime cost, labor costs, flexibility and reliability all weigh heavily on their purchase decisions for RRP equipment, as does knowing that packaging requirements are apt to differ between one retailer and another, and between an individual retailer and the market at large.
Although the conundrum can put manufacturers in the position of absorbing equipment costs, 79 percent of interviewees said they’re confident these investments will grow.
Material preferences for RRP were mixed among respondents. While most favored rigid formats for durability and appearance, 67 percent reported they would opt for flexible materials for cost savings.
Regardless of which direction a brand owner takes, Pack Expo International 2014 (Nov. 2–5; McCormick Place, Chicago) will be North America’s leading resource for packaging and processing solutions this year. The 2014 event will feature the return of The Brand Zone, dedicated exclusively to material and container innovations — including materials and formats for high-impact RRP. The pavilion, located in McCormick Place’s Upper North hall, will showcase a broad range of substrates such as paperboard, rigid and flexible plastics; glass and metal packaging, and printing and ink solutions.