Pack it up! – Industry Report on Packaging Service Providers

Jennifer Nietz - Manager of Operations

May 2013 – Packaging services providers support the manufacturing industry in multiple ways; this can be by providing materials, equipment, and technology that directly impact the packaging process. You may be a current manufacture of goods that would be looking for some assistance in your packaging operations or you could be a packaging service provider; either way the outlook is in your favor…

As you may have experienced the industry has been steady over the last five years as consumer spending has stabilized. However, what we are expecting to see is an increase in household disposable income resulting in the steady growth of consumer spending and demand. IBISWorld is predicting annual growth as high as 5% annually over the next five years. While the demand and growth of the industry will be present, it is expected that firms will undergo consolidation and take advantage of economies of scale.

COACT works with several firms that provide packaging services and materials. We are starting to see an increase in demand for outsourced providers to provide packaging materials as well as consult on solutions around packaging operations. Manufacturers are looking at ways to reduce overall packaging spend or invest in automation to help improve on the packaging process. We are also finding that in the markets we are calling into that these providers are branding themselves to stand out; making themselves unique to their markets. Here are some areas that will be necessary to maintain market share:

  1. Price – we know your margins are extremely low and everyone wants the lowest price. Make sure you have the appropriate measures in place to help control your cost with margins so slim. Extra attention in this area will insure that you are priced to compete but also priced to increase your revenue.
  2. Market/Industry Outreach – Are you diversified enough? If you are working with manufacturers in a variety of industries, you are in a good place. Don’t rest your business in one industry or market. Make sure that your product offering speaks to a variety of different industries for long term success; areas of industry growth include food, consumer goods, generic pharmaceuticals, and automotive.
  3. Experienced Workforce – Do you have a workforce that has special skills? Make sure you have a diversified workforce that can provide your clients with different services ranging from consulting to equipment repair.
  4. Accessibility – Be accessible to your clients and future prospects. Most packaging providers are integrating an ecommerce section on their website to handle quick orders. We are finding our clients that make themselves accessible to their prospects through interactive online tools and participation in industry events will help growth and build trust. Utilize your online presence and stand out with an interactive and creative webpage.