Packaging is moving fast to keep pace with market drivers; formerly a sleeping giant, the box industry looks set to become one of the industry's most fast-paced markets as radical new ideas take hold.

The packaging business appears to be developing faster than ever these days. The rise of point-of-sale displays and a race to secure ever-greater operational efficiencies has been coupled with new, more creative design techniques and the impact of technology to propel the market forward at a remarkable rate. Not only that, but similar trends are also being witnessed around the globe.

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As the head of research and development for Stora Enso Packaging, Anders Brolin, explained, "One of the things we see is the trend toward end-use consumer segmentation, which is doing a lot to alter the market. Changes in the demography with an aging population and a changing social structure, particularly in the Western Hemisphere, mean that we have far more single households. In practical terms, that means that we need smaller and more functional packages."

In practice, that often means more creative packaging designs that respond to the needs of today's convenience oriented society. Everywhere you look it seems there are thousands of examples that illustrate this trend, from the plastic screw tops in liquid cartonboard containers used for juice, milk and soups, to the composite packaging used for ready-made meals combining microwaveable plastics and high quality board with cut-out windows and strong print graphics. One product in particular that appears to be finding favor with the creatives on the design side is microfluting. The popularity of the tiny corrugations has risen at an impressive rate in recent years and according to the experts, it still has a long way to go.

Pekka Niku, consultant with Jaakko Poyry in Finland, has been following the market closely. "In fluting we're seeing lots more E and F and it looks like designers are being quite creative with the smaller sizes," he said. "Of course, with anything new you expect to see rapid growth at the beginning, before it finds its level in the market. But microflute is becoming very popular and there are no signs of it peaking yet."

Of course, when it comes to design the ins and outs of fashion also have to be taken into account. But others such as Brolin at Stora Enso also agree that the product's potential is some way from being exhausted. "Different end-users are demanding different types of product and microfluting definitely has the potential to grow further," he notes.

LIGHTER LOAD

While relatively new developments such as microfluting represent a fairly obvious change in the traditional box market, there are far broader changes taking place at more subtle levels. As Niku explained, "We are seeing the traditional mix of liners and fluting changing everywhere. In microfluting the designers are using all sorts of different materials today, including folding boxboard and even one-side coated board. There's definitely been a trend toward using coated white top, for example, and one reason for this has been the increasing use of point of display packaging."

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There is a broad consensus among board producers and converters that packaging is getting more sophisticated and increasingly complex. This is partly because the big brand owners are pushing designers to come up with ever more eye-catching and ingenious in-store displays. But just as importantly, goods manufacturers are also looking for cost savings.

These drivers have combined with factors such as environmental concerns about the potential overuse of packaging materials to create a trend toward what the industry terms 'lightweighting'. Somewhat confusingly, lightweighting does not merely mean cutting down on packaging weights. Indeed, the larger volume packaging required by "big box" retailers such as Wal-Mart means that paper producers and converters are having to pay more attention to ring crush, edge and compression strength than ever before as product volumes increase. Lightweighting encompasses a conscious effort to reduce packaging to a minimal level while maintaining or even boosting functionality. As a result, paperboard converters are using lower basis weight materials where they can and trying to optimize how much "engineering" is incorporated into product packages to minimize costs.

As Brolin pointed out, "I think the mega-trend toward lower basis weights is really a function of two other trends. One is source reduction and the other is a total reduction in business cost, whether that is through simply a reduction in price or through using less material that could be more highly engineered. We're also seeing big changes in transport and handling systems, although that doesn't always mean a reduction in grammages because you're looking at the whole logistics cycle--it's really more of a total cost issue."

That view is echoed by, David Lemmer, operations development director at SCA Packaging. "You have to be careful in talking about the tendency toward lightweighting. What we're really trying to do is to take fiber out of the packaging and use that as an opportunity to reduce costs. All the producers are looking to get better edge crush, compression strength and whatever, but for every gram we manage to take out of the packaging we're still looking to maintain the same performance," he said.

Lemmer points out that in the past, less attention was paid to the true functionality required in each piece of packaging. If a product needed to be wrapped, any handy piece of wrapping material might be used and it didn't really matter what the exact specifications were. However, lightweighting means that today the exact application of each piece of packaging is analyzed to find the optimal solution. "We're looking very carefully at what packaging goes with which product," said Lemmer. "Take a simple sleeve for example. We'll investigate that at lot more carefully these days as the characteristics of the exact packaging we need depends on whether we're making a carrier sleeve or a making a point of sale sleeve."

SCA has also been among those leading the charge toward greater integration between box makers and their customers through information technology projects and operational initiatives where the customer can harness efficiency gains and slash working capital costs.

"We are very big on that stuff," says Lemmer. "It's all about delivering more value for the customer and to do that you need to work closely with them. Today you need to work right through the value chain with your customers to build partnerships. In that way, we hope to get more business in the future, whether it's through IT projects or vendor managed inventory schemes or other projects."

TOOLING UP

Closer integration between box makers and their customers creates new business models. On the one hand, design projects such as light-weighting or the introduction of vendor managed inventory systems make it harder for the brand owners to switch suppliers if another producer is offering a slightly cheaper price. But the trend toward light-weighting in particular could also have wider consequences for paperboard makers.

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According to Niku at Jaakko Poyry, "If you look at fluting, you can see that almost all the new recycled fluting and liner machines are being designed for very low basis weights.

The new Palm machine in Germany can produce liner and fluting as low as 60 gsm and investments at Saica, for example, seem to be aiming in the same direction. The problem for a lot of the liner and fluting producers is that they can't go down to such low basis weights, so it is even possible that this trend could mean a large-scale re-tooling of the entire sector."

While machine builders such as Metso Paper, Voith Paper, and ECH Will might be rubbing their hands with glee at the prospect, Lemmer cautions that it might not be quite the massive business bonanza it first appears.

"Yes, I think paper producers and converters do need to look at achieving better results running finer flutes and that will take some retooling, but you shouldn't exaggerate the effects. This is only one part of the packaging business and there is still a lot of volume in other areas."

LOOKING GOOD

Another feature of the current converting market is being driven by an increased emphasis on presentation quality for point of sale materials and technology advances in printing equipment. According to several converters, new advanced printing techniques are creating a whole raft of new opportunities for high impact packaging in almost every product segment.

"Packaging is developing really quickly, particularly with new developments on the printing side from the likes of Man Roland and Heidelberg. Now it is possible to print one millimeter thick corrugated in offset and even the quality of flexo printing is developing surprisingly fast," explained Niku.

While Lemmer agreed that print technology is proving to be a strong driver for developments in the packaging segment, he believes that some areas have moved faster than others. "It's true that printing technology is improving. But I would tend to say that the main developments have not been on the offset presses, but in post printing. That has really changed. And even on lightweight corrugated, printing with normal flexo is a lot better than it used to be."

MULTIPLE DRIVERS

Of course, printing advances, 'light-weighting' and the impact of demographic shifts represent just some of the main trends at play in today's box market.

Added to all that, hi-tech developments such as RFID (radio frequency identification) tags look set to make a major impact on production processing and tracking as the cost of the tags comes down. New barrier coatings are also being developed at a rapid rate and new box composites are being dreamt up by designers just about every day.

Given the sheer number of demographic, market, regulatory and technological forces in play, it is not surprising that the packaging market is moving quite as fast as it is. Formerly considered a sleeping giant of the paper business, "plain brown box" companies are a thing of the past. Packaging is now awash with new possibilities and board producers, converters and product manufacturers and their customers all stand to benefit.

SERIOUS TEST

It is worthwhile noting that greater complexity and a wider use of composite materials will provide a serious test for manufacturers when it comes to recycling. But given the ingenuity being witnessed throughout the industry as it meets the challenge of today's business drivers, it looks as though box making will be a very lively market in the years to come.

IN THIS ARTICLE, YOU WILL LEARN:

* The trends behind growth in microflute packaging.

* What "lightweighting" really means.

* How printing developments are driving change in packaging.

ADDITIONAL RESOURCES

* "The packaging war just got a lot more complicated," Jim Kenny, Solutions!, May 2003, p. 31.

* Corrugating International, August 2003. Go to www.tappi.org and click on Cl from the home page. (TAPPI members can access all articles for free).

* SCA web site: Go to http://www.sca.se and click on packaging.

About the author: Jim Kenny is contributing editor/Europe, for Solutions! magazine, and is based in Brussels, Belgium. He is the former vice president of editorial for Paperloop and today heads his own company, DSI. Contact him by phone at [phone], or by email at [e-mail].

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JIM KENNY, Contributing Editor/Europe