ANAHEIM, CALIF. — Contract packagers are finding growth opportunities, but must cope with price pressures, according to firms interviewed at Westpack, held Sept. 23-25 in Anaheim.
``More of the [consumer products] companies don't have facilities to run their needs,'' said Etta D'Ura, sales project manager for Paco Pharmaceutical Services Inc. ``They need an outside source to manufacture more. We do the exact same thing as the company.''
Paco employs 1,200-1,400 at plants in Lakewood, N.J., and Canovanas, Puerto Rico. The company, acquired by West Co. of Lionville, Pa., in 1995, makes liquids and blow fills and seals packages, principally for pharmaceutical and biotechnology customers.
Companies, particularly in cosmetics and hair care, want a one-stop packaging shop, said Brian Robinson, who handles inside sales for Aaron Thomas Co.
``They don't have to procure the product themselves [or] control their inventories. They can use a contract packager for fulfillment from beginning to end.''
Two customers ``have been able to get rid of departments'' and direct the packager to procure containers, boxes and liquid products from a list of approved vendors and drop-ship the goods, Robinson said.
``They don't even have to see their own product,'' he added.
On Dec. 1, the firm plans to take ownership of a 207,000-square-foot building in Garden Grove, Calif., and, in time, boost employment to 225 from about 125-150. The firm currently leases about 125,000 square feet there.
Aaron Thomas also operates a 75,000-square-foot Memphis, Tenn., contract packaging and warehouse facility.
Pack Right & Outsource Services in Chino, Calif., finds customers are most interested in price competitiveness, said co-owner Jeannie Mollenauer. Four increases in the minimum wage have had a big impact, particularly when competing with products made in China or Sri Lanka.
``The global market is not a level playing field,'' she said.
The contract packager and labor-intensive fulfillment service employs 20-70 and performs blister packaging, shrink wrapping and hang-tag tasks for large corporations and entrepreneurial inventors.
End users want ``durability, price [and] clarity, in that order,'' from film suppliers, and have realized improvement on the clarity, said Craig Johnson, head of Corporate Packaging & Promotions in Cerritos, Calif.
The firm employs 60 and supplies mostly to club stores. Users want better exposure for their products and do not want opaque film, he said.
Companies want contract packagers ``to maintain quality at a much higher speed'' than years ago, said Peter Vajtay, sales manager with SLM Manufacturing Corp. in Somerset, N.J.
SLM employs 30, designs and makes plastic packaging and, in early 1996, began devoting some resources to a contract function that now packages Levolor Corp. and Springs Industries Inc. window fashions. The firm cautiously accepts packaging projects .
``We will not accept a job if we don't think we can maintain quality along with the turnaround time,'' he said.