The Power of Proliferation

Flexible packaging provider Exopack Holding Corp., the latest news is in the SKUs. This paper and plastic packaging converter, headquartered in Spartanburg, S.C., boasts 19 production facilities across North America and the United Kingdom, and supplies approximately 25,000 SKUs to 1,300 diverse customers. In fact, steady SKU proliferation is a core reason for the consistent growth Exopack has realized in its product categories, which include food, beverage, consumer products, and pet food. Exopack’s net sales reached $853 million last year, making it one of the largest flexible packaging companies in North America, and it holds a lead market share for pet food resealable bags.

Hank Welter, director of operations, Exopack Consumer Food and Specialty, confirms the ongoing SKU proliferation trend, and explains new SKUs can stem from consumer packaged goods (CPG) companies’ national and regional promotions packaging, as well as from their strategic plans to produce a consistent number of packages, but provide an increased array of products, through such tactics as brand extensions.

In a recent online post for Forbes’ CIO Central column, Exopack Chairman and CEO Jack Knott characterized the “huge” and continually growing number of SKUs as a source of “challenges—and opportunities” for flexible packaging providers. In other words, when a CPG customer approaches a flex-pack converter to produce a new package design, it could be up to the converter to make the production feasible. Welter explains, “We work closely with our customers to keep SKUs to a minimum, as it helps keep the product lineup manageable. In many cases, consistent package sizes (which translate into web widths) can help in managing costs and efficiency of multiple SKUs in a family of products.”

It follows, then, that achieving efficiency has been the guiding objective during Exopack’s continual investment in state-of-the-art equipment and technology over the past five years—whether economic conditions were calm or turbulent—to the tune of more than $130 million. “Trends are for efficiency,” Welter maintains. “Speed is important, but it’s the set-up time and changeover that’s the name of the game today.”
To that end, Exopack moved to improve its printing platform across its facilities with the installation of three new presses over the past 12 months. “We will continue this pace into the future, removing older, less-capable assets to improve efficiencies and to continue to keep pace with CPG expectations,” Welter adds.

However, it’s the combination of efficiency with a strong service component that Welter believes can truly set a flexible packaging provider such as Exopack apart from the competition. “Just adding new equipment with more printing decks does not ensure better print on the package,” he explains. “It is the knowledge of the systems and how to apply them properly along with support systems that make those assets produce consistently high-quality graphics every time.”

Moving forward with flexo

With its sights firmly set on ascending to new heights in production efficiency, it’s no surprise that Exopack’s printing operations favor the flexographic process. Exopack offers both flexo (10-color) and gravure (8-color) printing services, but its press lineup reveals both the company’s current production focus and its likely production future—the company runs approximately 50 flexo presses and just four gravure presses across its facilities. “Overall, flexo provides better speed-to-market, which is critical in the market today, in general, and with [SKU] proliferation,” Welter observes, adding, “Flexo has made tremendous strides to improve quality and efficiency over the past decade or so.”

Exopack’s global converting perspective—born of its UK-based production facility and its Global Packaging Linx (GPL) strategic initiative, which aims to procure flexible packaging solutions from a select network of packaging manufacturers worldwide and in turn keeping costs to customers as low as possible—enables it to maintain a broader view of where flexo and gravure technologies are headed. “The flexo market is better in the U.S.,” notes Welter. “Changeover is faster, changeover and uptime are even more important, and clean-up between jobs is automated.”

He believes flexo plate technologies (imaging and exposure techniques along with improved materials), as well as finer line anilox rolls and improved press capabilities, have been the major catalysts for improvement in print quality. “The true impact is the culmination of small improvements across all variables that have and will continue to drive us forward,” Welter states. “The real test moving forward will be lining up the improvements in plates, aniloxes, inks. and presses … to optimize the final printed product.”

Meanwhile, Welter sees gravure still holding on to a larger following (vs. flexo) in other regions of the world, and still capitalizing on its core advantage of larger cell volumes, which yield a quality standard best suited (from a time and cost standpoint) for longer runs. Though gravure sleeves have taken steps toward time and cost issues inherent to the process, gravure technology in general is “similar to thirty to forty years ago,” Welter says.

He believes gravure will continue to maintain its place in packaging, as there are still many customers who demand the process and still some areas where gravure capabilities are required. In addition, he notes there may still be cases where replication of intricate lettering or symbols sees some benefit from gravure processes. “Any advances in [cost, speed, and set up] will be beneficial” to gravure’s continuing viability,” Welter sums up.

While Exopack may review customers’ packaging designs and artwork to offer input on the best print process for a given job, most CPG companies dictate at the outset whether a package should be printed using gravure or flexo, Welter reports. And for now, the advances in flexo print quality are proving sufficient to meet the majority of Exopack customer needs—needs which Lani Craddock, VP of marketing and innovation development, describes as “high-resolution, high-fidelity, and close to photographic quality.” Meanwhile, gravure printing frequency is decreasing at Exopack; Welter notes that just three of its facilities offer gravure printing capability, and none is dedicated exclusively to delivering the process. He predicts that the number of facilities offering gravure will decrease to two in time.

Efficiency extensions

When a company organizes a competitive strategy around achievements in efficiency, one might assume that digital printing would be a natural extension of that company’s capabilities. Craddock acknowledges that Exopack “is watching and investigating digital technologies,” and that the “zero set-up” aspect of the technology is a distinct advantage. However, any digital printing Exopack currently does is accomplished with outside resources, and applications are limited to mock-ups and sales samples.

Craddock reports that issues precluding a direct investment in digital include the technology’s current speeds and substrate capabilities. She notes that while digital remains centered in the label arena and requires specific substrate configurations, Exopack runs polyethylene terephthalate, polyethylene, paper, and a range of laminations. Print width capability is also a bit of a barrier to digital, she adds, as Exopack typically runs an average of 52-inch web widths. Finally, Craddock emphasizes that improvements in ink laydown and ink chemistry will be critical to justifying an investment. “Currently there’s a difference in color saturation and fidelity [with digital technology],” she remarks, summing up, “We’d love to have [the digital printing] option for smaller runs. It’s just a matter of time.”

It could be said that another natural extension of strategic efficiency is environmental responsibility, and in the sustainability arena, Exopack is focused on upfront preparation to accommodate each customer’s unique goals and priorities. “Everyone is interested,” affirms Welter. And that interest might manifest in the form of substrate down-guaging, the use of soy inks on paper substrates, the use of water-based inks on plastic substrates, or a general reduction in material use to lesson costs for drying, energy use, and waste.

As far as aligning sustainability initiatives with a particular family of substrates, “It all comes down to what customers want,” Welter says, explaining, “Exopack is a substrate-neutral company capable of converting [paper or plastic]. It really comes back to the brand owners and what they are trying to accomplish for their products and customers. There are benefits to many substrate combinations and no absolutes.”

Indeed, for Exopack, the “no absolutes” mentality could aptly sum up a company that hasn’t built its operations around a standard set of flexible packaging production capabilities, but rather an adaptable printing technology and knowledge platform that continually responds to changing and expanding customer needs. pP