Packaging: What issues does the Australian packaging industry face?
Gavin Williams: The packaging industry in Australia faces a significant number of challenges.
One of the most significant is the extent to which empty packaging - and here I'm talking about packaging as distinct from the packaged product - is now a tradeable commodity.
There are large quantities of pizza boxes, glass jars, those sorts of things coming in from overseas - mainly from Asia. That means your major competition might now be based in China, Taiwan, Korea or Indonesia.
Many of the imports are fundamentally lower cost, lower quality, and probably not quite as good. But that is changing. Quality is improving and is broadly acceptable.
The issue for the Australian industry is how does it respond to this challenge?
Generally, I doubt that it can be on the basis of price. Rather, service and value-add will provide the competitive edge. And that opens up another issue, which is the question of what the industry provides. Is it simply providing a commodity or is it adding value?
These questions are very important for the industry. I suspect in the past the industry has often put a lot more effort into winning contracts but not so much into thinking about how they can better service their clients.
It now needs to put more into servicing the contract and providing the value-add. Maybe six monthly assessments to how the process is going. Innovation ideas and how the packaging can be improved.
Another issue is the actions and policies of the retailers. The big overseas retailers like the Wal-Marts and Tesco's that are making a real push into the sustainability area and using that as a point to differentiate themselves from their competitors.
They see sustainability as an opportunity to reduce their costs and increase their margins.
It's not yet happening to any significant extent with retailers in Australia yet, but I suspect it will come. I think companies need to position themselves, because once that happens, packaging becomes an easy target.
Packaging represents a very small percentage of the environmental impact of the entire packaged product, but it's a popular and populist one and it's a highly visible one.
And what are the long-term implications for packaging manufacturers of the supermarkets private labels winning a greater market share?
Another issue - and one that I think is true of the entire manufacturing sector - is the quality and diversity of its workforce. If you asked the cream-of-the-crop of university graduates at the end of each year if they want to get into the packaging industry, I don't think you'd find a lot of takers.
The entire packaging supply chain needs to make a greater effort to attract the best and the brightest into the industry.
Packaging: Discuss the various trends and their drivers in packaging design.
Williams: Sustainability will remain a big one, because the global retailers are driving the issue.
Consumers are becoming more demanding in what they require from their packaging and their packaged products. Consumer requirements dictate packaging needs.
The Australian community is getting older, so the issue of openability is an important one and will remain so: packaging that can dispense the right amount of medicines. Also, for certain types of products, packaging that is child resistant. Tamper-evident packaging: If the product has been tampered with, the packaging will let you know.
The old days of the traditional family eating at a table together are gone.
The busier lifestyle means that the old-style family meal is not as common as it used to be; people are on the go and want different types and sizes of products. Smaller households mean packaging products in different sizes, so people can take them home, use the microwave and have a meal instantly.
That puts a premium on innovation and coming up with new ways to meet those consumer demands. Those sorts of things - differentiated packaging to address different types of populations - will be one of the keys to success.
Packaging: What are the effects of consumer demand?
Williams: The sorts of trends we've been talking about - family; both partners working and coming home and putting something on the table quickly; an older population - are trends which the industry needs to respond to.
If it fails to do so, then consumers will move onto products that meet their needs.
There are some obvious exceptions, but by and large, I think it's true to say that the Australian industry has a history of being innovation takers rather than innovation makers. They follow trends rather than instigate them.
At the same time, there are some excellent examples of Australian innovation over the last dozen years or so. An obvious and impressive one was the Owens-Illinois lean and green lightweight wine bottles.
But if companies don't keep up with the trends or don't anticipate the trends, their competitors almost certainly will.
The key is going back to competitiveness. The product on the shelf has to be competitive in terms of price, shelf appeal, the contents.
Don't forget in all this talk about packaging, people don't buy packaging; they buy packaged products.
Packaging's role is to protect, conserve, contain and get the product to consumers in a safe and sound condition. That's a given.
Packaging Council of Australia
www.pca.org.au
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