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Retailers Impact Flexible-Packaging Choices

New FPA study shows influence varies significantly.

By Editor in Chief Mark Spaulding -- Converting Magazine, 12/1/2005

Nothing is as easy as it looks at first glance. Yes, retailers do have an impact on how products are packaged, but that impact can vary significantly depending on what package format you're talking about, whether the product is a food, non-food or promotional item, what kind of retailer you ask, and even where in the store the person works.

To help sort out the confusion in this emerging trend, the Flexible Packaging Association (www.flexpack.org) commissioned West Lawn, PA-based Strategic Analysis, Inc., to survey retailers and consumer goods companies. The results for converters and their suppliers were presented Oct. 26 during FPA's Fall Executive Conference in Chicago.

Many of the changes to packaging, based on retailer influence, have to do with the shifting landscape of where consumers shop, says Bruce W. Deckman, president of Strategic Analysis. The market share of mass merchandisers and club stores will only grow over the next six years, the study shows, at the expense of traditional grocery and department stores (see chart at right). "Category killers," the retailing name for stores such as Barnes & Noble for books and Best Buy for electronics, will also see their share of business climb dramatically.

Going clubbing

Several flex-pack formats will benefit with the growth of Sam's Club, Costco and other club stores. Retailers' drive to decrease stocking costs and create a clean shelf appearance and billboard effects will demand more large- and small-unit multipacks. In addition, club packs uniting complementary products will become more prevalent. Consequently, shrink film and overwrap demand will rise.

As consumers buy more prepackaged deli, snack and vegetable platters, look for retailers to drive their food suppliers to provide more packaging with breathable films, film lidding and resealable bags. Even pharmaceuticals are being affected as lidding for blister packs will see more applications. In a rare instance, Wal-Mart asked for more blister packs for prescription drugs because it speeds the work of in-store pharmacists while it aids in dosage compliance, Deckman says.

The E-commerce Effect

The Strategic Analysis survey reveals that different flex-pack materials will either thrive or dive based on the retail application (see chart at left). The e-commerce effect of Internet and mail-order sales, forecasted to grow up to 20 percent a year, will particularly (and logically) benefit packaging bags, padded envelopes/bubble wrap and shrink sleeves. One example: Sales of prescription drugs rose 6 percent overall last year, but mail-order prescriptions grew 18 percent.

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