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December 08, 2008 01:00 AM

Exhibitors court budget-minded show-goers

Dan Hockensmith
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    Despite a slight drop in attendance, the packaging industry executives gathered at Pack Expo 2008 were, in the words of one exhibitor, ``aggressively window shopping,'' amid fears the U.S. would enter 2009 in a full-blown recession.

    ``[Companies are] always looking for efficiency — anything they can get to increase productivity and value,'' said James Anderson, chairman of the Packaging Machinery Manufacturers Institute. Alexandria, Va.-based PMMI sponsored the biennial show, which drew about 44,000 attendees, roughly 3 percent less than in 2006. About 2,000 packaging companies bought space at the event, according to PMMI. The show and conference were held Nov. 9-13 in Chicago.

    On the show floor, many exhibitors highlighted budget-conscious products. Doug Lindemann, vice president and general manager of testing instruments maker Mocon Inc. of Minneapolis, said that's been a trend in recent years among his customers.

    ``We used to have a one-price-fits all approach, but over the last five years or so, our customers have asked us to have different price levels,'' he said.

    At the thermoforming machinery booth of Hyannis, Mass.-based Sencorp Inc., Eastern region account manager Robert Mozian said price was not a factor in the current U.S. economy.

    ``It's become a wait-and-see attitude. Companies are holding on to their capital until they absolutely have to add capacity. People are not spending their money,'' he said.

    Some companies at Pack Expo said they are concentrating on marketing current products rather than allocating precious research and development dollars to untried technologies.

    ``AET has been able to perform pretty well based on the market conditions. But we do realize that there are some tough situations in the economy right now. We'll see how things pan out, with the change in the presidency and some of the things that government's trying to put together,'' said Nick Levandusky, a spokesman for AET Films. The New Castle, Del.-based film unit of Applied Extrusion Technologies Inc. develops and produces specialized oriented polypropylene films used primarily in labeling and flexible packaging.

    Other flexible packaging manufacturers said the time is right for new breakthroughs. ``There's this big push on for source reduction, better barrier, simpler, lighter weight and a lot of that development moves in that direction moving from three-ply to two-ply and from two-ply to monolayer structures,'' said Eric Bartholomay, product development manager at Toray Plastics America Inc. The North Kingston, R.I., film extruder is part of Toray Industries Inc. of Tokyo, which will add capacity in 2009 in its European films operations to cope with increased customer demand, Bartholomay said.

    According to several flexible packaging and bottle manufacturers, buyers at Pack Expo asked a lot of questions about oxygen barriers. Retort pouches and large bags for pet food and agricultural uses also were hot topics. Sal Pellingra, innovation and marketing director at Cincinnati-based film producer Ampac Packaging LLC, said more and more of the major consumer product companies, mindful of cost and the eco-friendliness of their brands in consumers' minds, are buying his company's message about the advantages of plastic over paper and glass.

    ``From the sustainability side, with retort, you're replacing something that's rigid, that weighs 5 percent more than the flexible pouch that's replacing it. In the case of sauces, with breakage [of glass containers] … no more cleanup on aisle three.''

    Sustainability was the buzzword at Pack Expo 2008, with PMMI replacing detailed printed show directories with pocket guides and allowing some exhibitors to use a special green logo at their booths.

    At Clear Lam Packaging Inc.'s booth, several displays showcased the Elk Grove Village, Ill., company's specialty flexible and rigid plastic packaging, including its rigid roll stock. Louis Belmont, the firm's vice president of sales and marketing, said retailers and food manufacturers have been giving square-shaped roll stock packaging a lot of scrutiny, visualizing more stackability on shelves and trucks eliminated from their shipping schedules.

    Belmont said Clear Lam staff also received inquiries about bio-based packaging — but the questions clearly were led by price points. ``Wal-Mart and McDonald's and some of those types of buyers are looking long term; they know they want to replace petroleum products at some point,'' he said. But for now, the really key point has been light weighting.''

    The drive toward fitting more products on trucks has paid off for manufacturers of plastic intermediate bulk containers, several of whom were at Pack Expo. Peter Budney, vice president of marketing at Oconomowoc, Wis.-based Orbis Corp., said IBCs serve a twofold purpose.

    ``I think when you just look at the fact that reusable packaging multiuse is in and of itself a sustainable initiative. But there's also the secondary piece … we use recycled plastic materials within many of the products that we produce for the marketplace, so there's a sustainability piece in the reuse of the material as well as just the reuse of the containers that are out there,'' he said. ``Those two factors together provide benefits for many of our customers and the costs associated with disposal of non-useable expendable materials can be a cost justification in and of itself in making the switch to returnable packaging.''

    Pack Expo 2008 also was notable for the consolidation that has occurred in the plastics industry this decade, several attendees said.

    Reynolds Specialty Packaging's Robert Larson said, joking, that at an off-site cocktail party for about 100 packaging executives, lawyers and bankers, every packaging company in the room was for sale or looking to grow through acquisition.

    ``This is a tough time to be in this industry. There is a lot of overcapacity and until we can achieve a better balance of supply and demand, I think it's going to be very difficult,'' the president of the Lincolnshire, Ill.-based firm said. The next 12 to 24 months will be especially hard, due to the economic climate and a power shift in Washington. ``My personal perspective is once we get beyond this there will be further consolidation and candidly, I think there needs to be … before we can all get healthy.''

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