How might we better define and predict what packaging opportunities might exist in the next business cycle?

Some recent studies from the London School of Economics, as reported on the BBC, find that while packaging is a leading indicator for industrial activity, it is also a lagging indicator of social trends in that brand names and identity markings gain in power as they mature because of the length of time they remain in the consumer's memory. Older buyers may prefer the traditional shape, color, or material of a package while more cutting edge style grab younger consumers. If packaging fails to appeal to both taste the product can lose out on new adherents or end up discarding aging yet loyal buyers.

One constant theme in the discussions about the future is that scarcity is a primary driver of technology and product changes. In the industrial regions (the EU, North America and East Asia) primary scarcity items are space, energy, and skilled workers. These impact packaging in terms of quantity, use and production. In addition, packaging in particular is driven by social trends, customs and beliefs. According to the BBC report, social trends follow needs and, except for minor fads, trends come from the underlying fundamentals of an economy.

The economic fundamentals for cars, for example, are not the same as for industrial production. When the underlying fundamentals of the societies are different, the motivation for adopting new technologies or products is minimal.

The question we need to ask is do our primary business groupings — folding carton, food container, corrugated containers — share common fundamentals with other regions of the world, or are they different? The global paper industry, including the U.S. and Canada, followed the lead of the Scandinavian/Finnish paper industries adopting the production technologies of Europe. This has served them well for nearly 40 years, but the future is uncertain as fundamentals in that industry change.

Corrugated containers are universal in use, but without question the U.S. leads that field in terms of quality because of its excellent fiber source for the containerboard. However, there are not enough products manufactured in the U.S. to fill all of the corrugated containers. On the other hand, Asia can fill the containers with products, but the containers are made from secondary fiber in almost every case.

In the folding box arena, the global economy and global marketing of products has created a market for a high-end boxes with finishes and printing that are works of art. Europe, Asia and North America all have strong folding box industries with a high degree of commonality between them in terms of production machinery.

In addition to the high-end boxes, the plain folding carton made of C1S is the staple of retail products around the world. Paper-based food packaging, especially for drinks, is much more common in Europe than in North America and is a trend to watch. The fundamentals for it are unclear, but the need for products that maximize space during shipment and storage is certainly a factor. Smaller unit sizes for products — focusing on the single serving concept for packaging is another European and Japanese trend that may be crossing the oceans to North America.

In the months ahead I will look at some of the issues of production technology and how effectively production methods and equipment for paper packing be transferred between the major packaging production regions.