4 Oct 2018

Risotto Box for Auction

PACKAGING—What It is its requirement

While packaging, in some form, has been in existence for centuries, the growth in its usage has been particularly rapid in the second half of the twentieth century in industrialized and developed countries and, more recently, in many developing countries. Packaging has evolved from a relatively small range of heavy, rigid containers made of wood, glass and steel to a broad array of rigid, semi‐ rigid and flexible packaging options increasingly made from specialized lightweight materials. Today, packaging is produced more quickly and efficiently than ever before. It is generally lighter in weight, uses less material and is easier to open, dispense from, reseal, store and dispose.

AUSTRALIAN PACKAGING

In Australia, packaging is an essential component of our modern life style. It touches every aspect of our daily life. It is fundamental to the way commerce is organized. Without packaging, materials handling would be messy, inefficient and costly, and modern consumer marketing would be difficult.

Packaging uses a vast range of materials—adhesives, metals, glass, paper, board, plastics, films and wood — either singly or in various combinations. The design range is also vast, ranging from tubes to pouches, cartons to corrugated boxes to bulk containers, cans to bottles to drums. Add to these materials and shapes an equal range of colors and special techniques such as holograms and the range of options increases significantly.

Consumer packaging has, by the time of its disposal, delivered significant benefits to the consumer. It has ensured the security of the product, delivered it in a clean, safe and for sale form and prevented spillage and spoilage. It has delivered substantial economies and thereby kept prices down by facilitating ease of handling, warehousing and distribution. Packaging has also reduced both the amount of solid waste going to landfill and the overall environmental impact associated with the production and distribution of goods which has been beneficial to society.

THE ROLE OF PACKAGING

In the past, this functional aspect of the role of packaging—preservation and product security—has been taken for granted by the general community. This has changed in recent years with a number of incidents in Australia involving the willful tampering and despoliation of packaged products. Product security is now a major global issue for all companies involved in the packaging supply chain.

Consumers are certainly demanding more from packaging—convenience, differing product sizes, easy opening (but also child resistant closures and tamper evident) devices, respect for the environment, and minimal cost for packaged products. Convenience foods, individually packed small serves, microwavable meals, ‘easy‐opening’ packaging, Home Meal Replacements, secure packaging for pharmaceuticals and hazardous substances are all examples of packaging playing a role in assisting and promoting our lifestyles.

AUSTRALIAN PACKAGING—KEY STATISTICS

¾ The value of packaging produced in Australia is estimated to be $AUD10–10.5 billion. By international standards the Australian market is extremely small. The value of world packaging is estimated to be $US 300 billion.

¾ The Australian industry accounts for slightly in excess of 1% of GDP.

¾ About 30,000 people are directly employed in the production of packaging in Australia.

¾ The two major packaging manufacturers in Australia are Australian owned as are a substantial proportion of small and medium enterprises (SME).

¾ Generally, most packaging produced in Australia (as elsewhere) is a high volume/low margin business.

¾ ‘Value added’ packaging is where the margins (and costs) are higher. The drivers for such packaging are, however, often in conflict with, and subordinate to, the pressures for cost reductions.

PACKAGING MATERIALS

The major packaging materials used in Australia are glass, metals (aluminum and steel), paper/board (cartons and corrugated), and plastics (PET, PVC, polypropylene and polystyrene). Paper/board packaging is the largest single material constituting about 36% of the total Australian packaging market. Plastics has gained significant market share to be the second largest sector (30%), with flexible increasing at the expense of rigid plastics. (In the early 1960’s plastics had less than 10% of the share of the packaging market.) Metal packaging has lost market share in food applications but still accounts for 20%, with glass at 10%. Other types of packaging make up the remainder.

PACKAGING INDUSTRY

Size matters in the business of packaging. Concentration and consolidation has been a feature of the Australian packaging industry over the last decade. The degree of concentration of the Australian packaging industry can be seen from the following:

¾ Glass containers
¾ Corrugated boxes
¾ Aluminum cans
¾ Liquid paper board cartons
¾ Steel cans
¾ Plastics

Despite the concentration and consolidation in the industry, competition between companies and material types remains intense. Competitive pressures are produced by imports, competition from alternative packaging types and the demands by the major users of packaging that Australian packaging meet international best practice standards.

The Australian packaging industry has been criticized from time to time for being noncompetitive — high cost and poor in terms of innovation. Much of this criticism lacks substance and is self‐serving. Nowadays the Australian packaging industry is outward looking and export oriented to an unprecedented degree. Like most manufacturing industries in Australia, some parts of the packaging industry suffer on account of scale. This means that the discounts attainable from long production runs are probably not available to users of packaging to the same extent as in the United States and Europe.

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