Tony Smurfit - The Big Interview

Tony Smurfit, Chief Operations Officer at Smurfit Kappa, talks to Tim Sykes, Editor of Packaging Europe, about the driving trends in the transit packaging segment, the position of corrugated packaging, and his own company's drive to spread the word about its all-round excellence.

Tim Sykes

From your observations what are the big market drivers in secondary and tertiary packaging?

Tony Smurfit:

The biggest driver today is undoubtedly the move towards more display-ready packaging. This means more print and more colour so that private label or branded products in the supermarket catch the eye of impulse buying consumers. I've heard of research which indicates that only 20-25 per cent of purchases on the retail floor are pre-planned, which leaves a great deal of purchase decisions that can be influenced by packaging.

The rise of display-ready packaging is therefore a huge trend, reflected in the exponential growth in both coated and regular recycled and Kraftliner white papers. It has been broadly recognised that it's no good having nice looking primary packaging if the secondary packaging undermines the visual appeal. On the other hand, in some cases it is possible to downgrade primary packaging if the secondary packaging has been upgraded. The opportunity to put secondary packaging on the shelf allows you to be very innovative. There are plenty of examples of this in Smurfit Kappa, from our 3D Store Visualiser to the way we perforate boxes to optimise the visual impact of the product inside.

Clearly, this trend is ultimately driven by the need to eliminate costs in the store and the supply chain. Opening up a box and putting it on a shelf takes about a third of the time of store filling. In this context, this transition to shelf-ready packaging has been accelerated by the recession. Since the start of the crisis people have been more careful about their purchases. Slightly smaller quantities are being sold, individual shopping trips are downsized.

A consequence of this is that discount retailers such as Lidl and Aldi have experienced growth. It was the low cost retailers which pioneered shelf-ready packaging as they sought to cut costs by eliminating the step of filling up displays on the shop floor. These retailers subsequently led the push for higher quality packaging, recognising that putting an unattractive box on the shelf was counterproductive, a false economy. So these kinds of discount retailers were at the forefront of the trend, which gained momentum as other retailers got behind it. Today a lot of the new machinery installed across the industry has printers behind it.