Global Packaging Supplier Industry Outlook
Posted by Raquel Mancia on Fri, Aug 12, 2011 @ 11:28 AM
The packaging industry is more optimistic about revenue growth over the next 12 months than for the previous year. This is despite a volatile oil market increasing raw material prices and pricing pressures. Flexible packaging is expected to be one of the fastest growing packaging sectors, driven by industry consolidation and sustainability initiatives.
Asia-Pacific will be a significant market during 2011–2012, with the top growth 
regions in the packaging industry including Singapore, China, South Korea
and India. Buyers consider price reductions and product innovation to be the leading actions for suppliers to secure business from buyers. Meanwhile, the ability to target specific audience niches, flexibility and the ability to generate leads are considered by packaging suppliers to be the most critical success factors. Suppliers can also invest in R&D and develop unique IT solutions to enable buyers to optimize their processes and reduce costs.
Optimism for revenue growth in the packaging industry
Over half of all respondents across the packaging industry are more optimistic
about revenue growth for their company over the next 12 months than for the
previous year. Reasons behind this trend include strong growth in emerging
markets such as India and China, decreased global economic uncertainty, a rise in
sales innovation and increasing production and process efficiency. Flexible packaging is expected to be one of the fastest growing packaging sectors, driven by industry consolidation and sustainability initiatives. In addition, technological developments such as improved recycling techniques and the development of compostable packaging materials have helped to increase the profitability expectations of industry respondents.
Volatile oil market of concern
Raw material prices, pricing pressures and cost containment are the most pressing immediate business concerns for the global packaging industry. This is largely due to recent volatility in the oil market, which has pushed up operating costs. Companies are therefore taking various measures to contain costs, including investment in sophisticated technologies such as robotics to increase efficiency.
Asia-Pacific a key region
The top growth regions in the packaging industry include Singapore, China, South Korea and India. Increased domestic and regional consumption, driven by strong economic growth, in the Asia-Pacific region has increased the demand for packaging in countries such as Singapore,
while buyers and suppliers consider India and China to be the two most important markets for potential growth.
Targeting specific markets key to supplier success
The ability to target specific audience niches, flexibility and the ability to generate leads are considered by packaging suppliers to be the most critical success factors. At present, most companies prefer to focus their marketing strategy on a narrow target market of prospective customers instead of the total market. Similarly, flexibility in customizing services is identified as the most crucial factor for business continuity. Therefore, companies are trying to bring more flexibility, scalability, extensibility and integration across the distribution channels. This encourages collaborative relationships with partners. Many companies have realized that customizing the sales process ensures conformity with customer buying processes. Companies therefore look for value-adding products and services to attract customer attention.
Buyers expect low prices and innovative products
Buyers consider price reductions and product innovation to be the leading actions for suppliers to secure business from buyers, as expressed by half of respondents. Improving customer service and the reduction of costs are also given high importance by buyers, with 45% of respondents giving a positive response to each factor. Suppliers can also invest in R&D and develop unique IT solutions to enable buyers to optimize their processes and reduce costs. One such example is the development of a cost optimization packaging system (COPS) by Singapore Institute of Standards and Industrial Research (SISIR's) packaging center, which will help buyer companies minimize their distribution costs by optimizing the use of space and packaging materials and rationalizing logistical costs.
About ICD Research:
ICD Research is a full-service global market research agency and premium business information brand specializing in industry analysis in a wide set of B2B and B2C markets. ICD Research has access to over 400 in-house analysts and journalists and a global media presence in over 30 professional markets enabling us to conduct unique and insightful research via our trusted business communities. Through its unique B2B and B2C research panels and access to key industry bodies, ICD Research delivers insightful and actionable analysis. The ICD Research survey capabilities grant readers access to the opinions and strategies of key business decision makers, industry experts and competitors as well as examining their actions surrounding business priorities.
For more information on this report, click here.