“There is no question that the stand-up pouch (SUP) market in the US has been growing very fast in the past five years. It reached 19 billion units in 2014 and that is expected to grow to almost 24 million by 2018,” according to Elias Tamer, Chief Executive Officer, PO Empaques Flexibles. The question is, can suppliers in the US keep up with the market? Could foreign suppliers offer something more?
“While converters in the US offer a high standard in quality, design and respond quickly to client needs, there are very strong opportunities for foreign converters to enter the US market,” Tamer believes.
What is missing in the US packaging market today? Why should US manufacturers consider a SUP supplier from Mexico, such as your organization?
There are two main reasons. First, cost competitiveness. Some studies indicate that the difference in manufacturing cost for SUPs between Mexico and the US is up to 15-18 percent. Secondly, opportunity or timing. During this fast growth, there will be a shortness in supply in very specific periods of time when projects emerge, until the market becomes more mature. This will create opportunities for foreign companies, particularly those that are ready in terms of quality, pre-press capabilities, HD printing, and innovation.
Could this reduction in packaging cost give manufacturers a competitive edge?
There are a few factors driving the growing use of SUP in the US, one of which is cost. Compared to other types of packaging, SUP is lighter in weight, uses less raw materials, there is less logistics cost at the beginning and end of the supply chain, and gives more shelf space for retailers.
The reduction in cost for manufacturers could come directly from the pouch itself, versus one manufactured in the US, which can be a deciding factor. If we add the opportunity factor mentioned earlier, we have a good chance of entering the US market.
What hesitations do you encounter from US manufacturers?
Some worries come from the regulations manufacturers have to meet, which are stricter in some industries. The gap has narrowed in recent years, in terms of technology, logistics, time of response, even the understanding of doing business between countries. That is why we find less hesitation today than before.
What type of companies or products could benefit from switching to SUPs? Why are SUPs considered innovative?
Pre-made pouches retain a majority share of the US SUP market and the non-retorted pouches used for human food application have seen high growth over the past five years and will continue to growth.
Companies packaging dried fruit and dehydrated foods can be the first looking for alternatives versus rigid packaging. Also companies in the household care market looking for a change from rigid packaging to flexible packaging, with less regulations than the food industry, could benefit.
How are consumer needs changing today? How can SUPs capture people’s attention?
SUPs have the advantage of offering the product more display area (front and back of the pouch) which helps capture consumer attention at the shelf, enhances engagement and brand loyalty. This is “solid gold” considering the time we have is sometimes just a glimpse.
Any final words of advice?
SUP is the best option when considering flexible packaging. The gaps between converters in different countries have been filled in terms of technology, quality, response, design, logistics and even the understanding of doing businesses, and now cost advantage and timing are setting a new stage.
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