In recent weeks, we at PMMI have been looking rather intently at the economy, our industry and our customers’ industries, and how business is doing. I’d like to share some of what we’ve learned about the state of our economy and the relationships between machinery manufacturers (OEMs) and their customers.

According to PMMI’s second quarter economic outlook, economic growth is continuing. That said, it’s likely to be a bit slower recovery through the first half of this year. Later in the year, and into 2012, we expect the pace to pick up again. We’re anticipating 2.1% growth in 2011, and 4.5% in 2012.

Among the areas we study are food and food-preparation production and beverages, coffee and tea production. The food and foods preparation production outlook index points to positive, although slower growth (3.0%) this year. Moving into the next two years, we expect 2.1% growth in 2012, and 2.5% in 2013. The beverages, coffee and tea production index appears to be heading for 1.8% growth in 2011, 2.4% in 2012, and 5.5% in 2013.

Price is lower priority

Even with less capital available, consumer packaged goods companies CPGs tell PMMI the most important factor in their decision-making process for machinery is not purchase price. Rather, their first concern is the machine’s design and performance attributes (e.g., flexibility), followed by the supplier’s clear understanding of the project specifications and requirements, and post installation-service support and training.

In many cases, the way to reach the desired level of flexibility is for end users and OEMs to work together in the research and development processes. To facilitate these arrangements, some end users are working with a limited number of OEM partners-a group to which they can turn to generate the flexible solutions needed. These are the OEMs with whom they have relationships-connections that build and are built on trust, institutional knowledge and credibility. These relationships are the ones that manage risk and lead to breakthrough innovations.

The approach seems to be working. As CPGs struggle to do more with fewer resources and greater complexity, they’re telling PMMI they are re-developing their relationships with OEMs across projects, starting with research and development. And both parties agree: These working relationships are producing better solutions and greater innovation with less risk.

This fall, Pack Expo Las Vegas (Sept. 24–26, Las Vegas Convention Center) will bring together more than 1,200 exhibitors for three days of breakthroughs, innovations and solutions that support the entire supply chain. It’s the most comprehensive processing and packaging event in North America this year, and will also attract about 25,000 attendees. When it comes to building the relationships your company needs for solutions down the line, this is the place to be. For more information, visit Packexpo.com. F&BP

Charles D. Yuksa is president and CEO of PMMI