Where packaging CEOs see the industry going in 2013

Canadean’s just-released report, “Global Packaging Industry CEO Business Outlook Survey 2012-2013,” provides plenty of insight into how procurement expenditures, business strategies and practices will change in the coming year. The data is drawn from the research group’s  exclusive panel of packaging-industry C-level executives.

Among the report’s highlights:

  • Respondents expect increased levels of consolidation, with 61% anticipating that there will be either a “significant increase” or an “increase” in mergers and acquisitions over the next 12 months.
  • Large packaging companies are seeking small and specialized companies to strengthen their core competencies, reduce costs and resist competition with their enriched product mix. The higher expected levels of consolidation is also due to new cost or demand pressures, repayment of debts, the potential need to meet new compliance procedures or gain quick access to new markets, business expansion and attempts to increase market share.
  • Global packaging respondents identify China as the most important region for growth among emerging markets, along with India and the Middle East. There has been significant growth in the aseptic-packaging sector in China, driven by a rise in technological sophistication.
  • Fifty-six percent rate “raw-material prices” as the most important business concern in 2012, while 54% and 46% highlight “responding to pricing pressure” and “cost containment,” respectively.
  • The average size of  global annual procurement budgets among respondents is forecasted at US$85 million this year. In addition, the survey shows procurement expenditures will rise by 11.5% over the next 12 months.
  • “Quality,” “level of service” and “price” are considered very important factors for respondents when selecting a supplier, whereas “supplier’s environmental record,” “supplier’s CSR reputation” and “proximity of supplier operations” are least-important factors.
  • “New product development,” “IT infrastructure development” and “machinery and equipment purchases” will get significant increases in capital expenditures in the coming year. In particular, 67% of respondents project increased investment in “IT infrastructure.”
  • When it comes to advertising budgets, “email and newsletters,” “social media and networking sites” and “public relations” are expected to register the highest investment, identified by 47%, 44%, and 36%, respectively. Conversely, “television,” “outdoor,” “radio” and “newspaper” advertising is expected to decline.

My Thoughts: More M&As, China and raw-material prices should come as no surprise as top trends and concerns for packaging CEOs going into 2013. They lead the lists of many manufacturing industries all over the globe. What is nice to see is the 11% projected increase in procurement budgets for next year. Also, note that despite all the “eco talk,” quality, service and price still reign supreme when choosing a supplier. And, it’s telling that “new media” along with “good old-fashioned PR” will get more ad dollars at the expense of traditional print and TV/radio.

This entry was posted in flexible packaging, labels, paper/paperboard/cartons, sustainability and tagged , , , , , , , , , . Bookmark the permalink.

1 Response to Where packaging CEOs see the industry going in 2013

  1. Pingback: Where packaging CEOs see the industry going in 2013 | Converting Guide

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