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“The Interface Between Cartons and Flexible Packaging” a Report Commissioned by Pro Carton

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“The Interface Between Cartons and Flexible Packaging” a Report Commissioned by Pro Carton Pro Carton The PRISM Study 2005 Usages of Cartons and Flexibles (All = 238 Billion Units) Paper Based Alu Foil Paper Foil Combinations 15 9 12 Folding Cartons 40% = 95 Billion Flexible Packaging (Plastic Based) 45% = 107 Billion “The Interface between Cartons and Flexible Packaging” A Report Commissioned by Pro Carton End Users’ Packaging Preferences for a New Premium Product % of FMCG Companies No Preference Cartons 32% 57% Flexibles 11 % Association of European Cartonboard and Carton Manufacturers Pro Carton The PRISM Study 2005 “The Interface between Cartons and Flexible Packaging” Index Introduction Franz Rappold, President of Pro Carton Page 3 Overview of the study Richard Dalgleish, Managing Director of Pro Carton Page 4 Key findings from the study Current market position Page 5 Market expectations up to 2010 Page 6 The perceptions and attitudes of brand owners and retailers Page 7 Shelf ready packaging Page 8 Consumer multi-packs Page 9 Microflute packaging Page 10 Sleeves and combination packaging Page 11 Quality perceptions Page 12 Purchasing intentions Page 13 Environmental issues Page 14 Contacts Contacts for further information Page 15 What is Pro Carton? Back page 2 Pro Carton The PRISM Study 2005 Introduction I am delighted to be able to present • What are the perceptions of this summary of the key points from the brand owners and the study commissioned by Pro retailers of these different Carton from PRISM*. types of packaging? We felt it was important that an • What are the key trends in independent study was carried out the markets? that would look at the interface be- tween cartons and flexible packaging • What are the purchasing and this report seeks to highlight intentions of FMCG companies? the main findings of this study. I feel sure that this summary provi- It is of course important that the best des an accurate and informative possible understanding is reached to review of the findings of this study find out more about the following which summarises the main fin- “We felt it was questions: dings. I therefore hope that you find important that an the information it contains both independent study • What is the current status interesting and useful and that it was carried out that in the markets for cartons offers additional information about would look at the and flexible packaging? this interesting and ever changing interface between sector of the packaging market. cartons and flexible • What are the prospects for packaging.” the future? Franz Rappold President Pro Carton Vienna, September 2005 * “PRISM – Packaging Research Intelligence Strategies & Marketing Limited – was launched in 2003 by Simon Southern following the acquisition of Marketpower Ltd by Landell Mills Ltd. The Company provides market research and strategic marketing consulting dedicated to the packaging industry.” 3 Pro Carton The PRISM Study 2005 Overview of the study Pro Carton is pleased to be able to ing is well placed to take advantage introduce a summary of a members of the growth opportunities in only report it has recently commis- European consumer goods markets. It “For this ambitious sioned. “The interface between car- closes by saying “Cartons offer brand qualitative and tons and flexible packaging” was owners the opportunity to provide quantitative report, commissioned from PRISM and looks product differentiation and a quality PRISM interviewed at the current market, the expecta- image using packaging that has 49 of the leading tions for the future and the percep- distinct merchandising advantages FMCG (Fast Moving tions of the major players in the and display appeal when compared Consumer Goods) market. with competing types of packaging”. companies across Europe as well as It also investigates the probable We hope you will find the following 10 leading retailers trends in the market and looks at pages interesting and if you need any and over 20 industry various developments that will further background please contact experts to gain an impact on both cartons and flexible Pro Carton either at insight into the packaging. By independently looking www.procarton.com or through your current market in depth at this market and the local office of which details can be breakdown and trends, carton suppliers will be found on page 15. trends that were better able to understand and react upcoming in the to the needs of the brand owners Richard Dalgleish next 10 years.” and retailers. Managing Director Pro Carton The report highlights the importance Brussels, of packaging as it adds to its con- September 2005 ventional role of protection and becomes in addition a medium of promotion and brand building. The report concludes that carton packag- 4 Pro Carton The PRISM Study 2005 Key finding Current market position The report begins by looking at the of paper based flexible packaging, current market position of cartons multi material packaging and other and flexible packaging in the FMCG smaller types. Therefore in the (Fast Moving Consumer Goods) mar- markets studied across Europe about kets. The product areas covered are 40% of the units are manufactured very wide and include all packaged from cartons whilst 45% are made food products with the exception of from wholly plastic flexible packag- fresh foods, liquid foods and pro- ing. Of the remainder cessed canned and bottled foods. It (15 %/36 billion) some 40% are also includes all non food consumer paper based packaging. products with the exception of consumer durables and industrial The report adds that in many pro- products. duct categories, switching between different types of material is not so In the European FMCG markets the apparent as had been the case some report states that approximately 238 years ago but this still occurs and billion units of cartons and flexible depends in some cases on the pro- packaging are used annually and of duct formulations. For example, these 95 billion are cartons. Of the recent moves from powders to remainder, 107 billion are entirely tablets in the detergent markets A change in the form of a product flexible plastic packaging with the have led to an increase in the usage in a field such as detergents may 36 cause a change in the type of remaining billion being made up of cartons at the expense of plastics. packaging used. Usage of Cartons and Flexible Paper Based Flexibles (Other Material) Packaging in Europe for FMCG Alu Foil Paper } 15%=36 Billion Units Billion Units Combinations Folding Cartons 95 15 9 Flexible Packaging 143 Bio. 12 Bio. Total 238 Bio. Folding Cartons Breakdown of Flexible 40% = 95 Billion Packaging into Types Billion Units Flexible Packaging Paper Based 15 (Plastic Based) 45%=107 Billion Aluminium, Foil and Paper 9 Aluminium Foil and Plastic Foil Combinations 12 Plastic Based 107 143 All = 238 Billion Units Usage of cartons and flexible Total package in Europe for FMCG. 5 Pro Carton The PRISM Study 2005 Key finding Market expectations The study finds that between 2005 perceptions of carton packaging, and 2010 the European market for this will have a positive impact on cartons will increase by approxima- carton usage. tely 1.8 % per annum. The market for flexible packaging will, over the Price pressure will continue but the same period increase by between report adds that the pressure on 1.5 % and 2 % per annum. prices for flexible packaging will remain high and on balance, in the As well as organic growth, it adds future, it appears that the effect of that there will be increases in the global oil prices and currency deve- market for cartons in several areas lopments will have a greater impact such as shelf ready packaging, on flexible packaging prices than on multi-packs and display packs. The the prices of folding cartons which need for improved visual appeal and are made from a naturally occurring • Demand for the requirements of shelf ready and renewable material. cartons will grow packaging will create particular opportunities for cartons made from Another change foreseen in the • Need for both cartonboard and microflute. report is the increasing focus on improved visual environmental issues and it conclu- appeal of Another area highlighted for growth des that the folding carton industry packaging in carton packaging is the own is well ahead of flexible packaging brand sector where retailers will on the two critical environmental • Increase in the continue to position their own brands issues, the use of a renewable need for shelf more directly in competition with resource and recyclability back to ready packaging, leading brands and with the quality new packaging. multi- and display-packs • Additional packaging demands from the growth in retail own brands • Increasing focus on environmental issues 6 Pro Carton The PRISM Study 2005 Key finding Perceptions and attitudes Overall there is a strong preference Flexibles are perceived to have better for cartons amongst the FMCG com- barrier properties but increasingly panies interviewed. The main reasons cartons are being combined with for this preference are the protection, flexibles in such markets as ready graphics and merchandising appeal meals and pet foods to offer both offered by folding cartons, their functionality and the point of sale environmental attributes and their attraction that cartons offer. It also suitability for differentiating pre- reports that almost a third of the mium products. respondents mention merchandising difficulties and relatively poor pro- The key factors influencing the choi- duct protection when using flexibles ce of packaging are display appeal, and 20% expressed concerns on packaging costs, speed of filling and environmental issues. merchandising/shelf stacking attri- butes. Folding cartons score well for The report states that when launch- all these features though cost is ing a new premium product, 57% of more favoured for flexible packag- FMCG companies prefer to do so in ing. However, many filling lines for cartons whereas only 11 % said they cartons such as tobacco and deter- would choose flexible packaging.
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