Special pack sizes and limited-time multipacks are creating more opportunities for consumer packaged goods companies to gain wider distribution for their brands. In the process, brand owners can tap outside sources to test new or differently packaged products cost-effectively without having to invest heavily in new packaging lines and labor.
In the Southwest, Komplete Packaging is one of the companies providing product manufacturers with this flexibility. Contract packaging is a growing part of the company’s business and accounts for nearly 70% of total sales. The Dallas, TX-based company complements its packing capabilities with thermoforming and labeling operations.
To accommodate customers’ growing need for product packaging versatility, Komplete Packaging’s production-floor operations change daily. Each day, the facility typically runs five to eight highly adaptable production lines each day, They are operated by a combination of on-staff and hired-by-the-project workers. About 90% of the machinery inside the sprawling 500,000-sq-ft plant rolls on wheels to allow frequent changes in line configurations.
Such a change-on-a-dime setup enables Komplete Packaging to handle a lot of secondary and custom display packouts, as well as contingency work, for products in personal care, food, beverage, home repair, and consumer electronics. A good deal of the work in progress when Contract Packaging visited the company entailed shrink film. Ron Robertson, senior vice president, believes printed shrink film is becoming a strong area in which to operate because brand owners want improved visual “pop” on their packaging. The need is acute in the wider aisles of superstores, club stores, and other high-volume retailers. Printed shrink film is one material that provides the gloss and sharp images that call attention to compelling graphics from a distance.
But beyond visual appeal, retailers also want product appeal. They are demanding custom packs designed especially for them, to get shoppers inside their doors. Contract packagers such as Komplete Packaging offer the line flexibility that enables brand owners to change product quantity or variety and package size quickly to meet current requirements.
“We do a lot of secondary packaging for the food industry,” Robertson says. We erect floor and pallet displays for mass merchandisers and club stores. Customers often send us 24-pack cases, and we disassemble them and arrange them into variety packs in displays.”
Confidentiality agreements prohibit Komplete Packaging from identifying specific customers. But Trudy Lambert, customer relations manager, cites one large soft-drink manufacturer that asked the co-packer to construct special display pallets mixing 1-liter bottles of five flavors of soda.
Such orders require speed-to-market because the multipacks satisfy either a limited-time promotional window or keep high-volume retailers in stock. This is one area that’s growing Komplete Packaging’s contract packaging operations. The company can ramp up and down operations to meet sales forecasts.
Besides variety and promotional packs, product manufacturers also are turning to Komplete Packaging for custom pack sizes. Robertson outlines several scenarios in describing contract packaging’s value in developing custom packs for stores today. In the first example, Wal-Mart wants macaroni and cheese in a six-pack, and a dollar store requests two-packs. Yet, a product manufacturer’s own production lines are set up to produce only six-packs. Second, Wal-Mart requests 18-packs of soft drinks or bottled water, but the product manufacturer’s packaging lines are engineered to produce only 20-packs.
In each of these examples, time to shelf is critical, but the risk that the product will fail is relatively low. The product manufacturer calls on Komplete Packaging for the initial production, and possibly more.
These “trial work” projects are both a blessing and a challenge, Robertson says, and they sometimes require the use of partner companies. Graphic design and package prototyping are referred to Virtual Packaging. Then Komplete Packaging validates the ensuing design’s ability to run on its own machinery.
“We might say, ‘That’s a great design, but did you also think about A, B, and C as valuable alternatives?’” Robertson notes.
Kamal adds: “If it’s feasible to do it in-house, our customer will add that line in. Most of the time, they come to us and say, ‘This is our plan.’ They want us to start it up for six months.”
Such is the ebb and flow of contract packaging work. Komplete Packaging also enjoys success in pressure-sensitive labeling, with a lot of the business coming from bottles of household cleaning products. Typically, empty bottles arrive at Komplete Packaging from the customer. They are labeled and sent to another vendor for filling.
The strategy in appealing to specific
customers involves approaches that reduce costs
during packout. Lambert mentions that Komplete
Packaging is saving a hair-care company money by
adding flexibility to labeling operations for
the bottles. The hair-care company sends labels
for three different products, but each is
applied only as needed.
“Product demand changes. To prepare all those bottles 10 or 12 weeks out, what if they sell more of this or more of that? That’s why we want to stay flexible in labeling these bottles,” Lambert says. “They’re trying this for two or three months.”
Elsewhere, the thermoforming department designs and produces custom clamshells and blister packs. The contract packaging operation then fills and seals the packages for packout to stores. Thermoforming has a stock program to enable clamshell and blister ordering in quantities for small custom runs.
“Our thermoforming and contract-packaging
divisions play off of each other,” Lambert says.
“We help each other.”
The production floor at Komplete Packaging is also versatile in its growing business of producing stick packs. The company creates condiment kits for two major U.S. air carriers. Stick packs of sugar and powdered dairy creamer, as well as stir sticks and napkins arrive in bulk bags at the plant, where they are separated and repacked as condiment kits for use aboard airplanes.
• During the past several months, Komplete Packaging has switched some customers from chipboard to printed film secondary packaging. Besides high graphic impact, Robertson says, customers who are going this route find they are saving 30% in material and labor costs. At the plant, the film-wrapping machines are running faster than the cartoning machines, Robertson says, and they use fewer people. They are running 24-pack cases of soft drinks shrink-wrapped in polyethylene film, at 20 cases/min and two-packs at 50 cases/min. That compares with about four-pack chipboard carton multipacks running at about 15 cases/min.
• For other customers, visual awareness is also important inside a clear package. They might want the product suspended inside a thermoform package to call more attention to it. Typically, plastic components—not always recyclable—are the materials of choice for achieving this product effect, but Komplete Packaging is working more paperboard components inside the packaging.
“We’re trying to go green, and we’re watching
the market trends,” Robertson says.
The author, Jim George, is the editor-in-chief of Contract Packaging magazine.