On one hand, Food Engineering readers who responded to this year's survey rated cost as the fifth most important of 16 factors relating to packaging equipment purchases. Likewise, the cost of primary packaging materials was ranked on a par with consumer convenience in a list of 21 factors impacting food operations in the next two years, and both trailed food safety. The cost of secondary materials was well down the list. (See related chart. Respondents rated factors on a scale of one to five; mean scores are converted to a 100-point scale for purposes of presentation.)

On the other hand, cost is the hands-down imperative when food managers develop new packaging, outpacing brand image, consumer convenience and three other considerations. Two-thirds of respondents rated cost as a very important factor.

This ambivalence reflects the complex and sometimes contradictory demands placed on today's food and beverage companies. Food safety is unquestionably the top priority of processors, and packaging managers say as much in their ratings of 21 factors. And the safety of consumers is not the only area of concern: operator safety is the second most-important consideration when purchasing packaging machinery, respondents say.

"It's a balancing act," suggests Jeff Wooster, value chain manager for resin supplier Dow Chemical. "Most people are willing to pay a fair price for something that works consistently, and if they can drive down the price a bit, so much the better." By far the greatest growth in plastic resins is in the premium segment that delivers superior sealing at lower temperatures, thereby offsetting higher prices with faster line speeds and reduced waste, he says.

On average, 21.24 percent of the capital equipment budgets of survey participants' firms will go toward packaging machinery this year, and almost two in five will spend more than $2 million on packaging materials. Material spending will top $5 million at 22.2 percent of the companies.

Hey, big spender

Indeed, 37.5 percent of respondents to Food Engineering's survey indicated the economic downturn would have no effect on their companies' packaging upgrade plans this year, and 6.3 percent said their response to a soft economy is to increase spending even more. On the other hand, some firms are inclined to trim back on spending, notably the frozen foods category, which also had the highest proportion of plants that were eliminating capital expenditures in this area. Dairy products, canned foods and the flavors & ingredients categories also were inclined to sharply curtail spending.

Beverage companies are another story. Although two in five beverage respondents say spending is being reduced -- consistent with the 3 percent dip forecast by PMMI -- the majority of this group indicated the economy would have no impact on capital programs.

Beverage companies' outlays tend to dwarf other industry categories: almost half of them will spend more than $1 million this year on equipment and more than $5 million on packaging materials, outlays that are two to three times the industry's norms. By contrast, meat processors are the lightest equipment spenders, and almost half the dairies will spend less than $500,000 on packaging materials.

Beyond the dollar signs, engineers and managers provided insights and comments that sometimes challenged common assumptions. For example, easy changeover and line flexibility are presumed to be high priorities, but those attributes received middle-of-the-road rankings. Quick changeover was a high priority for beverage, dairy and confectionery company managers, but bakery operators and some other segments rated it fairly low. Compliance with government regulations was a highly rated attribute, particularly for meat, frozen food and fats & oils companies.

Supplier technical support ranked fairly low in importance, but maybe it's because it is assumed. "It is hard to understand why, at $40,000 per machine, training is optional," groused one respondent.

Servo-driven machines are preferred two to one over mechanical drives, but the level of interest varies from one food category to another. Asked which operating system they most likely would specify for new-equipment purchases in the next 12 months, managers at beverage and cereals & grain-based food companies expressed a strong preference for servos, and confectionery firms were almost unanimously in favor of servos. But dairy companies were evenly split in their preference for mechanical drives vs. servo controls, and flavor & ingredient companies actually preferred mechanical systems almost two to one.

An even stronger preference for mechanical drives was expressed by respondents at plants with fewer than 50 employees: 69 percent of those managers would choose mechanical drives over servos, compared to 20 percent of the larger firms (see related chart).

Less than 10 percent of small companies outsourced any packaging activities in the last year, about half the outsourcing activity of the larger firms. Beverage, bakery and meat companies were the most likely to outsource some activities. Equipment design and construction was the most frequently cited outsourcing responsibility. Label printing is another outsourcing candidate.

On the other hand, use of a contract packager ranked dead last among four possible strategies to decrease a company's time-to-market for a new product. The most likely strategy would be to modify existing packaging equipment (three in five checked that option), followed by more automation and the addition of a new packaging line.

The readers speak

Often the changes came because of a customer's request. "Response to government regulations" was another motivation.

Of those whose companies made a packaging material change in the last year, the most frequently mentioned shift was paperboard to plastic. But an equal number said they substituted a less expensive material.

One in four participants said their companies have tried to convert a marketing concept into a functional package, with bakery, confectionery and frozen-food companies the most likely to attempt it. Most of the projects were successful, with "bulk pack for club stores -- went very well" a typical response. Not all projects went well, and the comment, "under-funded for rollout" conveys the frustration of failure.

Asked where their companies' packaging efforts fall short, readers answered with an earful. "Excessive downtime due to labeling" and "excessive label sizes require constant machine adjustments" were two examples. More surprising was the comment, "accuracy has become more important; new equipment is not as reliable as old." In a similar vein, one respondent wrote, "although tech support is available, the down time awaiting parts needs to improve."

Package sealing problems were a frequent complaint. Several writers voiced the need for affordable automation. Greater efficiency, flexibility and faster speeds were common themes.

Finally, readers were asked to list notable packaging materials, technologies or techniques that their companies have implemented or considered in the last year. The responses are a laundry list of the dynamic changes occurring in food packaging. Resealable packages, in-line vision inspection systems, better-quality barrier films and advances in PET bottles were among the improvements singled out. One respondent simply noted, "noteworthy packaging has come to be our best attention grabber."

Changes are occurring throughout plants as processors strive to deliver safer, higher quality food to their customers. Those changes are reflected in plants' packaging departments and the demands placed on the people who run them.

Subhead 1: Issues Impacting Food Packaging
Based on a scale of 1 to 100
Readers were asked to rate the impact of the following packaging issues on their businesses in the next two years:
Product safety 84.6
Consumer convenience 76
Material costs 76
Product shelf life 74.4
Increased line speeds 72.4
Packaging line automation 72.2
Secondary material costs 70.2
Increased flexibility/changeover 69.4
New packaging materials 68.6
Labeling & coding technology 64.2
Customized packaging 63.4
Film barrier-property improvements 59.8
Flexible packaging trend 59
Package size proliferation 57.2
Bulk sizes 56.4
Environmental concerns 56
Reclosability 54.2
Adhesive technology 53.6
Active packaging 50.8
Multifunctional packaging 47.4
Microwaveability 39.6
Source: Food Engineering's 2001 Packaging Trends Survey

Subhead 2: About the Survey
Readers of Food Engineering have participated in the magazine's packaging trends survey since 1986, providing an annual update to developments in the use of packaging materials and equipment. This year's survey was mailed July 12 to readers with packaging-related responsibilities and functions. Five weeks later, 177 usable returns had been received, a 19 percent response rate. The largest response groups included:

• Bakery products, 17.3%
  
• Meat products, 16.8%
  
• Beverages, 15.6%
  
• Dairy, 13.9%
  
• Flavors and ingredients, 12.1%
  
• Confectionery, 11%

Seven in 10 respondents were engineers, operations managers or general managers at their plants. Headcounts at their locations ranged from one to 49 (35.8%) to 50 to 249 (32.4%) and 250 or more (31.7%).

Subhead 3: Rating Issues Affecting Packaging Equipment Purchases
Based on a scale of 1 to 100
Accuracy 85
Safety 84.6
Compliance with governmental regulations 83
Ease of use 81.6
Cost 80
Flexibility 79.6
Easy changeover 79
Technical support 78.8
Speed 77.8
On-time delivery 77.8
Ease of integration 76.8
Controls integration 76.4
Guarantees 74.2
Training 70.2
Installation time 66.4
Modularity 62.2
Source: Food Engineering's 2001 Packaging Trends Survey

Subhead 4: Rating Factors in New-Packaging Development
Based on a 100-point scale of importance
Cost 87.9
Brand image 84.6
Consumer convenience 83.6
Printing/graphics quality 79.9
Product differentiation 78.9
Source reduction, downsizing 64.6
Source: Food Engineering's 2001 Packaging Trends Survey