(Nov. 6, 2006) — As I walked around the recent Pack Expo trade show at Chicago's McCormick Place, observing the frenzied pace of people walking among the new technologies, all of the hustle and bustle illustrated a salient fact: The packaging sector is changing more rapidly than any of us can imagine.
Global competition is fierce, especially as mega-retailers led by Wal-Mart Stores Inc. hand down their manifests for how they want their products packaged, both on the shelves and at the points of distribution.
Green was a clear theme at the show. Attendees talked about polylactic acid and the potential for bioresins altering the way consumers use plastic. What applications will PLA tackle? For instance, can it be used successfully in shrink-sleeves?
The show reminded me of what it was like pulling together the state-of-the-market report on blow molding. Attempting to distill proved futile. The packaging sector, including blow molding, is being affected by myriad factors that make the business daunting and exhilarating at the same time.
Some factors affecting everyone include raw material pricing; the need for speed to market; assuaging consumer tastes, which are subject to change at a moment's notice; and of course, logistical challenges, including freight costs.
Despite the chaos, clear themes did arise in attempting to discern the state of the blow molding market in both the bottling and industrial sectors.
Industrial blow molders are worried about the impact of new fuel-tank regulations under the California Air Resources Board and the U.S. Environmental Protection Agency. This was a clear theme at this year's NPE, too, and machinery officials showcased machines to help processors address the problem. How is your firm dealing with these new regulations?
Demand for blow molded bottles is growing, especially in applications like dairy and water and the market for single-serve beverages. This was supported by my interviews for the blow molding report and on the show floor at Pack Expo.
We have covered many blow molding plant closings this year, but we've also covered some exciting projects with new plants being established. We've outlined some of those in this week's issue, and we hope you'll keep us abreast of any other changes in your own operations.
Both the industrial and the bottle sectors will be further impacted by mergers and acquisitions, including activity from strategic and financial buyers.
According to one M&A source, international firms will continue to be active as well. Foreign participants were involved in 63 percent of the 183 deals completed in the first half of 2006, according to Blaige & Co. of Chicago.
Like any trade show, Pack Expo illustrated that change is industry's only constant. If you're not keeping your company at the forefront, survival may be your most difficult challenge.
Staff reporter Angie DeRosa's beat includes packaging.