Where does the converting industry think it’s headed in 2010-2011? A new report out from ICD Research shows a positive tone for the global packaging buying and supplying industry this year and next versus 2009. The study, based on the opinions of more than 450 packaging executives at CPGs, converters and suppliers, was also reported on extensively in Packaging & Converting Intelligence.
Among the major factors impacting package converting:
- Sixty-two percent of converters are more optimistic about their companies’ revenue growth now than in 2009; roughly the same number (27 percent) are neutral; and only 11 percent are less optimistic. That last one is down significantly from 31 percent of converters who were pessimistic about any revenue increases last year.
- The majority of respondents identified Brazil, India and China to be the fastest-growing markets in the next 12 months among emerging economies. This will be due to favorable economic conditions, strong growth of the food-processing field and a greater presence by a higher number of multinational CPGs and converters.
- The fastest-growing developed regions for converters? The US, Singapore, Taiwan and Hong Kong.
- The majority of packaging companies (CPGs and converters) will be increasing their procurement spending throughout 2010. The average size of global annual procurement budgets among them is US$62 million.
- What will offer the greatest growth potential? Follow the buzzwords: Respondents were all big on biodegradable, recyclable and smart packaging.
- Sixty-four percent of packaging-industry buyers agree that to maintain and win their business, suppliers will have to be great innovators in terms of products and services.
- What will CPGs invest heavily in this year? Package design/branding and sustainability.
My Thoughts: Overall, this report puts a decidedly happy face on the global packaging field for the next 18 months. Not surprising compared to what we’ve all been through the previous year and a half. Still, what to make of the happy news? Yes, companies are spending again. Yes, they’re spending it where the global downturn was least felt (or hardly felt at all; i.e. China). And yes, they’re spending on the trendy things (has it ever been any different?).
But, the question remains, how do you get customers to spend money with YOU? By focusing on what always matters in the end—saving them money. Almost two-thirds of CPGs rated “responding to price pressure” as their most-important business issue now and into 2011. Key into their other time-tested buzzwords: “cost containment,” “waste reduction,” “budget control” and “price reviews.” Any smart customer is open to the adage about spending money to make money. Your job in the brewing recovery is to show them the truth behind that concept. How much money can you make for THEM by spending some it with YOU?