How do changing supermarket regulations on packaging criteria affect manufacturers?
Changing supermarket regulations on packaging criteria are forcing FMCG packaging manufacturers to continue innovating and developing more efficient, ergonomic and environmentally friendly designs for products donning the shelves. Sustainability debates are creating new demand for green packaging which fulfils the necessary environmental requirements. Whilst legislation regarding nutritional labelling has increased the need to improve labelling design on packs sold in store too. Add to that supermarket demands for shelf-ready packaging, powerful point-of-sale displays and customer-engaging design, then it’s obvious that FMCG packaging manufacturers are under a lot of pressure to bring new products and designs to market that meet a whole host of needs. Here, our panel of experts discuss how those packaging manufacturers are dealing with these changing supermarket regulations.
Ashwin Moorthy, Head of Engineering & Innovation for Nampak Plastics
The laws, regulations and codes of practice that govern the UK’s retailers are constantly changing. As such, businesses that supply to retailers must also evolve in order to stay competitive.
This is particularly true for packaging manufacturers. No longer is it purely the role of packaging to protect, preserve and sell a product: the goalposts have moved and manufacturers need to meet shifting supermarket requirements.
A good example of how things are changing is shown by the Courtauld Commitment. This reached its third phase in May 2013, and aims to further reduce the weight and carbon impact packaging waste in the UK. Around 45 supermarkets have now signed up, all of whom have agreed to reduce packaging waste in the grocery supply chain by 3% and ensure there is no increase in the carbon impact of packaging by 2015.
These targets affect packaging manufacturers in three core areas: the weight of packaging, the recyclability of material, and the sustainability of production processes.
Of course, these areas, and targets associated with them, are easy to identify, but not necessarily easy to achieve. However, Nampak has tackled these challenges head on through a number of programmes related to the award-winning Infini bottle.
Firstly, the weight of packaging. The unique patented Infini design means material is not forced as far into each of the bottle’s corners and, in turn, the bottle can be light-weighted to new levels. In February, Nampak created the world’s lightest four-pint HDPE milk bottle. Weighing 32g, it gives a 20% material saving on the standard version found in supermarkets today.
Secondly, the recyclability of material. In May, Nampak trialled, tested and supplied the world’s first four-pint milk bottle containing up to 30% rHDPE – double the amount of recycled material used in most plastic milk bottles.
These two achievements will result in 35,000 tonnes of material saved every year and will also herald significant carbon savings across the industry. Finally, Nampak closely monitors its manufacturing practices and last year achieved a key goal of ‘zero waste to landfill’ following a company-wide drive to enhance sustainability through recycling and waste management. These achievements are important steps forward. However, supermarket requirements will continue to change in the future and it’s therefore vital for packaging manufacturers to stay at the forefront of the sustainability agenda.
Simon Taylor, Sales & Marketing Director for Endoline Machinery
Shelf ready packaging (SRP’s) refers to packaging which can be easily transferred from a shipping container or pallet to a shelf display – a business solution which has been developed to drive down supply chain costs and meet the needs and expectations of retailers. However, food manufacturing is an ever changing industry with the constant shift in consumer trends posing an on-going challenge and in order to keep up retailers frequently set out new criteria to change the design of shelf ready cases making products more accessible and attractive to customers. Couple this with the rising uptake of robotics and automation within the food and drink industry the need to comply with these retail expectations and changing SRP criteria can prove to be a double edged sword for manufacturers. While automation can drive up throughput manufacturers need to ensure they have appropriate, flexible equipment to deal with differing, and changeable packing configurations while keeping downtime and wastage to a minimum.
SRP’s offers a number of benefits however, the cost of widespread adoption of SRP’s cannot be recovered at the retailer by increasing prices – this must be offset elsewhere by reducing the overall cost of goods on the shelf. This can be a complex matter and usually requires significant initial investment at several stages in the supply chain and the adoption of automation by food producers amounts to a substantial part of this investment.
But how do manufacturers ensure that the initial investment they make in automating their packing operation becomes a long term asset? In-built adjustment handles or LCD touch screens need to be accessible and offer ease of use to the manufacturer while allowing for a quick changeover period The wastage of materials due to poor packaging machinery is another area which can affect downtime, in particular case erecting machinery handling a variety of case sizes of different materials can cause tears if the case is not opened positively from both sides. This can be overcome with the use of dual sided opposing vacuum grippers which provide solid, equal compression to pull the case open eliminating potential wastage and ultimately downtime on the production cycle.
Innovation within the food industry is driven significantly by the retailers, whose productivity is determined largely by the efficiency of its supply chain. The prevailing trend by retailers to make widespread use of shelf ready packaging is easy to understand in terms of operational efficiency, and food manufacturers need to work with their packing equipment provider to engineer innovative new products designed to work efficiently at high levels of productivity with SRPs.
Joanna Stephenson, Vice President Marketing & Innovation at LINPAC Packaging
Packaging manufacturers have to adapt to the needs of retailers and respond to changing consumer and industry trends to develop packaging solutions which perform well.
As the convenience and food-to-go sectors grow rapidly, not only are consumers looking for foods which can be eaten quickly and easily but they want their shopping experience to be shorter and to be able to make their purchases faster. To address this, manufacturers are developing packs which offer excellent product visibility, not only through superior polymer clarity but pack design too.
The complexity of packaging is escalating as retailers and food manufacturers look for novel packaging which helps their product stand out from the crowd. There is demand for more graphics on packaging and for more choice of colour to create ‘tiering’ – good, better, best ranges or value, standard and premium. As a result of this, the production of packaging becomes more complex; there is continuous fragmentation of the product portfolio and SKU proliferation increases for all the supply chain – from packaging supplier through the packer and into the retailer. The green agenda is another key area of attention for packaging choices for supermarkets. To reduce their carbon footprint, retailers require packaging which is manufactured from recycled materials or which can be easily recycled by consumers.
Recycling is, of course, advantageous where it can recapture more resource and carbon than that used in recovery. This is certainly possible with many materials, yet we have to be realistic about the extent to which we can recycle. Recycling is successful only for a limited choice of materials and it is more difficult to recycle when dealing with complex multi-material solutions. Whilst this makes recycling more efficient and helps mitigate carbon in the supply chain, it also restricts material choice and inadvertently promotes a trend towards heavier containers. The fixation on recyclability by supermarkets means other routes to carbon mitigation are often neglected despite the efforts of packaging manufacturers to promote other methods and options.
Finally, in the UK particularly, there is a growing trend for Retail Ready Packaging (RRP) and Shelf Ready Packaging (SRP) designs instigated by retailers to minimise their costs through one-touch replenishment of shelves; therefore reducing labour hours required to restock a store. Whilst RRP/SRP is clearly an effective solution to the labour intensive shelf management issues that retailers have, there is a need for RRP to be designed at the same stage as the individual pack it is being manufactured to hold.
So often, RRP is an afterthought and not well designed for the application it is designed for. Too often we see wet and soggy cardboard or cartonboard SRPs in chilled applications and damaged SRPs that aren’t fit for purpose in their design – tear strips ripping away the front labelling panels, incorrect loading or simply a design that hasn’t considered how the consumer wants to search through the packs to choose their product.
Ian Williamson, Retail Manager for Tetra Pak UK & Ireland
In response to the waves of regulation introduced since the 1994 European Packaging and Waste Directive, and the later iterations of the Courtauld Commitment, retailers have set ambitious targets for their packaging use. Notable examples include M&S’ commitments under its ‘Plan A’ programme, and Sainsbury’s goal of reducing its packaging by 50% from 2005–2020. Helping retailers to meet these targets and achieve their sustainability ambitions has therefore been – and continues to be – a major focus for packaging manufacturers.
Initially, efforts were largely centred on reducing waste and increasing recycling rates after use. However, manufactures are now increasingly taking a more thoughtful and holistic approach – from light-weighting to increasing their use of renewable materials.
At Tetra Pak, we have always focused on creating packaging that is as sustainable as possible throughout its life-cycle. Among other things, this includes optimising the design of our cartons to minimise climate impact without compromising functionality or food safety, ensuring they are widely recycled after use, and ensuring that we use renewable materials like paperboard sourced from responsibly-managed forests. We consider environmental performance at the earliest stages of design and invest heavily in research and development to produce innovations like caps made from renewable, sugar-cane-based polymers. Globally, our ambition is to offer cartons made entirely from renewable raw materials by 2020. But it is not just the focus of manufacturers that is evolving. Retailers are now pushing for lighter-weight equivalents of traditional formats with a lower environmental impact. We are also seeing them becoming more selective about the formats they choose. So, rather than, for example, setting a target to reduce the weight of an existing package, they are asking if they can supply their products in different packaging formats that might have a smaller climate impact. This means we’re seeing products moving from cans to cartons, and glass along with plastics moving to pouches, for example.
As well as helping to meet their environmental goals, manufacturers’ developments in sustainable packaging design can help retailers to gain a competitive advantage, by cutting the costs associated with less sustainable alternatives. Another key driver, whilst not regulatory, is landfill tax, which has more than doubled over the last five years from £32 per tonne in 2008, to £72 in 2013.
Packaging manufacturers’ expertise is also instrumental in helping retailers to assess and measure the impact of their packaging use. For example, as we moved into the second stage of the Courtauld Commitment in 2010, measurement of packaging performance grew to include CO2 emissions, as well as weight. At Tetra Pak, we are able to provide retailers with a wealth of robust data enabling informed decisions to be made.
Changing supermarket regulations on packaging have certainly played a major part in the setting of ambitious targets to improve the environmental performance of products sold across the UK. In our case, the environmental profile of our packaging has always been of paramount importance. However, across the industry, it is clear that changes to regulations are driving innovation and have played a significant role in speeding up the development of more sustainable packaging solutions. Huge strides have been made in recent years to make packaging more sustainable, and I am sure that there are plenty more exciting developments to come.
Ashwin Moorthy is Head of Engineering & Innovation for Nampak Plastics. His main areas of responsibility include the evaluation, development and integration of traditional and sustainable packaging materials; new lightweight and value added liquid dairy product packaging and energy / cost efficient production solutions into the multisite business. His role also entails implementing strategy and solutions to maintain Nampak’s market leading position as a supplier of High Density Polyethylene bottles to the UK dairy industry.
Simon Taylor is Sales & Marketing Director for Endoline Machinery. Simon Taylor is Endoline’s Sales and Marketing Director. He has been in the position for over 12 months and is responsible for spearheading the company’s international campaigns by incorporating both the UK and Endoline’s extensive network of global distributors; while promoting the diversity of Endoline’s broad equipment range.
Joanna Stephenson is Vice President Marketing & Innovation at LINPAC Packaging. Since graduating from the University of Manchester, Joanna has garnered wide ranging experience across the manufacturing sector beginning at Dow Chemical. She later became a performance coach and consultant with rogenSi. In 2007, Joanna became European Marketing Director at Sun Chemical and in June 2011 she was headhunted by LINPAC to become Vice President Marketing & Innovation.
Ian Williamson is Retail Manager for Tetra Pak UK & Ireland. Ian joined Tetra Pak in January 1986 and spent 7 years in the technical division in service, machine development and R&D in Sweden. A departure into marketing and product management responsible for cluster Nordics ended in 2008 with a role in retail management for the UK and Ireland. Prior to joining Tetra Pak Ian trained at Fairey Engineering home of the infamous Fairey “Swordfish” and moved into packaging development with United Biscuits until the mid-1980’s.