Outward improvement

1 March 2005 (Last Updated March 1st, 2005 18:30)

Once the poor relation of the packaging world, contract packing has seen itself develop into an efficient means of creating variation. With several advantages becoming apparent, Will North explains just why contract packing has grown into a dynamic and flexible alternative.

In the past, many brand owners and manufacturers have viewed contract or outsourced packing as a poor alternative to in-house production. However, this approach is increasingly being seen as out dated. Modern contract packers can offer a range of services to businesses of all sizes, from start-ups through to multinational brands that can allow them to make the most of their packaging budgets.

In many production plants, the range of equipment and expertise available to manufacturers will be limited - production may be geared up for flexible packages, for example, and not for cartonboard. Rather than investing in new equipment and staff, a manufacturer seeking to use new packaging types or printing methods can make use of the diversity of services offered by contract packers.

This range of services can be a vital resource for manufacturers. Whether a brand owner is looking to promote an established product with a short run in a new packaging style or is developing an entirely new look for a product, contract packers can help. Contract packers can also be an important tool when demand outstrips in-house capacity, whether because of line closures for maintenance, or because of a surge in consumer demand.

The contract packing industry doesn't just serve established brands however. As Rodney Steel, chief executive of the British Contract Manufacturers and Packers Asso-ciation (BCMPA) explains, 'Many new businesses question whether they should invest in their own production facilities or outsource. They should consider what it is they want to do as a business: do they want to invest their efforts in running a production and packaging facility, or do they want to be free to focus on developing new products?'

Once manufacturers have taken the decision to outsource their packing requirements, they will need to find contract packer to meet their needs. The Contract Packaging Association (CPA) recommends a series of points to consider. Firstly, is the packer equipped for the job required? That is, not only does it have the equipment the brand owner needs, but is does it have experience in this field, a proven track record of repeat orders, skilled and trained staff, and the financial strength to take on a project of the size required.

Using an outsourced service should be thought of as an ongoing partnership, not merely a question of picking a supplier once and then living with that decision. Manufacturers should ensure that they are able to establish good lines of communication with the packer, so that they instructions are clearly understood, and ideas can flow freely.

Finally, manufacturers should consider the location of the packer. Transport costs have consistently been shown to have a major impact on the final price of retail goods. By carefully deciding whether to work with a packer close to a manufacturing plant, or to use a range of packers serving diverse geographic markets, brand owners can chip away at these costs, improve margins, and give themselves the freedom to offer goods more competitively to consumers.

Identifying respectability

Working with a respected contract packing trade association can cut the time and cost involved in identifying a suitable contract packer. In the USA, the CPA, has an established track record in promoting contract packing and matching packers with brand owners. Its website, www.contractpackaging.org, provides vital information for brand owners and offers a useful search tool for finding suitable contract packing suppliers.

Brand owners in the UK should refer to the BCMPA (www.bcmpa.org.uk). It was established more than four years ago by a group of contract packing company executives in order to raise the profile of the contract packing industry. At this time, there was concern that many brandowners viewed contract packing as a second best to in house packing.

The new association was based out of the Institute of Packaging's (IOP) offices in Melton Mowbray, UK, and its administration managed on a part-time basis by an IOP staff member. At this point, the association's prime focus was on marketing and building the reputation of the industry among brandowners.

As the association grew in size and ambition, a decision was taken in 2003 to appoint a full-time chief executive. Rodney Steel, a veteran contract packer with over 20 years experience running his own contract business, joined the association as chief executive in 2003. The association now has its own headquarters in Old Amersham in Buckinghamshire, and has expanded the services it offers to its members and their clients.

The BCMPA now has more than 50 members, and acts as a link between brand owners and contract packers. Brand owners seeking to identify a contract packer to meet their needs can consult the association's online list of members. The listings can help brand owners to find BCMPA members offering services in chemicals, cosmetics and toiletries, pharmaceutical, food and beverage, and general packing. Brand owners can also easily search for packers by location.

The BCMPA doesn't just play a passive role in matching brand owners with packers. The association will also happily consult with brand owners to create a short project brief, which can then be circulated to BCMPA members. As briefs can be distributed anonymously, and the association can direct responses from members to potential customers, this service is ideal for brand owners seeking to use contract packers for pilot runs of new products.

The association has continued its efforts to raise the profile of outsourced packing. As well as contributing to articles in the packaging press, it has worked with the media in the key industry sectors in which its members work, and has hosted pavilions at some of the most important trade shows. At Total in March 2004 the BCMPA pavilion hosted displays from 17 members, and at this autumn's Packaging Innovations Show in Birmingham the BCMPA expects to have up to 20 of its members in attendance.