PackStratSample February282010 : Page 1G Volume 28, No. 4 February 28, 2010 e Unbiased global packaging intelligence and analysis Flex Plan U.S. flexible packaging markets, 2010 LEARNING LESSONS FROM THE NEW ECONOMY A quick glance at the year-end earnings reports of major end-users and packaging converters shows a similar trend line: Those providing domestic household staples seemed to fare the best during 2009. While that might not be shocking news in itself, it is leading to some 54% - Food 10% - Consumer products 9% - Retail, non-food 9% - Industrial 8% - Medical 7% - Retail, poly bags 3% - Institutional, non-food Source: PMMI changes that could affect packaging. Take the beer category, where results were off 2.1% in the U.S. market last year, according to the Beer Institute. Yet, imports were most affected, down 9.7%. That could be influencing glass packaging, a major format for imported varieties. Shares of glass packager Owens-Illinois, for instance, are now “frustratingly cheap,” according to analyst Ghansham Panjabi of R.W. Baird. Small and simple is becoming the rule. Both Walmart and Target have announced plans to move to “small-box stores,” smaller square footage locations in urban centers that do not require shoppers to drive a great distance. While both retailers recently announced those intentions, they also plan to cut the number of SKUs and product categories. Walmart director Allan Questrom told Reuters that o the next 10 years, the United States will see reconfiguration of stores. Pepsi could bundle snacks and drinks, such as a Cheetos bag with a Gatorade bottle. IN THIS ISSUE It also could add up to more multipacks, Ratcheting down ..........................................1 2nd Opinion: Presence of private label ...........................2 Starbucks centers on cups ......................3 Coinjecting the PP container. ..................4 Rise of the reusable box ............................4 PMMI presentation......................................5 Pack Expo preview ......................................5 Putting the starch in the tray ....................6 Bottled water labeling ............................ 6-7 Protect the promotion ................................7 Street Talk ......................................................8 as offerings get combined to reflect the lack of store space. That was referenced in an earnings call from PepsiCo. chairman/ceo Indra Nooyi, who referred to the need for bundled store offerings that align both beverages and snacks and bring together the supply chain more closely. There is less of an emphasis on the premium and more emphasis on convenience and simplicity…which leads to private label, in some cases. As Sonoco president/ceo Harris DeLoach said during his company’s earnings call, private label now makes up about 35% of sales for such retail chains as Kroger. Said DeLoach: “I’m not prejudiced whether it’s branded or whether it’s private label. I’ll take either one that makes sense and gives us the returns.” Packaging Strategies’ Perspective: The evidence is becoming clearer that consumers will not pay a price premium at the moment. Converters will have to adjust with value-based packaging that works within a new paradigm that may not change anytime soon, while retailers are already in the midst of serious adjustments. PS Unauthorized reproduction in whole or in part prohibited without permission of publisher C e E L e E l B c R A T o I s N y a r f e x e l n c Ratcheting downA quick glance at the year-end earnings reports of major end-users and packaging converters shows a similar trend line: Those providing domestic household staples seemed to fare the best during 2009. Publication List |
