Threatened beauty contest on the shelf
Packaging: Streamlined product lines and excess capacity are causing serious problems for the packaging industry. Now the industry is hoping for a rebound in demand.
Packaging Adjusted product ranges and overcapacity are causing the packaging industry a lot of trouble. Now it is hoping to catch up. "The human mind is designed in such a way that it is more fascinated by appearances than reality." This is the opinion of none other than packaging expert Martin Amann, former Future Brand CEO and owner of the design agency Amann & Partner since the beginning of the year. His "successful step" into self-employment reflects the development of an increasingly globalized industry, which has reacted violently to the decline in consumption, both internationally and nationally, especially in the design sector. Many agency branches came under enormous pressure to save money due to reduced or canceled orders and were forced to centralize across national borders. Increasingly, packaging design was developed at the Group's headquarters, just as advertising was. Under the growing pressure to succeed, the developers were often guided by the fear of appearing more daring than the competition, especially when launching new products. In doing so, however, they served the uniformity on the shelves. This is despite the fact that the appearance of a product or brand has a significant influence on customer acceptance.
Only adaptations remained for the design agencies and their branches. This trend was overshadowed by the strong concentration in the most important client sectors of pharmaceuticals, food and confectionery. As a result, major international corporations gained a position that allowed them to reduce the number of suppliers and soon to request Internet tenders - specialized online purchasing platforms. The competitive pressure among manufacturers of traditional print products became correspondingly more aggressive. Their overcapacity combined with price pressure often led directly to insolvency.
"During the crisis, controllers have been given the power over the appearance of packaging," jokes Amann about the situation after years of streamlining, rationalization, centralization and uniformization. However, the fact that the cheapest route can ultimately result in a relatively expensive development is often discovered too late.
The emergency brake, according to Amann, seems to be gradually being released and giving way to a counter-trend. Marco Miani, Head of Training and Communication at the Swiss Packaging Institute (SVI), is also rather optimistic. Although the SVI has only been keeping industry market statistics since 2002, which is why no comparisons can yet be made, he says: "I am receiving clear signals from the market that the packaging industry is expecting a slight upturn in business. However, it is impossible to say who will benefit from the recovery and how quickly."
Consumption figures come from our neighboring country to the north. Each consumer there spends the equivalent of around 150 francs on packaging every year. The restrained growth in consumption has hardly affected the value, as it has been partly offset by socio-demographic trends and changes in consumer behavior: more single and very small family households and tight time budgets mean more and more convenience products. The industry is therefore expecting at least a stable trend. At present, Pierre Barth, Head of Marketing and Sales at Limmatdruck/Zeiler, sees hardly any positive signals coming from Europe's former economic engine, Germany. "Consumer sentiment in the eurozone is generally still subdued to unstable," he says. "Only innovations that add value can bring the hoped-for upturn to domestic companies," says Barth. As an example, he cites the company Emmi, which manages to export 25 percent of its output to the EU market despite higher raw material prices.
Following this example, Limmatdruck/Zeiler - number two among Swiss packaging manufacturers - has expanded its workforce and thus its expertise in the core business of packaging development despite the tight budget. It has entrusted selected partner companies with the physical production.
Booming beverage marketThe SIG Group, based in Neuhausen am Rheinfall, sees its strategic focus confirmed. The 151-year-old company recently disposed of companies outside its core business in order to concentrate on the promising beverage sector. "In fact, the growing beverage market is the main driver of SIG's growth," says Matthias Knill, Head of Corporate Communications at SIG. People around the world consumed 600 billion liters of beverages last year, and consumption is growing by six percent annually. The market for aseptic beverage cartons is growing by three to four percent annually.
"In certain markets, SIG can even grow beyond this figure thanks to new products." The curve has been even steeper at SIG Combibloc, which has grown by over ten percent in recent years. "This trend will continue in the future," Knill is convinced. As consumers are looking for more user-friendly closures and product-friendly solutions, more and more innovations can be expected here too.
The absolute perennial favorite, according to Franco Miani, is convenience. There is unlikely to be a revolution here. But now that the high expectations of quality and convenience have been met, packers seem to be focusing more on the variety and diversity of product packaging. In future, it will also be a question of offering something special and sensual to meet the growing expectations of spoiled consumers. This trend is particularly visible with premium products, for which more packaging is now fully accepted again.
Beacon of hope for the packaging industry: at least the beverage market is growing.
Luca Aloisi
Only adaptations remained for the design agencies and their branches. This trend was overshadowed by the strong concentration in the most important client sectors of pharmaceuticals, food and confectionery. As a result, major international corporations gained a position that allowed them to reduce the number of suppliers and soon to request Internet tenders - specialized online purchasing platforms. The competitive pressure among manufacturers of traditional print products became correspondingly more aggressive. Their overcapacity combined with price pressure often led directly to insolvency.
"During the crisis, controllers have been given the power over the appearance of packaging," jokes Amann about the situation after years of streamlining, rationalization, centralization and uniformization. However, the fact that the cheapest route can ultimately result in a relatively expensive development is often discovered too late.
The emergency brake, according to Amann, seems to be gradually being released and giving way to a counter-trend. Marco Miani, Head of Training and Communication at the Swiss Packaging Institute (SVI), is also rather optimistic. Although the SVI has only been keeping industry market statistics since 2002, which is why no comparisons can yet be made, he says: "I am receiving clear signals from the market that the packaging industry is expecting a slight upturn in business. However, it is impossible to say who will benefit from the recovery and how quickly."
Consumption figures come from our neighboring country to the north. Each consumer there spends the equivalent of around 150 francs on packaging every year. The restrained growth in consumption has hardly affected the value, as it has been partly offset by socio-demographic trends and changes in consumer behavior: more single and very small family households and tight time budgets mean more and more convenience products. The industry is therefore expecting at least a stable trend. At present, Pierre Barth, Head of Marketing and Sales at Limmatdruck/Zeiler, sees hardly any positive signals coming from Europe's former economic engine, Germany. "Consumer sentiment in the eurozone is generally still subdued to unstable," he says. "Only innovations that add value can bring the hoped-for upturn to domestic companies," says Barth. As an example, he cites the company Emmi, which manages to export 25 percent of its output to the EU market despite higher raw material prices.
Following this example, Limmatdruck/Zeiler - number two among Swiss packaging manufacturers - has expanded its workforce and thus its expertise in the core business of packaging development despite the tight budget. It has entrusted selected partner companies with the physical production.
Booming beverage marketThe SIG Group, based in Neuhausen am Rheinfall, sees its strategic focus confirmed. The 151-year-old company recently disposed of companies outside its core business in order to concentrate on the promising beverage sector. "In fact, the growing beverage market is the main driver of SIG's growth," says Matthias Knill, Head of Corporate Communications at SIG. People around the world consumed 600 billion liters of beverages last year, and consumption is growing by six percent annually. The market for aseptic beverage cartons is growing by three to four percent annually.
"In certain markets, SIG can even grow beyond this figure thanks to new products." The curve has been even steeper at SIG Combibloc, which has grown by over ten percent in recent years. "This trend will continue in the future," Knill is convinced. As consumers are looking for more user-friendly closures and product-friendly solutions, more and more innovations can be expected here too.
The absolute perennial favorite, according to Franco Miani, is convenience. There is unlikely to be a revolution here. But now that the high expectations of quality and convenience have been met, packers seem to be focusing more on the variety and diversity of product packaging. In future, it will also be a question of offering something special and sensual to meet the growing expectations of spoiled consumers. This trend is particularly visible with premium products, for which more packaging is now fully accepted again.
Beacon of hope for the packaging industry: at least the beverage market is growing.
Luca Aloisi
