BW Confidential - Issue #1 - April 2010 - (Page 54)

Packaging Industry analysis Strategies for a new economy How the crisis is affecting suppliers and innovation in beauty packaging by Naomi Marcoulet T he past year has been grim for the beauty packaging industry. Retailers destocked, consumers reduced their purchases, brands ordered less and as a result suppliers saw their business diminish. Packagers were forced to react by laying off staff, closing sites and reducing capacity. Just how are suppliers now dealing with the effect of the crisis? For Meadwestvaco (MWV) it comes down to being more cost-effective. “We changed manufacturing locations and looked to faster machines; basically we tried to be more efficient,” says MWV fragrance marketing director Sandy Gregory. Likewise, plastic cap and dispenser manufacturer VPI (Flaveley Plasturgie Group) is investing in more efficient automation processes. “Our innovation in automation in particular will enable us to respond [to our clients’ cost-cutting demands],” notes VPI ceo Gilles Pauget. The company is also investing in the development of new materials. “We are [allocating] about 50% of investment to automation and 50% to innovation,” says Pauget. credit: stock.xchng better respond to clients who have become ever more demanding in terms of timing and costs. “A new phenomenon resulting from the crisis is that clients are ordering things to be developed in very little time, [...] so they are asking for turnkey products,” says Schinazi. In response, the company has ramped up its standard ‘ready-to-go’ and promotional product range and launched a product catalog that is due to go online later this spring. “We have reduced costs and time. We have mascara brush normally needs an investment by the client to launch the mold before testing it. Whereas this process means we can provide a solution and launch the product very rapidly,” says Alcan Packaging Beauty creative and innovation marketing innovations director Maria Viegas. The need for more creativity Meanwhile, UK-based plastic supplier M&H Plastics has produced recycled packaging for eco-friendly brand Evolve at a reduced cost. “The packaging was selected from M&H’s range of standard products which helped keep the retail price at a cost-effective level. M&H has over 1,000 standard products, which means customers can select from a wide range without incurring the expense of custom molding and tooling,” notes M&H Plastics marketing manager Vicki John. Indeed, sustainable or environmentally friendly packaging is now a big trend. While some manufacturers maintain that this strategy can be more costly, others, such as VPI are looking to make it accessible. “We must propose solutions that are operational and not expensive. With the crisis, not all brands can buy more expensive packs in order to respond to sustainability issues,” says Pauget. There is a definite pressure in terms of lead time and costs, but what effect will this have on innovation in the sector? “It’s complicated. On the one hand our clients are looking for innovation and at the same time they are looking to save. Innovation, even if you try to make it as inexpensive as possible, will be “ High-growth markets Other suppliers are looking to new highgrowth markets (although many companies manufacturing in China suffered last year due to increases in shipping costs, which meant the transport of product back to Europe cancelled any saving from outsourcing to cheaper markets). Following a stream of costcutting measures last year, Belgium-based company Cosfibel is looking to reinforce its international presence. In February, the company opened an office in São Paulo, Brazil. “We are looking to have offices in zones that are doing well,” says Cosfibel ceo Ilan Schinazi. “Brazil is on its way to becoming the second-largest cosmetics market in the world, so there is a lot of hope there.” Suppliers are also looking at how to 54 The crisis has been a favorable factor as now brands are looking to differentiate themselves Alcan Packaging Beauty creative and innovation marketing innovations director Marie Viegas ” a larger offer and we are now able to attract a client which we were not able to reach before,” explains Schinazi. At Alcan Packaging Beauty, a rapid prototype testing system enables clients to test functional mock-ups of injected mascara brushes in 15 days. “This process has allowed us to be more reactive and to quickly understand the needs of our clients. A plastic April 2010 - N°1 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #1 - April 2010

Update - Brand and retail recap
Take note - Market facts, figures and trends
Launches - The latest fragrance, skincare and make-up launches
Best of BW - Market highlights
Interview - Sephora international & development md Olivier Schaeffer
Insight: make-up - Category overview
 - Industry viewpoint
 - Trends
Wellness report - Overview
 - Industry roundtable
 - Spa case studies
Travel retail - Europe: little chance of a rebound
Market watch: Western Europe - Regional analysis
 - Germany
 - France
 - UK
 - Spain
 - Italy
Radar - Six up-and-coming beauty brands
Packaging special -  Industry analysis
 - Innovation
Last word - UBS analyst Nik Modi's outlook for 2010

BW Confidential - Issue #1 - April 2010