Describe the onset of lockdown in March and how the company coped through 2020
Sally Molyneux, Klöckner Pentaplast (kp) : Demand increased significantly as the public started to panic buy. At the height of the lockdown we worked with our customers exhaustively to ensure that we were equitable with our distribution of product. We communicated with our customers throughout as their demand changed.
Helene Roberts, Robinson: We have serviced our customers throughout the pandemic, invested heavily in new equipment and have simplified and standardised our business processes to create a consistent one-Robinson approach.
Simon Firth, Macpac: We put in place procedures and new systems to keep all staff safe and protected and allow continued production within the factory. Our focus was to keep the factory open; customers were contacting us to have reassurance that supply of goods were not going to be affected.
Nigel Coates, LVF: Some changes happened almost immediately: masks being worn at all times while at work, including office staff; hand sanitising stations being placed at all entrances and exits; doors being left open where appropriate; and foot openers being added where not. Others took a little longer – the addition of a temporary canteen in the car park with individual tables separated by Perspex screens.
Jamie Gorman, Aegg: It was a very uncertain time for all. As we support food and drinks businesses, we had to ensure continuity of our service. We had daily senior meetings to discuss key operations, our supply chain and supporting our staff. I sent weekly communication emails to all staff and we also set up a staff WhatsApp support group.
How was trading in 2020 – did you hit forecasts despite the pandemic or was trade affected? Did you find new revenue streams in new sectors because of the pandemic?
Molyneux : It really was a tale of two halves, with the protein sector seeing strong year-on-year growth as in-home dining became the norm. The convenience sector was significantly affected throughout the whole year, with some categories within food-to-go being down year-on-year by 60%. An interesting development came with schools closing cafeterias and moving to pre-made lunches served in our kp Infinity range of EPP Hotpac containers.
Roberts: We were able to react quickly to meet the demand. Strong partnerships are critical to understand our customer’s markets, plans and needs. In the face of many challenges we have achieved a revenue growth of 6% and remain committed to further growth ahead of the market this year.
Firth: Certain market sector turnover dropped due to lockdown, but then other sectors started to explode due to the pandemic. Online sales for customers became crucial so we were able to help them in supplying packaging to allow goods to be sent via postal services and keep them going during this period and beyond. Macpac produced face visors at the outset along with hard hat visors.
Coates: While 2020 was a horrible year due to the pandemic, we were 10% over the forecast we’d made for the year pre-pandemic because of the markets we serve. The year though was more of a mixed bag. The volumes of the meat trays we manufacture for various supermarkets went through the roof, whereas food service packaging such as pots and lids fell right off a cliff.
Gorman: Yes, despite the pandemic, we hit our sales forecasts. We kept our operations flexible, responding to customer needs. Some areas of our business increased, including retail. Other areas understandably decreased, such as supplies to the hospitality sector. We have worked hard to accommodate the changing demand patterns that the pandemic has presented us with.
Are/were Brexit and border delays having an impact on your company and the sector?
Molyneux: We have been planning exhaustively to ensure that when the transition occurred, we had mitigated the risks as much as possible. On that basis we have seen very little disruption outside of the occasional minor transport delay due to waiting time at ports. We worked with customers on INCO terms and broker requirements throughout 2020 to ensure that when the UK’s status changed there would be no disruption.
Roberts: Brexit has had minimal impact on the business because of our risk management and the extensive planning we put in place to ensure we had resilience in the supply chain, so we did not encounter any disruption in production or let down any of our customers.
Firth: Having shipped goods throughout Europe post Brexit, so far working with our transport partners we have not experienced any major issues in terms of delays at ports. We are seeing cost increase to ship goods abroad due to paperwork/clearance documents now involved but we have factored in these extra costs so the customer has no surprises.
Coates: It could be viewed as either fortuitous or divine inspiration, but several years ago (pre-Brexit referendum) we made the decision to primarily source our materials from UK suppliers – and where possible from those local to us here in Leeds. As a result we haven’t been affected by border delays. However, we are feeling the effects of increasing raw material and transport costs through our suppliers who source some of their materials in Europe.
Gorman: They are not having as big an impact on the industry as previously thought. There are a few teething problems though, including the import of plastics from Ireland; taxation when sending samples to Europe; and some wider confusion over the new rules. However, once the dust settles, these are all likely to improve in the coming weeks/months.
What’s your strategy for 2021? Capital expenditure, new staff, expansion etc? And is now a good time to invest?
Roberts: During 2020, we introduced a significant amount of change to the business and our focus in 2021 will be one of consolidation, extracting full value whilst taking the opportunity to refine our business processes and to introduce key elements of digitalisation. We have acquired Schela Plast in Denmark. This investment is part of our growth strategy to build on our bespoke, customised model, offering a complete packaging solution, from cap to bottle.
Firth: Last year we saw an increase of new clients into new market sectors, the demand for new packaging development has subsequently increased. To service this rise in demand we will be looking to invest in personnel in our CAD office as well as tool room staff. 2021 has started out very busy in new development so we need to continually invest to keep the service levels where we expect them to be.
Coates: Our aim is to continue to build for the future. This year this will take the form of a significant piece of capital expenditure, with over £500,000 already spent on a new Kiefel thermoforming line, which will be delivered in late spring. I’m confident the timing of this investment is ideal, as with the country hopefully opening back up throughout the year then the areas of business that have suffered during the pandemic will pick back up, while those that have performed so well will continue to sell strongly.
Gorman: We are investing heavily in the expansion of our moulding site and our growing team. We are also actively analysing the market, looking to expand from food and drinks into other sectors, such as medical and healthcare, with a view to adding high care production halls to our capabilities.
Have you launched any new pack formats? And what are the most popular with brands?
Molyneux: We have recently launched our patented kp Elite tray system into the poultry sector with our new S Range. The kp Elite S range offers a modified atmosphere packaging (MAP) solution for fresh poultry that delivers end-to-end sustainability. This award-winning product is made with up to 100% recycled PET (rPET), which is recyclable, highly efficient, reduces food waste and extends shelf-life.
Roberts: Our launches are bespoke to our customers and developed in partnership to meet their specific needs and those of their customers. Our skill is to bring technical know-how to deliver the ideal packaging solution.
Firth: With online sales increasing during the pandemic, we are seeing increased demand for new pack formats to add to our online sales offering. During 2020 we launched a variety of new designs as well as producing packs in Jazz rPET. Jazz rPET is an alternative to Black rPET which is non-detectable through the NIR sorting process.
Coates: We have been approached by Gravity Tray UK to act as its manufacturing partner in the UK. Its new 100% PET material tray features a reservoir in its base to collect the fluids that leak from the meat or fish that would otherwise require the use of an old-style soaker pad as currently used by most packer processors. Amazingly the fluids collected will not leak out of the reservoir even when you hold the tray upside down.
Gorman: We have produced several new pack formats for customers within our bespoke design service. We have liaised with both food manufacturers and retailers to create made-to-order solutions for them.
What are your customers currently demanding? Are there any particular trends that you are seeing?
Roberts: Packaging for home cooking, personal care and some refillable pack surge too. We have also seen an increased focus in homecare cleaning with sales of those categories increased across key sectors for example bleach and surface cleaners. Online deliveries which require more robust packaging and larger pack sizes continue to be on the rise – at an unprecedented rate.
Firth: Removal of non-detectable black PET has been at the forefront of customer requests, moving away from the standard Black to either a detectable Black / Jazz or to clear has been the way customers are going. Downgauging material by designing packs suitable for reduction in material content is also a main consideration when developing new pack formats.
Coates: Recyclable is the word on an ever-increasing number of customers’ lips – and it’s a trend that won’t stop until everything we sell is fully recyclable. In many cases the right boxes are ticked by simply switching from laminated PET/PE to more readily recyclable Mono PET, but we also have the fully biodegradable Breakdown PET up our sleeves for those who want to spend that bit more and give their environmental credentials an even greener tinge.
Gorman: The customer conversation is shifting. Where the focus was predominantly about recycling, customers are more widely considering the impact on the overall carbon footprint. With the upcoming plastics tax, incorporating 30% recycled content is key. Customers are also requesting lightweighting, which still has a premium look.
Amidst the single-use plastic debate, how do you feel the rigid plastics packaging sector is responding What are your suggestions?
Molyneux: The kp Tray2Tray is dedicated to working across all our regions to develop the recycling of our products so that we can give real circularity to what is a vital raw material. This will enable us to grow the percentage of home sourced post-consumer recyclate for our products within each region. We are committed to working with our partners to evolve from laminated materials to 100% mono solutions to improve recyclability. This is primarily through our kp Elite range for trays and kp MonoSeal for rigid films for form, fill and seal applications and will develop into our flexible offer as technology allows.
Roberts: We will be launching our sustainability pledge which will focus on circularity – to recover, regenerate and restore all products and materials at the end of their useful life. We have commitments to reduce our virgin plastic use, use the maximum amounts of recycled content, find solutions to use recycled plastics in new packaging where existing legislation does not allow, and ensure all of our products are fully recyclable. We will do this without creating any unintended consequences, such as increasing food or product waste.
Firth: As a company we are designing for recyclability and working with our clients to make sure the packaging that reaches the consumer is fully recyclable. We are working with our suppliers to increase demand for ‘tray recyclate’ not just bottles.
Coates: There’s a huge amount of work being done in eradicating single-use plastics; an effort only matched by those in the industry trying to demonstrate that plastic is still the only answer to so many questions. Unfortunately, a lot of this effort feels fruitless because it isn’t being given the profile needed to change public opinion. What needs to be remembered is that plastic became public enemy number one because of a prime time show presented by the living definition of a national treasure. Unless there is a balanced debate I fear our banging of the drum will continue to fall on deaf ears.
Gorman: The key is to provide resource-efficient packaging, such as including recycled content and lightweighting without compromising packaging functionality. As an industry, we also need to promote the benefits of plastic, such as the protective role it plays in the logistics chain, its lower climate change credentials and its role in preventing food wastage.
What is your message to the industry, given we will still be adapting to the pandemic most of this year?
Molyneux: We should be proud that the whole industry (packaging/producers/retailers) has adapted its business models to ensure the continued availability of food products at a time of great uncertainty.
Roberts: I am extremely positive about the role of packaging in these difficult times and know the industry as a whole will rise to the challenge. While uncertainty looks set to continue during this pandemic, I am excited about the opportunities for our people to thrive, strengthening our customer partnerships while achieving sustainable growth, and increasing value and shareholder investment.
Firth: I think that all businesses will consider 2021 to be a period of reassessment and recovery as we eventually see restrictions due to Covid-19 lifting. No business exists in a vacuum and we are all cogs in a very large machine, so it is essential that the government maintains a favourable trading environment for all businesses. The management of the economy will be essential over the next few years, only then will we be able to repay the debt incurred by the government during the pandemic.
Coates: Last year, faced with the biggest peace time crisis this country has ever known, we as an industry, and manufacturers as a whole, rolled with the punches, adapted and carried on when we were needed the most. Hopefully this year we’ll find ourselves adapting back to normality, but even if this takes longer than we would like, we know we all have the adaptability and the people to carry on and make the best of a terrible situation.
Gorman: Adopt the three Cs: Collaboration – this is key; Change – embrace it; Create solutions – the wider industry needs to know that we’re here to help.
Sally Molyneux is UK sales director for Klöckner Pentaplast (kp), the rigid and flexible packaging manufacturer. It specialises in film solutions, serving the pharmaceutical, medical device, food, beverage and card markets. Founded in 1965, kp has 32 plants in 18 countries and employs over 5,900 people in over 60 locations.
Helene Roberts is chief executive of Robinson, the £35m turnover packaging company serving the food, personal care and beauty, and homecare sectors. Primarily a rigid plastics manufacturer, Robinson also has a smaller paperboard operation, and employs more than 370 people overall.
Simon Firth is UK sales manager for Macpac, designer and manufacturer of recyclable thermoformed packaging. Located in Stockport, Macpac supplies over 100 million units per annum into the food, medical, retail, electronics, toiletries and horticulture industries.
Nigel Coates is managing director of LVF Packaging, the rigid plastic specialist primarily for the food sector. LVF supplies a variety of packaging for proteins, confectionery, bakery, dairy and produce. Additionally, the Leeds-based company produces packs for toiletries, promotional gifts, hardware and the medical sector.
Jamie Gorman is managing director at Aegg Creative Packaging, supplier of rigid recyclable plastic and glass pots, jars, bottles, bowls and lids to food and drink companies across Europe. Aegg also provides in-house bespoke design, manufacturing, warehousing and logistics solutions.