How the Pandemic Changed CPG and CM/CP Packaging Relationships

2. My prediction: Speed-to-market will prioritize larger production runs.
What has happened: Another practice that companies have enacted to increase their order fulfillment rates has been to move production of smaller volume or new products externally to allow internal manufacturing to focus on larger production runs. Changeovers on production lines cause downtime and limit output on commercial manufacturing lines. Smaller production runs and suppliers with large minimum order quantities (MOQ) have end users looking to additional service provider companies to provide innovation and efficiency with speed-to-market capabilities unavailable internally.

With the ever-changing marketplace and the growth of e-commerce, speed-to-market is still a major pain point for all end users. Service provider companies that can offer multiple services are in demand. The use of digital packaging and personalization offers service provider companies an opening to fulfillment, as major end users’ manufacturing is usually geared to larger volume and longer production runs.

3. My prediction: Attention to “unboxing” or the “opening experience” will drive opportunities.
What has happened: As e-commerce business continues to grow, the amount of attention and development that goes into providing customers with a positive opening experience with their e-commerce product’s packaging continues to be crucial. The amount of traffic that social media influencers can drive through positive reviews is amazing and a lot of that has to do with the consumer’s experience when opening the e-commerce package. This type of value-added service is a driving point for end users that are working to increase their e-commerce business and reputation.

The need for an opening experience provides a growing opportunity for service providers for low-cost, quick packaging changes. Options include repacking multiple varieties of products into bundles and personalized packaging that end users do not want to be burdened with internally. This has not changed. This area has only grown and become a key growth opportunity that service providers can offer.

4. My prediction: Service providers will thrive running new packaging innovations.
What has happened: The fourth point I mentioned that has changed the service provider/end user relationship resulting from COVID-19 relates to innovation, productivity, and robotics. As end users are concentrating on fulfilling orders on current products on their existing manufacturing lines, they may lack the line time or manpower to validate innovative new packaging and products or packaging and productivity initiatives. This still exists and has only grown as business has increased, and end users must use service providers to expediate clients’ orders. End user companies are going to turn to service providers to run new innovative packaging/products until they can justify bringing them in-house. As many end users’ production lines are at capacity, having downtime to validate new packaging/products might not be a feasible alternative.

Finally, an issue I did not consider in 2020 was the amount of business and the changes that COVID-19 would generate for service providers. The pandemic caused many companies to seek outside assistance to fulfill customers’ requests. End users had issues running their facilities and production lines. Today, employees are in high demand and the idea of robotics and Artificial Intelligence (AI) technology is inviting. However, the number of orders these companies are trying to fulfill pushes lead times out to approximately a year or longer. COVID-19 has changed our packaging industry, and the service provider industry is growing to meet these larger end user requests. PW

The author, Brian Stepowany, is Packaging R&D, Senior Manager at B&G Foods who currently serves on IoPP’s Board of Directors. He is an IoPP Certified Packaging Professional Lifetime and Fellow. For information on IoPP’s educational offerings and member networking opportunities, visit www.iopp.org.