Flexible packaging continues to be a solution to societal challenges like food waste and changing consumer lifestyles, and 2017 looks to be another big year. Our panel of suppliers, manufacturers and converters reflected on 2016 and provided us with their thoughts on 2017 and beyond for flexible packaging.

Jaime Manon-Macias
Market Segment Manager – Flexible Packaging
BASF Corporation

Charles Murray
President, North American Inks
Sun Chemical

Giancarlo Caimmi
Corporate Commercial Director

Curt Begle
President, Engineered Materials Division
Berry Plastics Corp.

Flexible packaging continues to be a solution to societal challenges like food waste and changing consumer lifestyles, and 2017 looks to be another big year. Our panel of suppliers, manufacturers and converters reflected on 2016 and provided us with their thoughts on 2017 and beyond for flexible packaging.

Flexible Packaging: Briefly recap 2016 both for your company and for the flexible packaging industry. Did it live up to your original expectations? How is 2017 forecasting?

Manon-Macias: The flexible packaging market in 2016 experienced growth in many market sub-segments, such as plastic carrier bags, baked goods packaging, meat, fish and poultry packaging, shrink sleeves for bottles, microwaveable and retort packaging. BASF is growing in this market space through innovation and new product launches, delivering value-added alternatives to the market place. We expect 2017 will start with growing optimism of increased economic growth, where the printing market for packaging is estimated to experience growth in 2017 with emphasis in the flexible packaging and functional coatings packaging segments.

Begle: The shift of consumer preferences toward flexible plastic packaging continues to gain momentum. As such, we were pleased with the performance of these related product lines in 2016. The volume growth we achieved exceeded our internal plan. Fortunately, our recent technology investments and strategic planning enabled us to effectively respond to the increased demands of our customers. We expect similar growth rates in 2017 driven by manufacturing and marketing lighter gauge and more environmentally friendly packaging products.

Murray: Certain sectors of the flexible packaging industry had growth that met expectations in 2016, particularly in the areas for fresh fruits, health bars, precut salads and other similar health-focused products. Other markets didn’t live up to expectations in 2016, such as soft drinks bottles, cereal and snack foods. Consumer behavior certainly was a key driver for areas that were a bit lackluster. 2017 likely won’t be significantly different from 2016.

Caimmi: 2016 goes on record as a very positive year for us, both on a global scale and specifically in North America. Our corporate growth for the year exceeded targets and so did the Northern American market. It is evidence of the state of the industry. Flexible packaging in general is growing, and new technologies with lower energy consumption are replacing obsolete ones. Combining the replacement of existing technologies with the natural tendency of the industry to call for new capacity explains our market growth. We feel the growth by the increasing number of orders. The tendency has fluctuated through the year between machines for short and long runs, but 2016 marked a great year for large investments. More high-performance machines and multi-ply laminators sold than ever before. Some of those orders can be explained by our growth in market share. Nevertheless, the majority is definitely explained by increased capacity-related demand. And increased capacity means mainly two things: Flexible packaging is growing and demand for high-performance flexible packaging is growing. In 2016, we announced a new technology developed in cooperation with Dow Chemical to improve performances in solventless lamination and the market response was unbelievable. This is more evidence of how the market is hungry for real innovation, which essentially turns into a demonstration of our industry being in good health.

In 2017, we will keep raising the bar. There will be no specific challenges in 2017 if not for the global political instability. We know flexible packaging is, within certain limits, a counter-cyclical market, but the political situation may eventually strongly influence the growth of our industry.

Flexible Packaging: About every forecast for the flexible packaging industry is overwhelmingly positive. How do you assess the current market as it stands today? How do you think it will change – if at all – over the next year?

Caimmi: As I noted previously, high-performance packaging demand is a trend. This is a significant development for North America. More and more high-productivity equipment and multi-ply coater-laminators are delivered to the area. Surprisingly, as confirmed by the FPA Annual Report for the past few years, the North American flexible packaging market is in a trade deficit. Our understanding is that a significant part of the business is now coming back home thanks to the determination in investing in resources and know-how.

Murray: Some flexible packaging markets did better than others in 2016, and we expect that 2017 will not be very different, but now that the election is over, our new president hopes to do things that will drive growth in the commerce. It will be interesting to see the impact. Mergers and acquisitions played a key role in 2016, and we should see that continuing in 2017 among both converters and their supply base. Oil and feedstock costs are creeping up again and will likely put pressure on costs over the course of the year.

Begle: We are excited about the future for flexible packaging. Our diverse portfolio of products allows us to prioritize our efforts and investments toward ever-changing consumer preferences. The benefits of flexible packaging have created opportunities for sustainable growth. The fresh food market, as well as high-end categories such as protein supplements and wine, have increased the need for more sophisticated flexible packages. Our material science efforts enable us to address and secure those opportunities.

Manon-Macias: The flexible packaging market is segmented by performance level, and we expect the industry will continue to convert to more sustainable options, such as water-based printing on film and foil to address lower VOC emissions and carbon footprint for production. Three main drivers continue to stand out in the flexible packaging market: cost, compliance/sustainability and performance. BASF keeps these drivers in mind as we bring new products to the marketplace.

Flexible Packaging: Despite positivity, no industry is without its challenges. What are some of the biggest challenges this industry currently faces? How do you think those challenges will change throughout 2017?

Manon-Macias: The overall packaging industry is turning into a more market-focused industry; however, some stakeholders throughout the value chain are not ready yet to adopt new and more sustainable technologies to meet the dynamic market needs coming from the end-use consumers. Innovation is key for this purpose, and BASF continues to offer quality and excellence in customer service along with high-performance technologies, such as new developments in the Joncryl FLX series, to enable conversion from solvent-based to more sustainable water-based inks for flexible packaging.

Caimmi: Flexible packaging is a relatively small industry with limited lobbying leverage. The industry was the target of bad press for decades because of a misperceived negative environmental impact. Flexible packaging is the solution, not the problem. With food waste being well above 50 percent of the urban solid waste in developed countries, the solution is to limit it not only through education, but by means of technology through the use of packaging that improves shelf life and product protection, while reducing overall costs and volume of solid waste. It seems easy to perceive, but not to many media outlets that like to play on easy headlines for their general audience. To win against this kind of mindset remains the main challenge for our industry.

Murray: One key challenge the industry is facing is the growth in online shopping, especially for non-emotional purchases, those same products that we always buy every single month. Many people are now only going to the store for specialized items. There are two main purposes of a package: protection and display. Since people are increasingly not going to the store, purchase decisions are not emotionally impacted by the packaging on a shelf. This lifestyle choice will continue to grow in 2017 and could affect the growth of many retail stores.

Begle: Despite many favorable macro-trends, the flexible packaging industry will remain influenced by overall economic activity, consumers’ willingness and ability to spend and regulations concerning plastic. The industry will remain challenged with managing the relationship between cost and performance. We are well-positioned to deliver value and improve the end-user experience for 2017 and beyond.

Flexible Packaging: Are there any factors outside of the packaging industry that you foresee as possible roadblocks to the continued ascent of flexible packaging?

Murray: One possible roadblock for the ascent of flexible packaging is public perception. We see public outcries for the banning of plastic shopping bags or other flexible packaging when they don’t understand the realities. We expect environmental pressures for recycling to continue to grow, but the reality is that there is significant collaboration of all partners in the supply chain – convertors, ink suppliers, CPGs, brand owners, printers, etc. – to produce environmentally friendly packaging, even if it costs a little more to do so. The industry is doing a lot of work to educate the public that flexible packaging is environmentally sound.

Begle: Outside of an unlikely macroeconomic shock, I do not foresee any roadblocks to the continued growth in the flexible packaging industry.

Manon-Macias: Despite the optimism of increased economic growth in 2017, there is a lot of uncertainty in North America due to the new political environment in the region. The Consumer Confidence Index has increased considerably in November and December after the election, which brought optimism for the economy, jobs and income prospects, as well as for stock prices. However, looking ahead to 2017, consumers’ continued optimism will depend on whether or not their expectations are realized.

Flexible Packaging: Flexible packaging materials recovery/recycling and sustainability continue to generate lots of conversation in the industry. How do you see this playing out in 2017 and beyond? Does your company have any specific offerings or initiatives in this regard?

Caimmi: The flexible packaging industry is in perfect harmony with the needs of our society, therefore, even if flexible packaging is the solution in energy saving and emissions reduction, the industry is continuously involved in improving performances. We see this firsthand as a machinery manufacturer. Things like exposure to innovative substrates is our daily business. We are facing continuously new films developed with targets such as recycling and waste-volume reduction. We are involved mainly in the web handling side of the business. As the industry leader in web handling, we are taking care of coating and lamination of the thinnest webs and the most innovative ones. Our contribution is in fact to make the innovation in the industry develop faster. Our entire product line then is designed to reduce energy consumption and emissions, making our products the reference point for the industry.

Manon-Macias: With sustainability as one of our core values, BASF has spent a considerable amount of resources on developing solvent-free printing technology platforms to replace existing solvent-based technology, starting as far back as 2005. The key platforms providing the necessary balance between bond strength and resolubility are our self-crosslinking acrylic emulsion technology and our PU dispersion technology. In 2016, BASF launched Joncryl FLX 5220, which is a polyurethane-acrylic hybrid dispersion for flexible packaging that reaches the highest performance level by combining the best of polyurethane and styrene-acrylic dispersions.

Begle: Our team monitors developments in the areas of sustainability and recycling daily. We have built strong partnerships with our suppliers, customers and industry associates to stay abreast of the most up-to-date information and to provide improvement opportunities in a proactive manner. We focus heavily in material science research and state-of-the-art manufacturing equipment to reduce waste in our processes and our products. Recently, we introduced a non-laminated, standup pouch from the Entour line of packaging products. This new pouch solution offers the functionality and performance of traditional laminated pouches without the need for dissimilar materials, making it recyclable and more competitive in price.

Murray: Sun Chemical spends an enormous amount of money on research and development, and a large percentage of that investment is focused on renewability and sustainability. We have many ink ranges that use sustainable/renewable raw materials and utilize many resources of an organic nature. In fact, our 2015 Sustainability Report released in April 2016 highlights multiple examples of ways that suppliers are contributing to Sun Chemical’s environmental footprint. The report shows how Sun Chemical’s balanced scorecard approach is used to evaluate our suppliers’ environmental performance, helping to ensure that suppliers remain vigilant in developing new technology that reduces the overall environmental footprint of their products. While these sustainable/renewable inks are not suitable at present for every application, Sun Chemical will continue to allocate resources to grow in these areas.

Flexible Packaging: Is there anything else that you’d like to share about your company or flexible packaging in general?

Manon-Macias: “Convenience” has been identified as a big driver as well due to demographics, population growth and change of lifestyles demanding an increased shelf life for food packages and overall different technologies and sizes. Additionally, flexible packaging provides advantages in packaging design (very attractive at point-of-sale and ease-of-use performance), transportation and handling (protection of the product) and sustainability (biodegradable, compostable, renewable and recyclable options to address lower cost packaging, lighter weight and a lower carbon footprint for production).

Caimmi: We presented the industry with a new technology in solventless lamination in cooperation with Dow Chemical. Converters using this new technology are now able to convert laminated webs on a slitter in 90 minutes or less. It does not require the use of a mixer, and pouches can be delivered to brand owners in a day or so with significantly faster time-to-market as well as cost reductions and energy savings. We had no idea of the market response, and upon its unveiling at Drupa we knew it was significant. What is this example teaching? Basically that flexible packaging is interested in real innovation. And real innovation is exactly what makes an industry come alive. 

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