More trends from Interpack - Globalization, Consolidation & Customer Intimacy

They say that sometimes we miss the forest by looking at the trees. If you didn't spend all of your time at Interpack looking at the machines, you could step back and see some evolution in the industry as a whole. I've attended Interpack many times, mostly as an end user, then as a trade group organizer, and now with press credentials. Each way of attending opens up a new perspective on the industry. I've aready commented on the China impact, the debut of linear motors, and trends in purpose-built robotics. Now let's look at globalization, consolidation, and shift from a focus on products to customer intimacy.

Interpack has always been an international event and this year was probably a record with 179,000 visitors from 121 countries and exhibitors from 60 nations. But as Ken Knight of General Motors has pointed out, being international is not the same as being global. Globalization involves common standards and strategies, not just a presence in more than one country. Global companies can experience success that exceeds the sum of their various international parts.

An example of a company moving from international to global is Bosch Packaging.

"Be global, act local" is a strategy that Bosch is employing. Part of being global is a common global machine design; and part of acting local is building that same machine, identical down to the part numbers, at various locations around the world, close to the customer. It's easy to see how this strategy can leverage global design talent to produce superior machines while meeting customer needs for documentation in a local language, local parts supply and regional control platform preferences.

The 2744 exhibitors at Interpack may belie the trend of industry consolidation. Smaller companies are being acquired by larger holding companies to provide one-stop shopping and to develop the infrastructure for globalization. Oystar Holding GmbH exhibited at Interpack this year for the first time in a 2000 square meter booth. Oystar has acquired 17 companies such as IWK, RA Jones, Aerofill, Manesty, and Erca-Formseal and boasts of 2,600 employees and consolidated sales of 450 million euros. Investors obviously see potential for improved operating efficiencies and sales growth in the packaging and processing industries.

Along with gobalization and consolidation comes a shift in focus from what suppliers have to offer to what customers need to have. In the past, a single company was rarely both a packaging and processing equipment supplier. Packaging equipment manufacturers distinguished themselves by the type of products that they made, such as flow wrappers or cartoners, not by the customers that they served. That is changing rapidly. Today companies distinguish themselves as solution providers to a particular customer segment such as dairy, cosmetics, pharmaceuticals or confectionery. In an era where automation is important, standards are lacking and end-user engineering talent is declining, customer intimacy is bound to be a successful go-to-market strategy in the packaging industry as it has been in other industries such as information technology.

I'd be interested to hear about the trends you may have seen at Interpack and how these three trends are affecting you and your company.

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