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FLEXO Magazine : January 2014
INDUSTRY INDICATORS Forecasts & Foresight Pair of Reports Analyzes Market Conditions, Emerging Tech There is a famous saying that to understand the present, we must look at the past. Two recent Canadean studies do just that, taking a look at 2012-2013 and compiling the responses of companies throughout the global packaging industry. In Global Packaging Survey 2012–2013: Market Trends, Buy- er Spend and Procurement Strategies in the Global Packaging Industry, Canadean “analyzes how global packaging industry companies’ procurement expenditure, business strategies, and practices are set to change. ” Drawing from global packaging industry executives, the report offers a snapshot of spending outlooks, budgets, supplier selection criteria, business chal- lenges and investment opportunities of leading purchase decision makers in the global packaging industry. MARKET TRENDS “Executives from the global packaging industry expect in- creased levels of consolidation, with 55 percent of respondents anticipating that there will be either a ‘significant increase’ or an ‘increase’ in merger and acquisition activities,” Canadean notes. Specifically, companies are looking to small, specialized businesses to supplement existing operations, lower costs and strengthen their ability to battle competitors. Other reasons for increased consolidation include: • New cost or demand pressures • Repayment of debts • The potential need to meet new compliance procedures or gain quick access to new markets • Business expansion • Attempts to increase market share On the buyer side, 65 percent of respondents rated raw material prices as the No. 1 business concern, followed by 57 percent for responding to pricing pressure and 45 percent for cost containment. Among suppliers, market uncertainty claimed 59 percent and raw material prices took 52 percent. The average annual procurement budget for packaging in- dustry buyers is forecasted at $120 million. In North America, the average is nearly $100 million higher, at $219.7 million. When selecting a supplier, the three most important factors that buyers are looking for are: quality, service and price; the three least important factors are: environmental record, customer service representative reputation and proximity of supplier operations. Two factors—price and a supplier’s record for speed—are considered “underestimated” by suppliers; a supplier’s brand reputation, knowledge of the buyer’s market and innovation are said to be overrated. Both sides agreed on the impor- tance of quality. INCOMING TECHNOLOGY With technology improving at an increasingly fast rate and new abilities and automation offerings hitting the market on a constant basis, Canadean’s Global Packaging Survey 2012–2013: New Consumer Technology Solutions - Impact, Op- portunities & Budgets looks at how new technology affects the packaging industry. Specifically, it examines how technolog- ical advances can impact individual aspects of a company ’s operations, such as budgetary allocation and tradeoffs from new innovations. The report found three primary factors responsible for driving adoption of new technology: • Consumer Convenience • Lower Costs • Safety & Traceability Throughout the packaging industry, 59 percent of respon- dents identified research and development as the No. 1 area to generate demand for new technology in packaging pro- duction. This was followed by printing and in process quality control. Canadean found the top three technology oriented packaging types to be attractive packaging, inexpensive packaging and moisture controlled packaging. Among both buyers and suppliers, the high cost of raw ma- terials and the complexity in recognizing the right technology were said to be the leading barriers in the implementation of new technology. Looking to emerging technology and potential demand growth, 56 percent of respondents expected an increase in RFID smart labels, followed by 48 percent for labels with smart tags and 41 percent for barcode labels. For more information and to purchase either Global Packaging Survey 2012–2013: Market Trends, Buyer Spend and Procurement Strategies in the Global Packaging Indus- try or Global Packaging Survey 2012–2013: New Consumer Technology Solutions - Impact, Opportunities & Budgets, visit Canadean’s website at www.canadean.com. n SUPPLIER SELECTION • Most Important - Quality - Level of Service - Price • Least Important - Environmental Record - CSR Reputation - Proximity of Supplier Operations 12 FLEXO JANUARY 2014 www.flexography.org PRESSING ISSUES