Retail-Ready Packaging Popular but Producers Hold Back Investment
In the July 31 issue, Packaging Strategies took a look at retail-ready packaging. Here is a version of it.
A new study states the demand for retail-ready packaging (RRP) is on the rise, driven in large part by big box store requirements. However, the research indicates consumer packaged goods (CPG) companies are somewhat reluctant to invest in equipment to manufacture it.
Also known as shelf-ready packaging, RRP is the preparation of a product in a merchandised unit that can be placed on a store shelf or even set up in its own stand-
In a report, PMMI, the Association for Packaging and Processing Technologies, said the strongest RRP presence is in Europe, where the $24.7bn market is expected to grow about 1.3% annually. The second-largest is North America, a $5.5bn market, which should see growth of 1.0%-1.5%. The highest growth rates are expected in Asia (5.5%), Africa (4.6%) and South America (3.7%).
“Urbanization, population and economic growth are significant drivers for RRP,” said Paula Feldman, director, business intelligence at PMMI, “Especially when they are accompanied by an increase in the number of stores.”
Big box stores are behind much of the growth, the study said, because RRP gives them enhanced flexibility, speed, and lower labor costs. As many as 90% of retailers responding to the survey said they expect productivity gains to increase over the next five years.
Some of the advantages of retail-ready, or shelf-ready, packaging are time saved in shelf stocking and more colorful displays. This is especially important for products in flexible packaging, such as stand-up pouches, that may need some support so that they can be shown to their full potential.
The PMMI study noted CPG producers are investing in new capital equipment to meet increased demands but at a comparatively slow pace. Only 42% of relevant respondents said they have already purchased new machinery for RRP. This reflects concerns about labor costs, sustainability programs and smaller case counts. Still, 79% said they likely will purchase new equipment as the result of RRP demand.
