Dairy innovation offers hope for UK packaging industry
due to an influx of packaging firms from the EU. But could
innovation within the UK dairy sector represent a source of
untapped packaging potential for UK firms?
Alan Kinnear of the British Packaging Institute certainly believes so. He claims that the four main dairy categories - cheese, milk, yoghurt, and spreads - could be integral to the future success of the packaging industry, due to their wide appeal across a number of different consumer groups and their growth potential.
And fundamentally, the packaging potential of these future growth categories has yet to be fully explored.
"With the exception of imported cheese, packaging for the dairy industry is still very much lacking in imagination," he said. "The main ways it can benefit the packaging industry in the long-term is through the provision of more innovative packaging solutions and by responding to the need for both increased product choice and the need for more innovative dairy products - the development of functional ingredients, for example."
The UK packaging industry, which operates in a market described as 'flat' by the Packaging Federation, should be looking at these dairy sectors with great interest. According to a Market Business Development (MBD) report, the UK food and drinks packaging market has already declined by 6 per cent over 1999-2003 to £5.7 billion.
New markets are therefore vital for the industry's long-tem survival, and the dairy sector looks as good a bet as any. Changing demographics indicate an ageing population and a rise in single or two person households. This should result in a buoyant market in packaging tailored towards the individual consumer, something the dairy sector is keen to impress upon.
Shrinkwrap, a medium sized UK packaging solutions firm, which counts Unique Prepared Foods (formerly Eden Vale) among its clients, claims that 50 per cent of its turnover is generated through dairy orientated packaging contracts.
Debbie Frith, business development manager at Shrinkwrap, claims that many UK food packaging firms are continuing to seek inspiration for growth from further afield, away from the already consolidated UK domestic market. Market research earmarks France and Sweden as areas for future development.
"Providers of packaging solutions may collectively shift their manufacturing focus away from the UK, as at present the majority of components are sourced from European manufacturers through UK based distributors, then assembled and manufactured in situ abroad. The need for sustainability, as oppose to one off projects, will also form part of future strategic developments for the food packaging industry," Frith commented.
At present, all of the packaging equipment lines at Shrinkwrap are made to specification, something which will soon be subject to change. "Producers of dairy categories will undoubtedly turn to generic, 'off the shelf' models, in a bid to reduce capital layout costs and, most importantly, strengthen profit margins," said Frith.
In any case, the medium-long term outlook for the UK packaging sector suggests that the industry will be in a position to take advantage of these opportunities. MBD predicts an overall market value increase of 3 per cent through 2004 to 2008, which could result in a turnover of £5.9 billion.
This would be good news not just for providers of packaging solutions, but also for the general health of the UK economy. The collective packaging industry generates in excess of 1 per cent of the UK's annual gross domestic product (GDP).
