Packaging Outlook 2020: Collaboration, Innovation, Flexibility
Consumer packaged goods manufacturers, retailers and OEMs are finding new growth with partner collaborations.
Last year many companies collaborated on new materials, machinery compatibility and corporate initiatives, and joined recycling groups. It’s time to look forward, get inspired and realize that sometimes it is better to work with a partner or two.
When markets become disrupted by new technologies and competitors, many companies struggle to keep up. They are often not prepared to develop new products and services. Instead of going it alone, some companies are reaching out to partners in order to build a broader ecosystem that will boost their competitive strength.
During the 2019 Vision 2025 focus group program at PACK EXPO Las Vegas last September, PMMI focused on three topic areas for more efficient and productive operations:
- Asset reliability — the pursuit of zero unplanned downtime
- Multifunctional equipment and changeovers — balancing speed, flexibility, reliability
- Begin with the end in mind (writing better RFPs) — setting a path earlier to attain the above points and others
CPGs, OEMs and members from PMMI, the Contract Packaging Association and other stakeholder groups participated, noting the challenges and solutions for each topic. A common theme in many of the solutions to the challenges faced by participants in all three areas is the need for a common process, stakeholder engagement throughout the process, and discipline to see the process through to the end.
Resources including PMMI, Contract Packaging Organization, Cold Press Council, Flexible Packaging Association, Fibre Box Association, Paperboard Packaging Council and others may help you to find solutions for your organization.
This report includes forecasts and analyses of the flexible and rigid plastic, glass, metal, paperboard and corrugated packaging segments and design, as well as packaging machinery and automation for 2020 and the near future. Here, industry experts and influencers share their views on what we can expect for each sector.Keep scrolling past the Packaging Outlook 2020 article menu for Packaging Machinery and Automation.
Packaging Outlook 2020 Articles:
Machine flexibility has become a must-have. With multi-sized products — such as travel size personal care items to household size, and slim line cans to aluminum wine bottles — machines need the flexibility to allow packagers to keep up with consumer demand. With flexibility, however, comes questions of downtime for changeovers along with the possibility of decreased production and efficiency.
Millennials have surpassed baby boomers as the largest generation, with around 73 million millennials in the United States between ages 18 and 34. With millennials in the workplace, both of these generations vary significantly, which also will push demand for new and flexible machinery.
Each year PMMI come out with its State of the Industry Report. Last fall, data showed the value of domestic shipments of machinery rose 6% to $8.7 billion in 2018. Additionally, backlog orders increased by 7.4%.
The largest growth by machinery type was conveying; filling dry, powder and solids; inspecting/detecting and checkweighing; case load, close and seal; and labeling.
For shipments by consumer packaged goods sector, food (including nutraceuticals) and beverages incur the most shipments. Still, pharmaceuticals are expected to grow the fastest between 2018 and 2024 at a CAGR of 4.4%, with beverages close at 4.1%.
The U.S.–China trade war, which are the two largest producers of food and beverage products, has taken a toll on the packaging machinery industry. Global economic performance factors in to packaging machinery demand by region.
Packaging Machinery Trends
The State of the Industry report shares seven trends affecting packaging machinery. They are:
Retailer Pressure: Competition in the food and beverage industries is getting tougher with prices continuing to slip and raw material prices fluctuating. Large retailers are also buying the small and medium-sized retailers, in order to broaden product offerings while maintaining lower cost by competing with non-traditional retailers.
Complete Solutions: End users want to purchase a more complete packaging line — with included functions such as filling and closing, labeling, cartoning and shrink wrapping from a single source.
Modular Machines: There is also a growing trend for more modular machines to be flexible, due to the increased variety of packaging materials and packaging styles along with more SKUs.
Traceability and Serialization: The Food Safety Modernization Act (FSMA) requires businesses to identify the immediate supplier and recipient of the product (other than retailers to consumers). The FDA has recently selected a few companies to participate in a pilot program to create a proof-of-concept blockchain network to enhance security of drugs and the supply chain.
Ecommerce: The continual shift to online purchasing platforms will continue to drive demand for packaging machinery, as there are many differences between retail and ecommerce packaging, including added touchpoints for ecommerce products as well as packaging and supply chain challenges.
Flexible Packaging: The rise of flexible plastic packaging has come at the expense of other packaging styles such as rigid plastics, cartons and bottles. Even with several advantages over rigid containers, throughput rates of rigids are still higher than those of pouches.
Sustainability: The packaging market’s push for sustainability has led to increased use of recycled materials such as recycled corrugated card, recycled high-density polyethylene and recycled polyethylene terephthalate film. Companies are realizing the need for a more circular economy and working on corporate initiatives as well.
North American robot orders inched up in 2019 compared to 2018 by 1.6%, with 29,988 robotic units ordered. Order revenue for 2019 is down 1.3%, closing the year with $1.681 billion. The largest driver of the growth was a 50.5% increase in orders from automotive OEMs and a 16.6% increase from the plastics and rubber industry. Orders including food & consumer goods, life sciences, metals and semiconductor/electronics, contracted by single digits in comparison to last year.
“While 2019 was a challenging year, and the outlook for growth in 2020 is murky, we’re still seeing growing interest in automation technologies and solutions that will lead to continued future growth,” said Jeff Burnstein, A3 & RIA president.
A3 believes that the increase in the use of robotics and other forms of automation is actually helping create and save jobs. For example, other recent research from A3 shows that over the past 22 years, in every period that robot sales went up, unemployment in the U.S. went down. Conversely, when robot sales went down, unemployment went up. And many of these robots are going to filling the more than 2.4 million manufacturing jobs expected to remain unfilled by 2028, according to the study by Deloitte and The Manufacturing Institute.
North American sales of machine vision systems and components contracted 4.6% comparing year to date numbers, to $2.07 billion through September, with machine vision systems seeing a decrease of 2% year over year, at $599.9 million.
Motion control and motors increased, however. Global motion control and motor suppliers have received orders at $2.65 billion through third quarter 2019, an increase of 1.9% compared to the same period in 2018. Shipments also showed growth at $2.92 billion, up 1.5% over the first nine months of 2018.
Top 7 Digital Transformation Trends for 2020
A recent MuleSoft report shares the top seven digital transformation trends shaping 2020.
Connecting the consumer experience.
Organizations need to solve for increasing pressure on IT to open up bandwidth for delivering connected, personalized experiences for their consumers — from customers to partners to employees to developers.
Unlocking and analyzing data is at the heart of digital transformation. Businesses are putting their data to work in order to improve customer experiences, streamline operations and quickly launch new products and services.
Artificial intelligence and machine learning.
Organizations are increasingly investing in AI capabilities to expedite and personalize customer service, reduce human bias and increase productivity. They are learning that the value of AI and machine learning tools are dependent upon the data they are fed.
Most enterprises today run on multi-cloud environments, but managing multiple clouds is complicated, specifically when it comes to moving application workloads between cloud environments. API-led application development and containerization are two potential solutions to this problem.
Partnering with IT to turbocharge the business.
To maximize the full potential of technology, organizations are positioning IT as a core enabler to the business.
Co-creating value with external stakeholders.
The best businesses are creating a network effect by building collaborative ecosystems of partners, customers and external stakeholders.
Fueling business performance with APIs.
Businesses leveraging APIs are experiencing increased productivity, revenue growth, and room for innovation — but they must be productized and easily reusable to deliver full value.
The report goes on to state that brick-and-mortar retail is not dead; it is merely a convergence of the physical and digital worlds. Looking at services from Amazon go, Walmart and Gant, consumers are now able to do more with both. With Amazon go, shoppers can purchase goods in-store without a cashier or checkout; shoppers can use an AR headset and sensor gloves to search Walmart; and Gant offers “Online Store Stock Check,” whereby a customer can get a list of nearby stores where an item is in stock if it is unavailable online.