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FLEXO Magazine : January 2010
16 FLEXO JANUARY 2010 www.flexography.org • Folding cartons and corrugated segments will be most affected by reductions in packaging materials and sizes of the packages. • It is possible for some food and tobacco-related packaging to move to black-and-white as a result of new regulations. • Because of the high energy costs involved, it is en- tirely possible that there will be a shift in substrates, with paper replacing plastics in some arenas. • Efficiency will play a huge role in future successes. Converters with the best processes, best equipment, best-trained employees and best supplier network will win out. Green, Government & Growth PRIMIR Packaging Study Identifies Global Mega Trends Sustainability, government regulations and high energy costs are three of the 20 trends affecting the North American packaging industry, according to a soon-to- be-released PRIMIR study, Global Trends in Packaging Affect- ing North American Converter & Supplier Markets. As with all industry segments, packaging has been im- pacted by the economy during the past year. Printed packag- ing 2008 shipments were estimated at $79.7 billion, according to the study. But, in 2009, the picture changed. "Some markets are horrific, some just very bad," commented Dave Costa of State Street Consultants, who conducted the research. The PRIMIR study goes on to provide the market estimates to 2013 broken down by the four packaging segments studied (corrugated, flexible, tags and labels, and folding cartons). Little growth is anticipated for corrugated with shipments in 2013, estimated to be $26.5 billion. This is up from $25.8 billion in 2008. Folding cartons also shows minimal growth during the period, only climbing to $11.58 billion from 2008's $10.9 bil- lion. In contrast, flexible packaging and tags and labels show moderate growth in the years ahead. Flexible packaging, with industry shipments totaling $28 billion in 2008, is estimated to grow to $31.1 billion by 2013. Tags and labels, with shipments of $15 billion in 2008 are expected to grow the most to $17.5 billion in 2013. Although factors differ in impact among the four segments studied, just six of the 20 trends identified will have the great- est impact---sustainability, government regulations, high energy costs, retailer involvement, global economics, and offshore manufacturing. We discuss three of these factors in this article. PACKAGING TO THE RESCUE Sustainability represents the most talked about trend underway. Retailers, with Wal-Mart leading the charge, are touting a "save mother earth" philosophy. And, by the way, let's make money, cut costs and increase profits at the same time. Retailers' emphasis on reducing packaging is planned through a number of initiatives. • A reduced product-to-package ratio strives for packaging inside of the box being reduced, thus allowing for packages with smaller footprints. • The increased use of recycled content in packaging. • Cube utilization such as the use of trays and shrinkwrap- ping around larger quantity products like bottled water and canned goods. • Packaging material sustainability. Folding cartons and corrugated segments will be most af- fected by reductions in packaging materials and sizes of the packages. For example, the move from full-boxes to plastic wrapped trays will reduce the amount of corrugated used. On the other hand, flexible packaging will move to thinner substrates (providing a bright spot for press manufacturers as newer presses are better suited to handle these materials). Finally, label use will be negatively impacted as rigid contain- ers convert to flexible packaging. UNCLE SAM'S INFLUENCE Government regulations are expected to take center stage as the new administration looks at potential new legisla- tion. Pending is the Employee Free Choice Act, which would amend the National Labor Relations Act to make it easier for employees to form unions. Many experts are concerned that this legislation will drive more product manufacturing outside of the United States. If that were to occur, it would likely be harder for U.S. converters to compete with the pricing of offshore packaging sources. Sustainability-related regulations also may have a direct influence on packaging in the years to come. Regulating greenhouse emissions (Cap and Trade) is of concern to converters as no one knows what this will cost and how it will affect manufacturing operations. Also unknown is how recy- cling will impact substrates. Will the cost of recycling balance the yields obtained? As the FDA gains greater power, the organization is ex- pected to extend the use of warnings on tobacco packaging. These warnings would be much larger---so large that it could mean fewer graphics and changing printing requirements. The PRIMIR study implies that it is possible for some food and tobacco-related packaging to move to black-and-white as a result of these new regulations. The packaging industry is also impacted by the drive toward a greater emphasis on food safety. The ability to track and trace ingredients is desired and packaging/labeling will play a big role in this effort. In general, labeling will become more varied as the government requires more and more informa- tion displayed regarding food ingredients. Sodium content, for example, will be the focus of much attention, resulting in new designs, more components and more print work to change label contents. INDUSTRY INDICATORS
Sustainable EOY 2009