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CPG Manufacturers to Grow Investment in Retail Ready Packaging

June 18, 2014
How much is invested will depend on lifetime cost, labor costs, equipment flexibility and reliability.

The growing businesses of large-box stores and supermarkets, particularly in developing markets such as Asia and Africa, are also growing the market for retail ready packaging (RRP), says a recent report from PMMI, The Association for Packaging and Processing Technologies. For this report, “Retail Ready Packaging: Research and Analysis,” researchers conducted lengthy interviews with an assortment of brand owners, machinery manufacturers and retailers to learn what’s behind this growth.

“Urbanization, population and economic growth are significant drivers for RRP,” says Paula Feldman, director, business intelligence, PMMI, “especially when they are accompanied by an increase in the number of supermarkets and large box stores. RRP enhances shelf appeal and supply chain efficiency, so retailers often see it as a must-have, and use their considerable leverage with manufacturers to make it happen. As they adjust their packaging requirements, manufacturers must continue to innovate to stay competitive.”

CPGs interviewed generally expressed willingness to invest in specialized packaging machinery for RRP — if it would mean reduced costs in the long run. But they also preferred limiting investments to components that simplify and streamline particular points on the manufacturing line. Considerations of lifetime cost, labor costs, flexibility and reliability all weigh heavily on their purchase decisions for RRP equipment, as does knowing that packaging requirements are apt to differ from one retailer to another, and between an individual retailer and the market at large.

Although the conundrum can put manufacturers in the position of absorbing equipment costs, 79 percent of interviewees said they’re confident these investments will grow.

Material preferences for RRP were mixed among respondents. While most favored rigid formats for durability and appearance, 67 percent reported they would opt for flexible materials for cost savings.


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