Describe the onset of lockdown in March 2020 and how the company adjusted.
Simon Hamer, Coveris: The challenge was to secure raw material supplies as initial volumes surged, creating longer supply chains and challenges with logistics. Information sharing was key in providing reassurance to our workforce and customers, that we were in a fit state to support through challenging times.
Stephen Langstaff, Innovia Films: When it became clear that lockdown was going to happen, we installed stringent Covid-19 measures throughout the plant and offices to ensure the Wigton site could continue to achieve high production rates to meet customer orders whilst maintaining the safety of employees.
Alastair Bearman, Chadwicks of Bury: We experienced surges in demand for lidding for products sold in the retail sector, particularly for dairy products such as yoghurt that are usually eaten at home, whereas business with the hospitality trade collapsed.
Andrew Newbold, Wipak UK: The pandemic saw consumer habits change overnight, with an increased demand for sophisticated, high barrier films which kept essential food products safe. As a trusted supplier to the food industry, it was essential for us to maintain short lead times, and to keep our quality and service levels high.
Paula Birch, Parkside: The initial outbreak and subsequent lockdown saw a surge in demand for packaged food products as the hospitality sector closed down, meaning our operations continued at full capacity. We navigated through the last 12 months as normally as possible while adhering to government guidelines. We also continued our innovative work in sustainable packaging solutions in preparation for life beyond the pandemic.
How was trading in 2020?
Simon Hamer: As a supplier of essential food and medical packaging, many of customers experienced volume growth due to increased demand as well as a rise in online shopping. On the other hand, some of our customers were negatively impacted by the pandemic – especially those servicing the hospitality sector. Overall, the demand shape changed however the overall impact was neutral. We did experience growth in new markets through the manufacture and supply of Covid-19 testing kits and new medical solutions.
Stephen Langstaff: Overall we experienced a higher demand for our packaging and labelling BOPP films due to panic buying and a change in consumer perception of flexible plastic packaging. People realised plastic film not only preserves the contents and extends shelf life, reducing food waste but also acts as a key safety barrier from possible external contamination.
Alastair Bearman: The company was approximately 10% ahead of budget, largely due to the increase in existing product areas. We also had new customers on board who wanted to shorten their supply chain.
Andrew Newbold: The increased demand for our products, combined with our short lead times, high quality and impressive service levels, resulted in a 30% growth in sales. This played a key role in us securing a multi-million-pound machinery investment from the wider company.
Paula Birch: The business continues to balance volumes across its traditional flexible packaging work in tobacco into various new food categories and packaging applications. Interestingly, 2020 saw continued growth in the tobacco sector and further development in the company’s sustainable packaging range, including new recyclable and compostable packs.
Did Brexit and border delays have an impact and are these still an issue?
Simon Hamer: Apart from in-bound logistics challenges and early border delays, there has been little impact from Brexit thus far. Coveris has been able to switch some manufacturing to alternative sites in order to lessen Brexit risk
Stephen Langstaff: A Brexit deal was good news for us as Europe is a major market. We did a lot of work in advance of the deadline to ensure we were well prepared. However, we were impacted by some delays in the first few months of the year, particularly with grouped loads. Thankfully, these issues have been ironed out and our deliveries are back on track.
Alastair Bearman: Yes, we have experienced issues with exporting, goods being delayed in customs and delivery times lengthening, but thankfully this is gradually getting better.
Andrew Newbold: Brexit had its challenges, but because of how we’re positioned within the European-based and multinational Wipak Group, we were able to work through the border issues without impacting our customers.
Paula Birch: Brexit is impacting British business transformation, but the full severity is still relatively unknown. New lengthy customs procedures which have created lengthy border delays and a potential slowdown in recycling progress resulting from Brexit, pose significant challenges for the British packaging industry. Brexit has also resulted in soaring logistics costs and increasing substrate prices. However, brands have an opportunity to place a greater emphasis on domestic manufacturing operations.
How has trading been so far this year and are you expecting to hit forecast for 2021?
Simon Hamer: Trading has been strong so far with forecast on target, driven by new market and material opportunities for laminate replacement and the introduction of recyclable, PE mono grades across most market segments. We still remain optimistic that with the easing of lockdown, our customers who service hospitality, will enjoy a resumption of meaningful trading.
Stephen Langstaff: Trading so far this year has been good, and we anticipate hitting our 2021 sales budget.
Alastair Bearman: Trading in 2021 is strong and we are expecting double digit percentage growth this year.
Andrew Newbold: After the growth we experienced in 2020, 2021 has been very much focused on the machinery investment project and the preparations needed to ensure installation runs smoothly. I’m pleased to report the project is on track and the new machines are forecast to be operational in quarter four as planned.
Paula Birch: After the tumultuous nature of 2020, 2021 has begun at a fast pace, with existing and new customers requesting innovative sustainable, flexible packaging solutions that address current and emerging consumer trends. We fully expect to hit our forecasts in the remainder of 2021 and beyond, further attesting to the strength and stability of the business.
What’s your strategy for 2021?
Simon Hamer: We are integrating Four04 following its recent acquisition – there are opportunities in core produce, bakery and confectionery markets. We are also supporting customers’ move from hard-to-recycle plastics and mixed laminates to mono-material solutions through our MonoFlex range. Coveris’ Food Science team have recently supported the launch of our recyclable MonoFlexLite HP flow wrap that works in combination with existing Freshlife MMP technology to manage moisture, improve freshness and extend shelf life by up to four days. Capex is still scheduled for continuous improvement, environmental targets and product development.
Stephen Langstaff: Throughout the pandemic we have had several investment projects underway using tight Covid protocols. This has included replacing all our slitting machines, upgrading lighting and temperature controls and commencing work on installing a new boiler plant. Future large-scale investments are in the pipeline to support further growth.
Alastair Bearman: We continue to move forward and look for new opportunities to improve what we are doing. Recently, we invested in a new printing press which will significantly increase production capacity and we are in the process of upgrading an existing machine. We have also added new staff to cope with increased demand.
Andrew Newbold: With an aim to achieve carbon neutrality in 2025, we’ve invested £5m in advanced conversion equipment which will produce flexible packaging solutions with significantly less plastic, a lower carbon footprint and which are easier to recycle. This gives a very clear message of the Wipak Group’s commitment to the UK packaging industry and belief in UK manufacturing capabilities at this time.
Paula Birch: We will continue to invest in core equipment to support that strategy further, delivering speed-to-market for clients, as well as world-class innovative products and services. We will continue to expand and restructure our teams when the market or business calls for it. Demand for hygienic, safe and convenient packaging is growing, and as a result, we have been investing in our production of high barrier and sustainable flexible packaging solutions at the facility. We are also now targeting more categories within the APAC food and sector.
What new print technology has caught your eye?
Simon Hamer: We are investing in technology that improves the efficiency in our core print process, flexography and have made significant improvements in this area. At the moment, we believe that digital for flexibles is not yet viable, however we believe we will be able to invest in this area in the near future as print speeds improve.
Stephen Langstaff: While Innovia Films does not undertake any printing, we do ensure that our films are printable using a variety of print technologies.
Alastair Bearman: UV flexo continues to offer high quality print at very competitive costs. It is an extremely cost effective solution on small to medium length print runs.
Andrew Newbold: We’re always assessing and evaluating new technologies, and already boast an impressive collection of state-of-the art and sophisticated print equipment. In 2017, the Wipak Group launched ‘ProDirect’, which combines high-quality digital printing with wide web, high performance paper laminates, and offers direct-to-market, customisable packaging solutions at an industrial scale for our customers.
Paula Birch: We are focused on maximising excellence in our flexographic printing but are always keeping an eye on the latest technology developments to drive our innovation pipeline and our operational efficiency. Our latest investments have been in laser perforation in the main and we continue to investigate the latest drying technologies to support our quality and speed requirements.
How is the industry responding to sustainability issues surrounding flexible plastic packaging?
Simon Hamer: We want to see more simplification of materials – the move away from mixed laminates and hard-to-recycle plastics. Retailers are driving sea change on material recyclability with instore soft plastic recycling schemes at a faster rate than government infrastructure. The Plastics Tax 2022 is the next challenge plus the availability of food safe PCR films to offset tax. We have recently launched a rPET lidding film for Berry Gardens leading the way on this. Added to this, Coveris has challenged itself with a comprehensive sustainability agenda of ‘NO WASTE’ – fighting waste in all its forms to ensure a more sustainable future.
Stephen Langstaff: The packaging industry is investing significantly to become more environmentally friendly. The current trends are the reduction of packaging material, thinner films or films with renewable content or recycled content that can help the manufacturer reduce their carbon footprint. They are realigning its products and solutions to meet changing consumer demands, without sacrificing food safety and shelf life. That includes Innovia Films.
Alastair Bearman: Looking forward to the UK tax on plastic packaging in 2022, there is growing interest in adding recycled content into packaging and in response to this, Chadwicks has developed recycled content white (30%) and clear (50%) rPET lidding. These lids offer the same functionality and optical properties as standard lids.
Andrew Newbold: Shifting consumer perceptions saw greenwashing claims rise. True innovation is needed to address sustainability challenges, and to achieve a measurable impact, we need to be disruptive and think outside the box. There are some real and constructive initiatives coming through now, and we’re excited to be a part of this movement with our existing portfolio and the machinery investment.
Paula Birch: No one is saying that solutions like compostable packaging are a fail-safe answer to all modern-day packaging problems, but what the approach offers is a viable end-of-life solution to non-recyclable flexible packaging designs that currently end up in landfill or incineration environments. The industry needs to be more proactive in educating the end-user and amplify the overall benefits of packaging – protection and preservation of goods, for example carbon) if we are to move the sustainability dialogue forwards in a meaningful way.
What is your message to the industry?
Simon Hamer: We will continue to support our customers to the hilt. Security of supply, flexibility and reliable service are the lifeblood to ensure our customers have products available for sale.
Stephen Langstaff: The industry continues to evolve at a significant rate driven primarily by the war on plastics, although the pandemic has managed to make change more difficult. However, as we climb out of the crisis innovation will be even more important than ever.
Alastair Bearman: Be adaptable and go with the flow.
Andrew Newbold: There seems to be light at the end of the tunnel and it is critical to deliver a green recovery. To future-proof our industry and to drive a circular economy, we need to develop real, sustainable solutions and play our part in green initiatives that stretch across the entire value chain.
Paula Birch: We would love to see the sector come together, including designers, pre-press, suppliers, converters, retailers, and even consumers.
THIS MONTH’S INDUSTRY EXPERTS
Simon Hamer is managing director, UK Flexibles of Coveris – the €315m global flexible packaging company. It supplies packaging for fresh produce, bakery, dairy, ambient and long-shelf life, pet food, and the medical sector.
Stephen Langstaff is business manager packaging and industrials at Innovia Films, the €390m speciality Biaxially Oriented Polypropylene (BOPP) films producer. The firm uses proprietary ‘Bubble’, Stenter technology and Cast manufacturing processes.
Alastair Bearman is sales and marketing director at Chadwicks of Bury – one of six companies within the Clondalkin Group operating throughout Europe. Chadwicks of Bury is a leading producer of pre-cut lid and shrink sleeves.
Andrew Newbold, is managing director at Wipak UK. The company specialises in high barrier films for food products and has as established its position through continued investment in manufacturing capability, new product development, design, and high service culture.
Paula Birch is global sales director at Parkside, the £50m business manufacturing flexible and compostable packaging solutions for the food and drink, personal and household care and tobacco sectors, with sites in both the UK (Normanton, West Yorkshire) and Asia.