Author: tdavis@insitepackaging.com

Change can be hard to adapt to, especially in the automated packaging machinery industry, where proven credibility and established success are valuable ways to build trust with your consumer base. For consumer packaged goods (CPG) manufacturers and packagers, it can become all too easy to trust in older processes, counting on methodology that has worked in the past to continue to return a profit. However, as new technologies and changing customer demands spark change in CPG, secondary packaging automation (SPA) and packaging solutions included, producers are being forced to innovate to survive.

2018’s biggest CPG retailers have proven that the old ways of doing things no longer hit the mark. For example, L’Oréal Paris saw $32004 million in profits last year, earning a spot among the top 10 CPG brands on a global scale. Much of the skincare and makeup giant’s success can be attributed to innovation in the areas of production and advertising. L’Oréal’s marketing, showcasing commitment to ethical production and international presence, set the company apart. If you want to increase production and secure your place among the big brands, enterprise resource planning (ERP) implementation through improved processes, more efficient manufacturing equipment and stronger marketing is the key.

Is it Time For a Manufacturing Update?

Rethink Your Production Process

Many CPG and SPA producers have rich histories in the manufacturing industry, but are losing potential profits to younger businesses that have taken the time to examine existing production processes and actively work to improve weak points. Communication and follow-through are the keys to success here. When considering a significant potential change in your production process, it is imperative to follow the change through the entire manufacturing line, considering how it could alter other parts of the process — down to distribution.

As you think through potential changes, strive to remain flexible and be open to new suggestions or ideas. Just as the needs of manufacturing’s primary consumer base continue to evolve, CPG and SPA producers must also be willing to change in order to best meet the needs of their supporters. Survey the industry and stay aware of evolving methodology so that you can incorporate advances that benefit your consumers and your business.

Update Your Production Equipment

Legacy equipment presents a number of problems that can make companies hesitant to update their manufacturing processes. As machinery ages, upkeep becomes more necessary as parts wear out. Generally, this means upkeeps also gets more expensive. Parts become difficult to find for older, outdated machines, and repair companies and techs who have experience with obsolete machinery can be hard to find. Although an update in manufacturing equipment provides an obvious solution, complete modernization of equipment often requires more time and resources than any single company can handle at once.

Industry Week recommends taking a migration approach to update your manufacturing system instead of modernizing your process all at once. Often requiring the time of only a single tech, the migration approach allows manufacturers to replace pieces of legacy equipment one at a time, slowly integrating the modern machines into their existing processes. Sometimes, one new piece of quality equipment, like an automated case erector, is all it takes to bring new life to your manufacturing line. Although this approach will require more time in order to fully optimize your process, it’s far more budget-friendly and more easily accepted by employees since it does not require your workforce to learn entirely new equipment.

Improve Your Manufacturing Marketing

In today’s world, producing a good product is no longer enough positive advertising for your manufacturing business. Marketing, whether through social media, your own website, or even TV and radio commercials, is crucial to increasing your potential consumer base and growing name recognition. Consider publishing an “About Us” landing page on your primary company site to help boost marketing efforts while continuously pointing visitors to your site. Creating informative pages like this provides potential consumers with incentive to browse further and navigate to the products and services you can provide. In addition to being useful in a marketing sense, an About Us page gives you a chance to tell your company’s story and to present the values that are important to you.

Stay Ahead With INSITE

Are you searching for an advanced case erector or case sealer machine to replace a piece of legacy equipment and help streamline your existing manufacturing process? Reach out to INSITE today. With proven experience in product packaging solutions, our attentive team is eager to help you optimize your manufacturing process for success.

According to National Geographic, a staggering 91 percent of plastic is not recycled. Although mass production of plastic and plastic products began a short sixty years ago, 8.3 billion metric tons of largely disposable plastic and plastic goods waste has been accumulated. Plastic takes over 400 years to disintegrate. Packaging or disposables such as utensils and to-go coffee cup lids comprised of plastic are detrimental to the environment and the animals who may encounter it. To combat this growing economic problem, consumer packaged goods (CPG) brands and distributors are diligently working to improve the plastic-heavy food and beverage packaging trends by finding innovative ways to make current products more eco-friendly.

Why Plastic it Still so Popular for Food Packaging and How This Can Be Changed

The Plastic Soup Foundation, an Amsterdam-based organization dedicated to ending plastic pollution throughout the world’s oceans, has proved that plastic and food waste are strongly related. Although food products typically last two to three times longer when packaged using plastic, the amount of food waste has not decreased with the increase of plastic packaging. Since single-use packaging was introduced in the 1950’s, both plastic and food waste has increased exponentially. The disadvantages of plastic in the environment are exponential.

The thinking that using plastic is the only way to make food last longer must be changed. In order to preserve the environment for future generations, food packaging methods must improve. One way businesses are beginning to move away from plastic products is to allocate some of their research and development funds to pursuing alternate packing materials. For example, Starbucks Coffee shared that by 2020, it will eliminate single-use plastic straws from every one of its 28,000 stores worldwide. This will be accomplished by expanding the use of strawless lids and increasing alternative-material straw options.

Innovative Companies are Already Leading the Way

In March 2018, Packline USA introduced Repeat USA, an entirely recyclable PE (polyethylene) film and pouch. Comprised of multiple layers of barrier film that have been laminated and sealed together, the resulting structure is similar to multi-use plastic bags produced by CPG brands like Ziplock. The pouch eliminates elements that can have a negative effect on products such as moisture, vapor and odor. The pouch is advertised to be effective for wet, dry, frozen or modified atmospheres. These pouches are providing an excellent alternative to plastic for the environmentally conscious consumer.

The European-based companies Mondi and Werner & Mertz have announced that in 2019 they will jointly unveil a 100 percent recyclable pouch, complete with detachable decorative panels. Their goal is for this product to replace conventional flexible packaging for Frosch products. In development since 2014, the pouch was created with the intention to “reverse-engineer” the recycling process and offer an alternative packaging fit for every stage of recycling.

Immo Sander, the head of packaging development for Werner & Mertz Group, explains “[in order for the design of this pouch to be successful] the entire value chain must be aligned — from packaging producers through players in sorting and recycling to buyers of recycled material.” With two layers comprised entirely of PE mono-material, a prerequisite for recycling, the innovative design of the pouch allows for a speedy composite breakdown. Sander continues, “[We] dress the pouch up in an eye-catching ‘outer garment’ that is printed with brand design on the front and consumer info on the back. When the pouch is empty, we ‘undress’ it automatically by shredding and sorting the two components into separate recycling streams.” Free of glue or artificial adhesives, even the cap and pouring mechanism of the pouch are entirely recyclable.

Consumers can be confident that companies are making a conscious effort to improve current food, beverage and product packaging trends.

What Packaging Changes Mean for the CPG Industry

As consumers increasingly shift their support towards environmentally conscious food and beverage packaging trends, CPG retailers and providers must be willing to evolve. That means taking the time to reflect on production processes and making steps towards the use of organic and recyclable materials. These steps don’t have to be grand gestures—they can be smaller changes, such as switching out packing foam or styrofoam packing peanuts for biodegradable cornstarch or mushroom packaging. Not only will these efforts make a difference in reducing a company’s environmental footprint; these changes may even encourage consumers not currently working with environmentally friendly companies to shift their business to one that employs more sustainable practices.

Are you currently searching for simple, smart, automated packaging solutions? Consider INSITE. We are excited to partner with you, meeting all your packaging equipment needs in new and innovative ways. With our stellar customer support and streamlined designs, we’ll provide you with the experience and equipment you need to get the job done.

In an industry where new and innovative packaging is constantly entering the market, it is crucial that CPG professionals understand the current, and rising, needs of our clients so we can meet and exceed their expectations in 2019 and beyond.  By paying close attention to consumer feedback, secondary packaging companies can gain insight into what areas of production should be increasing, or changing, to accommodate new needs.

At INSITE, we strive to put our customers at the center of everything we do. We know that success (or failure) depends on the support of loyal customers. Thanks to extensive research, CPG professionals have discovered what changes and improvements customers would like to see reflected within our industry in 2019 and beyond. Keep reading to see our “four S’s” for providing quality service to your current and potential customers.

The Four S’s:

1. Simplify

Jim Campbell, north-central Regional Sales Manager of BluePrint Automation (BPA), shares just how complex this industry has become. He writes, “[e]quipment manufacturers are in constant competition to find new ways to automate this [secondary packaging] process…. Advances that are making this process more flexible are the introduction of vision-guided robotics.” While automation can be a time-saving and efficient process, an abundance of work and time must be spent to get to that point so things can be simplified in the long run. Research shows that manufacturers appreciate simple machines that can do more, so that in turn, they can provide a more simple, yet better designed, product for their customer base.

2. Streamline

Two years ago, a blog by EDL packaging shared, “secondary packaging is commonly completed in the same facility where the primary packaging is created in order to streamline production and packaging processes.” Since this blog’s publishing, many companies within the packaging industry have taken note, and expanded their services to include primary and secondary packing services. When things are streamlined in this way, companies can afford to lower prices on their services since they are saving time, money and production. In a competition-saturated market, where many companies offer a similar service base, streamlining your manufacturing process down to examining its very mechanics will only set you up for future success.

3. Serve

In today’s technical world where nearly every commercial industry has been trumped by automation, quality customer service from real people is still necessary … and much appreciated. An article by Forbes puts the automated vs. human customer service argument into perspective: “New AI [automated service] tools are rapidly emerging in the support space that can address high-urgency situations quickly, but when it comes to high-emotion scenarios, no AI can replicate human empathy, so there’s still a distinct advantage to having a real person help a customer. Whether it’s your own airline fiasco or an on-demand food delivery app delivering your meal late or cold, some support interactions just require a human element.” At INSITE, we work directly with our customers – twenty-four hours a day – to help solve your problems because we believe good business begins with honoring the time of our customers.

4. (Find Ways To) Say Thank You

There is more competition today in the CPG industry than ever before. With the top six global competitors accounting for only 20% of overall industry value, a majority of support from smaller businesses is up for grabs. Although our first three consumer insights (simplify, streamline and serve) will help boost your business in 2019 and beyond, truly appreciating your customers, by directly meeting their needs, is the key to unprecedented success. Take notes from the ten biggest CPG brands in the world, all of whom have spearheaded campaigns specifically designed to tell consumers, “shop with us because we put in the work to meet your needs better.” What sets these businesses apart is not their management, their 20-year plans, or even (at times) the higher quality of their products. Instead, it is their ability to successfully market to the average, middle-class American consumer.

With a consumer reach of $1.67 million, Dove’s revolutionary 2004 ‘Real Beauty’ campaign highlighted what real customers loved best about Dove’s packaging and product, always rounding back to the concept that beauty is an inner choice any person can make. Similarly, Lays (owned by PepsiCo), with a customer reach of $2.2 million, ran a “Do Us a Flavor” campaign that encouraged chip fanatics to submit their own flavor ideas for a chance to win a cash prize, and have their flavor join the Lays product family. Both of these examples provide a brilliant way of recognizing customers’ voices and impact while thanking them for their support.

Partner with The Right CPG Manufacturer in 2019

As your company prepares to move into 2019 and works towards simplifying, streamlining, serving and saying thank you to your supporters, partner with a CPG manufacturer who confidently supports your mission to bring customer satisfaction back to the forefront of packaging. At INSITE, our customers are the inspiration behind the design, creation, delivery and support of our standardized secondary packaging equipment.  We would love to sit down with you and discuss how INSITE can partner with you in 2019 and beyond.

The Business Dictionary’s definition of private labels is ““a brand owned not by a manufacturer or producer but by a retailer or supplier who gets its goods made by a contract manufacturer under its own label. Also called private brand.” Private labels are quickly gaining popularity in the consumer packaged goods (CPG) industry. There are two opposing ways of thinking when assessing the ongoing shift in demands from today’s consumer. First, one could hypothesize that the cheaper prices are appealing to a wider consumer base. Or, it is possible that retailers selling high-quality (but more highly priced) store brand products are damaging their market base by offering the average consumer too many purchasing options.

The rising popularity of private labels is creating a new challenge for the greater CPG industry that must be quickly addressed. It is possible that changes and declines will start being seen across the market as the demand for private labels continues to increase. The question is this: what does the new (and increasing) demand for private labels mean for the established CPG industry, and how do CPGs rise to the occasion to capture this potential business? Below, we have listed our best insights into this problem, and how INSITE is staying on top of the challenge.

Advantages of Private Labels: Why Companies Are Using Them

1. Little to No Overhead

Marketing and promoting known brands requires a large marketing budget. More expensive displays, costly commercial marketing campaigns and attractive, premium packaging all work together to drive up costs throughout the CPG and secondary packaging industries. In turn, these expenses correspond to a higher overall price on the product once it hits the shelves. When the CPG industry introduced packaging machinery that applies private label goods directly into boxes and on the shelves, these costs started to decline. The marketing budget necessary to work with a smaller or lesser-known product is typically much lower than working to produce a name brand product. This allows for more funds to be allocated to other parts of the budget.

2. Higher Profit Margins

As we discussed above, the overhead costs to produce private label goods are traditionally less than the costs to produce commercial label goods. When manufacturers have the ability to lower their costs, without having to worry about the expensive marketing dollars, their return on investment increases automatically. These funds can now be funneled elsewhere, which provides businesses an opportunity for new growth and expansion.

3. Increased Consumer Satisfaction

Forbes uses the Costco store brand, Kirkland, as an example of brilliant private labeling. This quickly growing grocery store and mass marketing chain has caught on to the incredible value that their private label off-brands add to their overall profits. In fact, their private label, Kirkland, now accounts for over 25% of their overall sales. With customers loving the reliability and lower price of the Kirkland brand, Costco has put in the work to make their private labels as attractive as any name brand item on their shelves.

Costco’s success proves that not only can private labels compete with commercial ones, but that when marketed correctly, can quickly become the secret to a company’s success.

Potential Problems With Private Labels

1. Inventory Issues

When placing a manufacturing order, there are often minimum amount requirements that must be met. Determining the correct product to order, and at what quantity, is a tough decision for every businessperson to make. Privately labeled products are almost always non-returnable, which adds even more weight to this decision. If too much inventory is ordered, the seller will be forced to drop their prices and lose profits. If too little inventory is ordered, the company will miss out on potential sales.

2. Brand Name Bias

Although brands like Costco are proving that private label brands can compete with commercial brands, consumers prefer to support brands that they know and can trust. The Small Business Chronicle reports that consumers usually rely on past experiences or word-of-mouth from family and friends when selecting new brands or products. For this reason, new or privately labeled brands can have a hard time being accepted into the mass market.

How the CPG Industry Can Rise to the Challenge

The most successful CPG companies secured their positions as major supporters in the packaging and secondary packaging industries through large-scale marketing campaigns and a commitment to customer service and quality products. CB Insights has identified common denominators for maintaining success in the CPG industry despite the rise of private labels:

• Consolidated manufacturing and streamlined distribution for quality and pricing control
• An Investment into effective marketing that produces user-friendly, interactive media a consumer base can stand behind
• A willingness to adapt to and cater products and insights based on customer feedback

Choose INSITE

At INSITE, these common qualities represent some of the core reasons we operate our growing business the way we do. The experts at INSITE are committed to harnessing the creativity and commitment to quality demonstrated at Douglas, and applying it to our new, streamlined approach with the goal of providing customers access to exceptional standardized packaging equipment. Our streamlined and reliable packaging operations are a great option for any company seeking CPG expertise. Contact us to schedule a tour of our facility, or get a quote today.

Now that 2019 has begun, we’re taking the time to look back at 2018. It was a big year for many; including ourselves. At INSITE, we took last year to introduce our brand to our customers and supporters. We added a new logo to our brand lineup and attended 2018 PACK EXPO in Chicago as an exhibitor for the first time. We proudly showcased the hard work we’ve done behind the scenes to create the next great line of innovative case erectors and case sealers.

We aren’t the only ones who had a good year. Across the greater consumer packaged goods (CPG) industry, many businesses (large and small) saw positive growth and change during the 2018 fiscal year.

The general consumer base also went through a few changes in 2018. Corporations rose and fell by the demands of consumers in 2018, and others were forced to completely overhaul internal systems. Today we’re diving into some of the top shifts in consumer demand from 2018.

2018 by the Numbers

While we’re still waiting for the final numbers to come in, data from 2018 Quarters 1 and 2, partnered with real-time statistics, provides us with a good look at the 2018 market. Fast-moving consumer goods, or consumer packaged goods, were the big winners in 2018. Many markets across the globe saw notable increases in GDP growth; particularly those in manufacturing and retail. However, global uncertainty brought on by current events and world politics made some consumers feel uneasy, prompting some portions of the market to suffer as consumers began shopping more discriminately or less frequently – opting to save their money in case of future strife.

Within the CPG realm, center-of-store edibles and fresh perishables were the big winners. According to a Nielsen report, non-edibles in brick and mortar stores saw little to no growth, with a -$0.6B change in June. By the end of Quarter 2, brick and mortar sales had increased by 0.7% which factors out to around 5 billion. When comparing numbers, the percentage delta is misleading: center-of-store edibles saw the largest top line growth of the measured categories. But, when factoring the same department sizing toward profits earned, fresh perishables actually emerged the victor within the CPG realm in 2018.

The non-edibles sector had a good year despite some setbacks in June. The personal care and home goods segments saw steady growth. When it comes to the personal care sector, the industry saw a major boost as younger demographics, particularly Millennials, opted to spend their earnings on at-home personal care products as opposed to more costly salon or beauty services.

Within the non-edibles sector, home care and health were the winners in 2018. As of now, small manufacturers have reached a 6.2% growth rate since 2009 while private-label products have experienced a 2.8% growth rate. Large manufacturers with a value that exceeds $3 billion saw a 1.6% growth rate while medium manufactures saw a -3.7% decline over the same time period.

The Trends that Shaped 2018

The trends of 2018 revealed a unique pattern that has many excited. Most of the biggest trends revolved around conscious consumerism and online retail. While we’ve made our predictions for the trends that will shape 2019, let’s look back at the movements that shaped the 2018 fiscal year.

Online Ordering

Back in 2013, online sales were attributed with making up as little as 1% of total web sales revenue for CPG products. Experts predict this percentage will increase to as high as 20% by 2025. Consumers are opting to spend less time in stores and more time doing the things they love, making the convenience of online ordering and delivery attractive to a digital-first generation.

Green Alternatives

As mentioned above, conscious consumerism was a big trend in 2018. Thanks to the wide availability of knowledge due to social media and online news sources, the average consumer is more informed than ever before.

Consumers are taking an active role in deciding which products and brands they want to give their money to. In a recent Nielsen report, it was found that consumers are willing to pay extra for both sustainable products and firm moral beliefs. In the same report, 73% of Millennials said that they were willing and actively tried to purchase sustainable goods. This has prompted many brands to reinvest in their own eco-friendly plans and initiatives.

Social Good

There are hundreds of thousands of brands in the market. Between private label and name brand products, recent data shows that it’s not always the price of the product that will win, it’s the integrity of the company behind it.

In 2015 P&G, through their Always brand, released their #LikeAGirl campaign. The messaging revolved around empowering young girls and spreading the word that the phrase “like a girl” doesn’t need to have a negative connotation or imply weakness. In just three months, the positive sentiment associated with the campaign reached a nearly unheard of 96%. The headlining video for the campaign became the number two viral video globally with over 90 million views. Subsequently, purchase intent grew more than 50% among their target demographic.

This trend of consumers lining up behind brands they connect with on social or environmental issues is one that greatly influenced 2018. The brands that saw the biggest growth were ones that took the time to connect with their customers.

2019 Opportunities with INSITE

2018 has come and gone, but 2019 presents limitless opportunities for growth and expansion. INSITE will continue to grow our brand and connect with our customers and supporters. With case erectors and sealers for any size outfit, we’re prepared to help businesses reach their goals in 2019 and beyond. If you’d like to learn more about how an automated secondary packaging system can help your brand succeed, give us a call today.