Home » PMMI Study: Retailers are Driving Expansion of Retail Ready Packaging
PMMI, The Association for Packaging and Processing Technologies, Reston, Va., released “Retail Ready Packaging: Research and Analysis,” a report that outlines what’s behind growth in the market for retail ready packaging (RRP).Researchers conducted lengthy interviews with an assortment of brand owners, machinery manufacturers and retailers to complete the survey.
Retailers are driving the expansion, particularly large-box stores and supermarkets, whose influence stems from sales volume, the PMMI study reports. That’s particularly true in developing markets, such as Asia and Africa. Both experienced significant rates of growth in 2012, although they’re not the largest RRP markets. (That distinction goes to Europe, followed by North America).
“Urbanization, population and economic growth are significant drivers for RRP, especially when they are accompanied by an increase in the number of supermarkets and large box stores,” says Paula Feldman, director, business intelligence, PMMI. “RRP enhances shelf appeal and supply chain efficiency, so retailers often see it as a must-have and use their considerable leverage with manufacturers to make it happen. As they adjust their packaging requirements, manufacturers must continue to innovate to stay competitive.”
Consumer packaged goods suppliers generally expressed willingness to invest in specialized packaging machinery for RRP only if it would mean reduced costs in the long run, but also preferred limiting investments to components that simplify and streamline particular points on the manufacturing line. Considerations of lifetime cost, labor costs, flexibility and reliability all weigh heavily on their purchase decisions for RRP equipment, as does knowing that packaging requirements are apt to differ between one retailer and another and between an individual retailer and the market at large.
Although the conundrum can put manufacturers in the position of absorbing equipment costs, 79% of interviewees said they’re confident these investments will grow.
Material preferences for RRP were mixed among respondents. While most favored rigid formats for durability and appearance, 67% reported they would opt for flexible materials for cost savings.