NOVEMBER/DECEMBER 2019 Trial by Fire 3Changing of the CPA guard 4Late-stage differentiation 12Start-up brands get 0.5M free closures 16The state of the European co-packing market Baby food producer Initiative Foods rebuilds after a devastating fire, with a new plant, new equipment, and a custom-designed plastic cup. p. 6 RESOURCE GUIDE 2019-2020 THE OFFICIAL PUBLICATION FOR THE CONTRACT PACKAGING ASSOCIATION THE OFFICIAL PUBLICATION FOR THE CONTRACT PACKAGING ASSOCIATION 1119_CPcover.indd 111/6/19 9:54 AM packexpoeast.com REGISTER NOW FOR ONLY $30 March 3–5, 2020 Pennsylvania Convention Center Philadelphia, PA USA You Deserve Some Quality Time With Top Suppliers PACK EXPO East provides a valuable opportunity to make quality connections with top packaging suppliers, explore their latest innovations and experience technology in action. YOUR EAST COAST PACKAGING CONNECTION 400exhibitors 7,000 attendees Countless possibilities Produced by: Untitled-32 110/28/19 4:39 PM Contents EDITORIAL Anne Marie Mohan EDITOR mohan@packworld.com ART Dave Bacho CREATIVE DIRECTOR Kathy Travis ASSOCIATE ART DIRECTOR AUDIENCE & DIGITAL David Newcorn SENIOR VICE PRESIDENT, DIGITAL AND DATA Elizabeth Kachoris SENIOR DIRECTOR, DIGITAL AND DATA Jen Krepelka DIRECTOR, WEBSITES & DIGITAL DESIGN STRATEGY ADVERTISING Wendy Sawtell VICE PRESIDENT, SALES • wsawtell@pmmimediagroup.com Ron Levinson, SALES MANAGER • rlevinson@contractpackagingmag.com Lara Krieger PRODUCTION MANAGER • lkrieger@pmmimediagroup.com Kelly Greeby DIRECTOR, CLIENT SUCCESS Alicia Pettigrew MANAGER PRODUCT STRATEGY PMMI MEDIA GROUP Joseph Angel PRESIDENT, PUBLISHER Susan DaMario DIRECTOR, MARKETING Amber Miller SENIOR MARKETING MANAGER Bea Greany BRAND OPERATIONS MANAGER Sarah Loeffler DIRECTOR, MEDIA INNOVATION Janet Fabiano FINANCIAL SERVICES MANAGER Lloyd Ferguson FOUNDING PARTNER PMMI MEDIA GROUP 401 N. Michigan Ave., Suite 300, Chicago, IL 60611 PHONE 312/222-1010, FAX 312/222-1310 • CIRCULATION FAX 312/222-1310 E-MAIL info@packworld.com • WEB www.packworld.com PMMI The Association for Packaging and Processing Technologies 11911 Freedom Drive, Suite 600, Reston, VA 20190 PHONE 703/243-8555 • FAX 703/243-8556 • WEB www.pmmi.org Contract Packaging magazine is published for the Contract Packaging Association. For information on association membership, contact Paige Jarvi, 571/287-6818, pjarvi@contractpackaging.org, or visit www.contractpackaging.org. EDITORIAL CONTACT Have a question or an idea for an article? Contact Anne Marie Mohan, Editor, 312/961-9904. Contract Packaging magazine prefers to receive press releases by e-mail. Send to mohan@packworld.com. PUBLICATIONS MAIL AGREEMENT NO. 40064408 Return undeliverable Canadian addresses to Express Messenger International, P.O. Box 25058, London Brc, Ontario, Canada N6C 6A8 NOVEMBER/DECEMBER 2019 CONTRACT PACKAGING 1 VOLUME 15, ISSUE 3 NOVEMBER/DECEMBER 2019 DEPARTMENTS 2 Forefront 3 CPA President’s Letter 4 Industry News 18 CPA News 19 Membership Directory 23 New Products 25 Resource Guide 37 Ad Index 6 Co-Packer Rebuilds After Devastating Fire After a fire destroys 95% of its business, organic baby foods provider Initiative Foods shows grit and integrity as it rebuilds, launching a new facility and an innovative new package. 12 Two Exceptional Brands Each Gifted with 0.5M Free Closures A medical food for chemo/radiation patients and a low-sugar, carb, and calorie cold-pressed almond juice impress judges of Silgan Closures’ first Free Closures for a Year competition. 16 European Co-Packing Market is Growing Market report from the European Co-Packers Association depicts a healthy industry, but new requirements from CPGs for quality management and turnkey services present challenges. 6 1119_TOC-Mast.indd 111/5/19 4:12 PM Forefront ANNE MARIE MOHAN, Editor In today’s anti-plastic climate, contract packagers are no more immune than their customers to the increasing number of bans on single-use packaging, especially when their businesses are built around handling products in plastic packaging. One such business is Maverick Packag- ing, Inc., a contract packager of liquid products in Elkhart, IN. Among its services, it provides hotels with amenity products in bulk containers for refill- able dispensers and in small, single-size bottles. In October, California passed a bill that will directly impact a portion of its business—a ban on travel-size bottles used in hotels. The first phase, affecting larger hotels, is set to take effect in 2023, with significant fines for those establish- ments not in compliance. Says DeAnn Devenney, Director of Sales and Marketing for Maverick, “We see it as both a threat and an opportunity. We’ve always supported dispenser replenishing liquids in mostly gallon-size containers, so we’re looking at options to support this side in a more sustainable offering. In addition to that, we have to transition to support the replaceable unit.” California is most likely just first of many states that will adopt this policy; Devenney says she has heard that Canada and New York will soon be following suit. While it’s debatable whether larger, replaceable bottles or bulk options are more sustainable, or are even as hygienic, as single-use toiletries, there is no doubt the trend away from single-use plastics will continue. Moving forward, brand owners will be looking to contract packagers such as Maverick that are innovative, adaptable, and flexible to help them find new solu- tions to replace single-use plastics or to handle new package formats. Therefore, now is the time to ask yourself, will plastic bans be a threat to your organization, or will they be an opportunity? CP mohan@packworld.com Plastic Bans: A Threat? 1119_Forefront.indd 211/5/19 4:15 PMNOVEMBER/DECEMBER 2019 CONTRACT PACKAGING 3 President’s Letter BY MARK O’MALLEY, CPA President As I begin my term as CPA President, I inherit a vibrant and growing association that is stable and moving fast on several initiatives. We are focused heavily on growing value for each member, from our RFQ revision project (at presstime, we expect it to launch later this year) to the bi-monthly promotional newsletter delivered to over 10,000 contacts. Many of these contacts are brands and those needing our members’ services. At industry trade shows, we promote the world of contract pack- aging and contract manufacturing, and have collected the contact information for up to 400 visitors to the CPA Sourcing Center who are curious about how our members can help them. Our relationship with PMMI Media Group continues to provide value for our members in exposure and the ability to promote our unique off erings. Our Managing Director, Ron Puvak, has been meeting with brand owners to discuss their needs and how CP/CMs can help drive their innovations. We have also begun to reach out to other societies and associations that can provide mutual benefits to their members and CPA members. For example, we’ve started meaning- ful conversations with the European Contract Packaging Associa- tion, the Flexible Packaging Association, and the International Society of Beverage Technologists. Each of these groups represents potential opportunities for our members, and we hope to report more about these activities in the future. It has been over a year since we partnered with PMMI as our management partner. Thus far, it has been a positive experience, and the relationship gets stronger as we go. Our dedicated staff , which includes Paige Jarvi, Marco Paulina, Moe Volkert, and Leeza Varoujanian, provides general support, membership management, marketing, and website development. Without these folks, we could not operate as successfully as we do today. We begin our second year with PMMI confidant with the decision to move ahead with them. As I begin my presidency, I look forward to the future and being able to interact with the membership in this new role. The new leadership team will continue to make this association better for our members. CP Mark O’Malley is President/CEO of Paket Corp., www.paketcorp.com. By the time you read this article, my tenure as CPA President will be over. The orderly suc- cession of officers is now: • Tim Koers – Immediate Past President • Mark O’Malley – President • Patty Dodson – Vice President • Jon Hayward – Treasurer I want to thank Vicky Smitley, the former Immediate Past President, for her leadership and support these past two years. She is responsible for several positive changes to the Annual Meeting and the overall direction for the association, working tirelessly to grow CPA and make it better for every member. We expect Vicky to stay connected with CPA even though she is now enjoying a new relaxed lifestyle. When you next see her, just ask her about it (if you can get her to stop smiling). Mark O’Malley is transitioning into the role of president. As CPA’s Vice President, he has been the quiet voice of reason and guidance behind the scenes, always there to provide mentor- ship and support during the huge changes at CPA over the last two years. Our association is morphing. We are not the same associa- tion of just a few years ago. These are not my words, but the opinions of current members, as well as of former members who knew us then and have come back to see how we have changed. New, younger members have joined, bringing a new vitality and energy to our organization. We have seen our membership grow and the retention rate improve dramatically. As I close my presidency, I want to thank you all for the sup- port, camaraderie, and genuine fellowship I feel as a member of CPA. I feel truly blessed to have been selected for this role, and it is a highlight in my career. I’m not sure where I will go from here, but for the next two years, I will be helping the new leader- ship team. Tim Koers is SVP Operations for Quest Products Inc., www.questproductsinc.com BY TIM KOERS, CPA Immediate Past President A Changing of the Guard 1119_CPA President's Letter.indd 310/29/19 9:03 AM4 CONTRACT PACKAGING NOVEMBER/DECEMBER 2019 Industry News The global consumer goods contract packaging market is expected to grow at a CAGR of close to 8% during the period 2018-2022. That’s according to a new market research study by Technavio, which attributes this increase to the rapid growth of the global consumer goods manufacturing market in both developed and developing countries. In 2016, China and the U.S. were the leading countries in the global Consumer Packaged Goods market, followed by the U.K., Japan, and Canada. Notes the report, the increasing adoption of sustainable technologies and rising foreign direct in- vestment (FDI) are the key reasons for the rapid growth of the global CPG industries. Says a Technavio senior analyst for packaging research, “The increase in R&D investment in global consumer goods manufacturing will increase the volume of consumer products in the market. The rise in FDI in consumer goods manufacturing will attract new players to enter the market. The new player entry in consumer goods manu- facturing will increase the production volume in the global consumer goods According to the study, CPGs that work with co-packers usually outsource their secondary/tertiary packaging activities to a pure-play contract packaging company. However, transportation of consumer goods to the contract packagers and the return of the packaged goods to distri- bution centers can be time-consuming and costly. Several logistics players are incorporating contract packaging into their product portfolios to avoid such a process in the supply chain—a move that is expected to reduce overall logistics costs by 29% to 31%. In addition to the logistics costs, it will also reduce the time it takes to ship product. The study adds that the most common types of raw materials used for packaging are plastic and corrugated paper. The cost of raw materials is an important factor in determining the end products’ cost. Therefore, the fluctuation in raw material prices is a key challenge faced by contract packagers. The widening of the gap in the demand-supply chain in the last few years has also led to a considerable increase in the price of raw materials. During ISTA’s (International Safe Transit Assn.’s) 2019 Omni-Channel Packaging Strategies Conference held in Chicago in September, one SC Johnson executive noted that packaging automation is lagging be- hind software and digital technology when it comes to late-stage diff erentiation. He’s dead on, according to John Blake, Director of Research, Supply Chain from Gartner. Late-stage diff erentiation, a practice of applying primary or secondary packaging decoration at the point of order fulfill- ment and packaging in a distribution center or 3PL, aff ords Consumer Pack- aged Goods brands flexibility, allowing for quick turnarounds on promotions, sales, specialty kitting, and the like. The omni-channel requires a lot of late-stage diff erentiation when it comes to the physical act of packag- ing. But Dustin Mack, Director, RD&E, E-Commerce at SC Johnson, observed at the conference an incongruity in the practice. While there seems to be plenty of advancements in digital and software technology throughout the omni-channel, late-stage diff erentiation seems to lag behind in technological advancement. “We do a lot of sending product off to The Outlook for the Global Co-Packing Market Through 2022 Late-stage Diff erentiation Remains Largely Manual GLOBAL CONSUMER GOODS CONTRACT PACKAGING MARKET 2018-2022 1119_IndustryNews.indd 411/5/19 2:36 PMNOVEMBER/DECEMBER 2019 CONTRACT PACKAGING 5 Around the industry The Complexion Color portfolio from Cosmetic Design Group • Cosmetic Design Group , a WWP global company, has introduced three new makeup lines: the Skin Rituals line, Food For Beauty, and the Complexion Color portfolio. Among the products are a facial mask, a lip balm and a lip gloss, a mascara, a face powder, and others. • Precise Packaging has enhanced its contract manufacturing and contract packaging services to include the development of oil-based cannabidiol (CBD) products. These include topical acne and pain-medicated spray and massage oils, body sprays, haircare products, and more. • Pharmaceutical contract packager Reed Lane has added a dedicated room for vial and ampoule kitting to its cold chain capabilities in its facility in Wayne, NJ. • Commercial warehousing solutions provider Woods Distribution Solu- tions in Fort Worth, TX, has added food packaging, POS, displays, kitting, heat shrink/sleeve, and product as- sembly to its services. a third party [3PL] to do that physical repacking versus internally being able to add that late-stage diff erentiation,” Mack said. “That’s because of the cost and the strain it puts on the organization. What advancements might there be on the equipment side, and what are other com- panies doing in the supply chain to bring that late-stage diff erentiation at a cost that’s aff ordable?” he asked. The answer? It’s largely still done manually. “A lot of [late-stage diff erentiation] is manual,” explained Blake. “Even at the biggest companies at the biggest volumes, it’s amazing how much is still very manual. A lot of 3PLs are now able to negotiate their own terms with corrugated suppliers since they are buying so much volume of it for the purposes of late-stage diff erentiation. But it’s very much manual. The equip- ment costs a lot of money, and the volumes don’t justify it yet.” —Matt Reynolds, Editor, Packaging World magazine 1119_IndustryNews.indd 511/5/19 2:40 PMPackager Profile 6 CONTRACT PACKAGING NOVEMBER/DECEMBER 2019 Co-Packer Rebuilds After Devastating Fire After a fire destroys 95% of its business, organic baby foods provider Initiative Foods shows grit and integrity as it rebuilds, launching a new facility and an innovative new package. ANNE MARIE MOHAN, Editor D etermined, creative, and classy: These are the best adjectives to describe the response by Sanger, CA-based Initiative Foods following a devastating fire that leveled its baby food business on July 24, 2016. At the time of the fire—cause un- known—Initiative was a thriving, 14-year- old enterprise producing up to 300,000 jars and pouches per day of organic baby food products for co-manufacturing/co-pack- aging and private-label customers. The fire destroyed 95% of Initiative’s buildings, including 100% of its 200,000-sq-ft plant and all of the equipment inside, an entire warehouse of finished goods from its glass jar line, and most of its offices. Miracu- lously, no one was hurt. At the time of the fire, founder and President John Ypma was on the other side of the country. But as his son, Initia- tive Foods VP of Operations James Ypma, recalls, by the time his father arrived back in Sanger later that day, he had already decided to rebuild the business. “By the time he got home, it was very clear by the way he was acting that he wasn’t done,” says James Ypma. “I believe he was very, very proud of what the company had achieved in the previous 14 years, and he felt the opportunity to serve the market was still there. He wanted another shot, and he wanted to do it with a new building and new equipment.” In dealing with its staff of 150 people, now literally out of work overnight, along with its customers, who had just as unex- pectedly lost their product supplier, Initia- tive showed transparency and integrity. “In a press conference the next morning, we gathered all the employees for a meet- ing in front of the burn site, and he [John Ypma] noted that we were going to go through this trial together, so he would take care of them and our customers,” says James Ypma. This was a promise he kept. When mapping out the new business, John Ypma seized upon an opportunity the company had just begun exploring be- fore the fire hit: a switch from glass jars— formerly its bread and butter—to plastic containers, which involved the design of a custom package, along with equipment engineered to handle the new container. The road from devastation to a new, state-of-the-art plant involved collabora- tion and support from the community, customers, other co-man/co-pack compa- nies, and equipment and packaging sup- pliers, as well as an abundance of resolve and hard work by its staff. Entrepreneur sees potential in organic baby food Initiative Foods was formed in 2002, when John Ypma bought a former 200,000-sq-ft baby food plant that was no longer in use in Sanger. At that point in his career, John Ypma was working for Gerber and saw the potential to strike out on his own with a private-label business providing organic baby food offerings—a niche category at the time. Sanger provided a perfect site for sourcing ingredients. Located in California’s Central Valley, it offers easy access to crops such as squash, pears, sweet potatoes, carrots, and other fruits and vegetables. Washington apples are also easily sourced. “It was very easy to get high-grade, fresh products to process, as opposed to using a purée or an IQF [individually quick frozen] ingredient,” says James Ypma. “So we were able to bring a lot of these advantages to the marketplace.” When John Ypma began the business, Initiative packaged products in glass jars. In 2011, it began offering flexible pouches as well. At the time of the fire, it was pro- ducing 150,000 units per day of glass jars over one shift and 150,000 units of flexible pouches over two shifts. It had also just started dabbling in plastic containers. A disaster, but not one without miracles As James Ypma shares, the fire that de- stroyed most of Initiative’s business could have been a lot worse. It began around 2:35 a.m. on a Sunday morning, just min- utes after the employees had left the facility. In fact, it was first reported by some em- ployees who had stopped at a nearby gas station and saw the blaze. James Ypma says he got the call that the building was on fire at 2:45 that morning. The only person on- site at the time was a security guard, who escaped unscathed. Seventy-five first responders battled the 1119_PackProfile.indd 611/1/19 10:30 AMNOVEMBER/DECEMBER 2019 CONTRACT PACKAGING 7 six-alarm fire, which ultimately was the largest in Sanger’s history. But luckily, de- spite the fear that the fire would spread to nearby buildings, firefighters were able to contain it. Another miracle was that some of the hazardous equipment and materials inside the plant didn’t ignite. “We had pro- pane tanks, we had a diesel tank, we had all sorts of typical plant items that become hazardous in that situation, but none of them were affected,” says James Ypma. Following the fire, the community rallied around Initiative and its employees. The day after the fire, John Ypma’s wife, Jan, put out the word via local radio that Initiative would be holding a reverse job fair at its off-site warehouse. Forty companies signed on, ultimately hiring a number of Initiative employees on either a full- or part-time basis. In addition, a GoFundMe page set up by John Ypma’s daughters, Carolyn and Meredith, to help employees financially raised $60,000. “It was just a few weeks before school started, so it was a tough time for everyone,” says James Ypma. “We were able to give each family around $600 for school supplies and general use while they got going on their new jobs.” For its customers, Initiative connected them with co-packers that were able to de- liver baby food to them with- in a month. “The main focus was to keep the customers’ shelves full, because they had just lost their source of baby food at the time. We were in the best position to help them do that, since we had the formulas, we knew the process, and we had the relationships with some of the co-packers already. So, the goal was to keep them fulfilled with the hope—the uncontracted hope—that when we got back into business they would remember that and look to us as a partner again. Most have, but some have been really happy with their [new] situation, and they’ve stayed. With respect, our goal is to try to win those people back and to keep those who have come back satisfied.” The road to rebirth The first step in rebuilding the business was to find a site for a new plant. Accord- ing to James Ypma, Initiative looked at sites in Nevada and around California, but “nothing felt quite right.” The solution, Initiative Foods President John Ypma, left, and VP of Operations James Ypma proudly display their new custom plastic baby food cups while standing in front of new Navatta processing equipment painted with a phoenix to celebrate their business’s rebirth after the fire. Initiative Foods worked with TricorBraun to develop a custom cup for its private- label products that offers differentiation, e-commerce compatibility, and convenience for on- the-go consumers. 1119_PackProfile.indd 711/1/19 10:34 AMNext >