Sustainability, supply chain, labour shortages contribute to EoL machinery market growth
Stretch wrapped bulk packaging
End of Line (EoL) machinery – a USD $4.42 billion industry – accounts for nearly 47 percent of the United States packaging machinery market with steady growth forecast through 2026, according to the newly released 2021 End-of-Line Equipment Purchasing Trends and Design Insights white paper produced by PMMI Business Intelligence, a division of PMMI, The Association for Packaging and Processing Technologies. Trends such as sustainability, supply chain visibility, SKU expansion and labour shortages all contribute to the increased demand for EoL equipment.
PMMI defines EoL packaging, also referred to as bulk, tertiary or transit packaging, as packaging that is used to group larger quantities of SKUs to transport them from ‘point A to point B’ (from production facility to point of sale). During this stage, products are handled as distribution units. This type of packaging makes it easier to transport large and/or heavy loads safely and securely.
Driven by consumer demands for more eco-friendly products and manufacturers’ goals to cut costs by reducing material and energy usage, sustainability has become one of the most significant trends – throughout the entire production line – in the packaging industry. The report explains that this is true for EoL equipment as well, where specific sustainability trends such as lightweighting, the use of recycled materials and the general reduction in machine energy usage are driving innovations in EoL machinery.
“End of line machinery makes up just under half of all packaging machinery purchases, making it inevitable that sustainability would find its way into EoL design and purchasing trends,” said Jorge Izquierdo, vp market development, PMMI, Herdon, Virginia. “The increased use of recycled or plant-based materials alone requires modifications to EoL machines to increase tolerance in handling and inspection.”
Another key trend affecting the EoL packaging space highlighted in the white paper is the need for product visibility in the supply chain. While consumers drive this for primary packaging, in the EoL space it is spurred by a combination of regulations, retailer requests and manufacturer logistics. These three primary forces push manufacturers to expand their labelling on EoL packaging configurations to track their products more efficiently and accurately through the supply chain.
One of the most dominant developments across consumer packaged goods (CPG) industries is the ever-expanding number of SKUs now being produced by manufacturers. While this trend was partially disrupted in select industries in 2020 by Covid-19, with some major manufacturers strategically trimming SKU counts to focus on the growing demand for certain product segments, this interruption is expected to be short-term, according to PMMI. As supply chain challenges continue to abate in the coming year, SKU expansion will pick back up.
Per the white paper, there are numerous factors driving this increase in SKU count – customised products, expansion of shape/size choices, diversification of distributed channels, growing packaging material options for single products – but the result is the same for manufacturers: they are producing more products in a wider array of packaging formats. To accommodate these production strains, manufacturers are seeking a new breed of EoL technology and machinery – which have evolved in the last two years – that is highly flexible and can handle the rapid changing of SKUs within a single shift. Manufacturers are also turning to EoL equipment that integrates several different functions into a single machine. These improvements are ultimately rooted in an ongoing need to expand the level of automation and ease of integration in the EoL space.
One factor directly impacting EoL packaging operations is the ongoing labour shortage, which is pervading CPG manufacturing industries. From large operations to small- and medium-sized enterprises (SMEs), manufacturers in the CPG space have reported struggling with a general lack of available labour. The white paper also suggests that original equipment manufacturers (OEMs) can help by identifying areas of EoL operations to deploy automation to reduce a need for unskilled labour.
- Vanessa L Facenda, editor, Tea & Coffee Trade Journal.
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