2018 looks destined to be another fascinating year for the UK packaging sector, with challenges and opportunities aplenty. Packaging Scotland recently asked three leading figures from different sections of the industry to predict what may lie in store for us over the next 12 months as well as their hopes for the year ahead.
Chris Kelly, MD of independent packaging supplier, The UPAC Group
SINCE Brexit the market has been in a strange place with very little consistency. After the initial flurry of raw material price increases caused by the devaluation of the pound, we witnessed a contraction in market growth, as confidence was knocked and fewer customers were making long-term commitments. However, 2017 was nothing like that, with price increases continuing relentlessly under the guise of supply and demand or raw material shortages.
Such price volatility can create opportunity for those companies big enough to adjust their buying volume and driven by first class customer service to increase their market share, as was the case with The UPAC Group, achieving record sales and growth of 17%. I see 2018 following a very similar pattern. In that respect we are forecasting another double digit growth year in 2018 for UPAC.
However, my concern is that the price increases are at risk of driving a significant number of end users out of the market altogether and this could ultimately lead to a recession.
The retail market is increasingly dominated by the large multiples that force suppliers into fixed price, fixed terms contracts. As raw material prices bite, these companies are unable to increase their prices and so are being squeezed (sometimes out of business altogether) and this cannot be good for the market’s continued long-term growth. We have been able to supplement the loss of these traditional retailers through the online market. However, again, with the price of cardboard continuing to rise, these online retailers are looking at alternate methods of packaging to reduce their costs.
In 2017 The UPAC Group consolidated three companies within the group: WM Watson Packaging; Peter Bryson Packaging; and The Colour Carton Company under one new 160,000 sqft building in Cardonald, Glasgow. The efficiencies this drove into the business have delivered savings of almost £500,000. It’s forward planning like this that will allow us to weather any market downturn. So, I would say we are going into 2018 hoping for another great year, but given the difficulties in any forward forecasting caused by Brexit we are ready for the worst.
Martin Kersh, executive director of the Foodservice Packaging Association
MY main hopes for 2018 are that governments will recognise the need to reform the Packaging Recovery Note (PRN) system – the intention of which will be to introduce far more money from businesses, with far more businesses contributing in order to build the recycling infrastructure that the UK needs.
There is nothing standing in the way of PRN reform other than getting government time and convincing people that this is a far better way of dealing with things than punishing the public.
I’m also looking for the development and introduction of a waste management infrastructure for all consumption on the go because there is no point cherry-picking individual products. What we need is to solve the whole thing, otherwise this time next year we’ll be looking at some other form of packaging – why don’t we just do the lot now?
What else I would be hoping for is to be involved in all the Scottish consultations that are taking place with regard to a deposit system and to paper cups. We welcome that and we will cooperate fully with any testing and any experimentation that takes place in Scotland. The Scottish Government has led this and we are very willing to participate.
I would say we’ve got a great opportunity to demonstrate to government and to society that we can give it exactly what it wants, at no cost to government and at no cost to the public. All of these consultations are our opportunity to prove that.
Stephen Anderson, business development executive for Label Apeel in Scotland
I’M predicting that 2018 is going to be an interesting year for brands and an exciting time to be involved in the Scottish beers, wines and spirits industry.
The last five years have seen the emergence of smaller brands with unique products and quirky branding. It started with craft beer, then we saw the same with gin and now whisky. Moving forward it’s going to be about brands that are brave, unique and of high quality. It’ll pay to be bold.
From a packaging point-of-view, 2018 will see the real coming-of-age for high decoration in foiling and screen printing. Flat foil has been around for years, but textured foiling is starting to take a real hold, and for those designers who know how to work with it there is amazing scope. For those that are less used to it, then make sure you book a place on one of our Label Apeel masterclass training days, coming later in the year.
The focus for our research and development team for the next twelve months will be on how to combine materials and different finishes to get that massive impact that every new and emerging brand needs.
I look forward to watching the drinks sector continue to grow and flourish, with unique and independent businesses bringing it alive and challenging the thinking of older brands.
