Packaging Machinery

Valued at $3.5 billion in 2009, the packaging machinery industry found itself challenged to change and innovate, as industry shifted to leaner production methods requiring just-in-time (JIT) inventory management and as consumers rebelled against excessive and expensive product packaging. This meant new technology to manufacture smaller, more flexible machinery, and more packaging options for manufacturers.

To meet the demand, the industry introduced programmable logic controllers, robotics, self-diagnostic systems, microprocessor controls, automated testing, vision inspection systems, and built-in fault correction devices. Hydraulic and pneumatic actuators reduced clamping time and sped line changeover rates. Modern lines could shift from producing one part to an entirely different component in minutes instead of the previously common hours.

In 2010, Graphic Packaging Holding Company was an industry leader. Operating through subsidiary Graphic Packaging International, the company made cartons and boxes for a variety of food and beverage items. Customers included Kraft Foods, Anheuser-Busch, and General Mills, among many others. Based in Marietta, Georgia, Graphic Packaging had sales of nearly $4.1 billion. In 2008, the company merged with Altivity Packaging, bringing its total worker population to 13,100. Other industry leaders included R.A. Jones & Co. in Covington, Kentucky, with about 430 employees; Angelus Sanitary Can Machine Co. of Los Angeles; and Birmingham, Alabama-based Better Packages.

According to government statistics, this industry employed 19,590 workers in the late 2000s, with a payroll of $1.0 billion. About 10,600 employees worked in production, earning an average hourly wage of $20.16. Shipments for the industry were valued at $4.5 billion.

Although most of the market demand was domestic, exports formed an important part of the industry's market. In the late 1990s, products were shipped to about 140 foreign countries. The largest purchaser of American equipment was Canada, followed by Europe, the Asia-Pacific region, and Central and South America. At the close of the century, due to the falling Asian economy and undervaluation of Asian currency, the exports to this market decreased.

In both the United States and foreign countries, the industry faced major challenges by environmental and energy concerns. This especially was true in Europe. The demands for recyclable and reusable materials and containers prompted more than 500 legislative proposals in 50 states to control solid waste. Other countries instituted their own measures. Concerns over conflicting regulations prompted interest in such measures as the ISO 9000 international machinery standard, which defines the rules of manufacture and prevents such national or state standards from becoming nontariff barriers to trade.

At the same time, industry was demanding lighter materials--both in the actual packaging and the machinery--to reduce transportation-related energy costs. Responding to the JIT philosophies, packaging equipment companies were beginning to use air freight to speed delivery time.

The manufacturing focus in the early-to-mid-2000s was on new and diverse products to meet the individual needs and desires of the market. According to the Packaging Machinery Manufacturers Institute (PMMI), companies wanted "quick changeover capabilities, flexibility, and fast speeds" more than any other features. Consequently, the industry was expecting continued growth to meet demands for newer and better packaging machinery, replacing older equipment with faster, more efficient, and more automated machines. Trends toward lightweight, individually designed, flexible, and reusable packaging increased demand for the design of machines that could manufacture such packaging.

In 2002, almost $5 billion was spent on this industry. Food products accounted for 40 percent, followed by beverage products (18 percent), medical and pharmaceutical products (12 percent), and consumer products (eight percent). Nondurable goods, chemicals, and personal care products were all around six percent of the total, with the remainder going to miscellaneous sectors. In 2003, the industry was still quite healthy, and only consumer products and nondurable goods were expected to decrease in demand. The largest jump in demand was forecast for medical and pharmaceutical products.

The economic recession of the late 2000s slowed production, although by 2010, some were noting signs of a recovery. According to PMMI, markets with positive outlooks for the packaging industry in 2010 included pharmaceutical and medical devices, personal care products, beverages, coffee and tea, chemical products, cleaning and finishing products, household and industrial products, consumer and commercial industrial durables, hardgoods, components and parts, and food preparation.

As the second decade of the twenty-first century began, the focus in the packaging machinery industry was on "reducing the plant's carbon footprint, complying with food-safety regulations and ensuring the physical integrity of delicate food products," as stated in PMT: Packaging Machinery Technology. Companies were looking for high-efficiency machines that would use less energy and also save in labor and production costs. Robots were in major use in the industry, especially in the packing and palletizing of items.

Safety was a hot topic in the industry in the 2010s, as companies and consumers dealt with massive food recalls due to contamination. In response, manufacturers of packaging equipment used such emerging technology as all-electric injection molding, which did not use hydraulics and so did not require lubrication oil, and thus reduced sources of grease contamination while packaging foods or beverages. Equipment manufacturers also had to adjust to the trend toward flexible and recyclable packaging. According to PMMI, flexible packaging held 41 percent of the total packaging market in 2010 and was expected to continue to take market share from rigid packaging.