Cold as ice
Reviewing key equipment considerations for frozen food manufacturers
September 24, 2018
by Sean Riley
According to the 2018 Global Trends Impacting the Market for Packaging Machinery report—produced by PMMI, The Association for Packaging and Processing technologies—there a currently four major macro factors driving packaging trends for manufacturers of frozen foods.
Specifically, these Big Four comprise e-commerce; shifting global demographics; growth in disposable income; and educated consumer.
The growth in population across much of Europe and North America has stalled and, in some cases, showing slight declines. Conversely, populations have continued to grow in the developing regions of globe. As increases in the population naturally lead to a growth in demand for consumer goods, there is ultimately an increase in market demand for packaging and packaging machinery.
As the PMMI report points out, the global middle class is set to grow at an average of 160 million people per year through 2030, with rapid growth in China, India, Indonesia, Thailand and Malaysia. All told, the
the next billion entrants into the global middle class will in fact primarily be residents of Asia.
The growing middle class means that a declining proportion of the population is willing to work for low wages. Rising salary expectations in individual countries may affect where investment is made in both new and existing facilities, as well as the use of automation and robotics for companies to reduce labor costs.
In this light, food is no longer purchased for immediate consumption, as higher incomes allow for more expensive grocery shopping trips. As salaries increase and urbanization continues, buying habits of end-users are also changing, as a growing middle class now finds itself with an increased disposable income. This has given a more substantial proportion of the population access to foods that were once unaffordable, including processed food products.
Notably, many frozen foods are now finding new outlets in areas that did not previously offer access to refrigeration, or where refrigeration was too costly.
Additionally, Millennials recently surpassed Baby Boomers as the most substantial generation. As noted numerously, preferences between these two generations vary significantly, with the younger generations
clearly preferring premium, sustainable goods and convenience products much more than their predecessors.
This will create not only a change in the products produced, but also the packaging methodology and packaging machinery used to manufacture them.
As Millennials become the dominant global consumers, reducing the depletion of natural resources such as water, non-renewable energy sources, and rainforests are all top-of-mind items.
As a result, manufacturers are expected to drive environmentally friendly solutions throughout their operations.
In addition to heightened corporate social responsibility, tighter regulations and heavy taxes related to the protection of the environment are driving investment in solutions that optimize the use of resources, minimize damage to the environment, and reduce waste.
Finally, since e-commerce became a valid market driver in the past five years, CPGs in the frozen-food space have anxiously awaited some indication of how it can get into this space.
While Amazon shook up the retail food sector in June 2017 when it purchased Whole Foods for US$13.7 billion—now approaching a 20-percent share of the online grocery market in the U.S.—Walmart is not taking this defeat lying down, launching or testing several new technologies, such as Scan & Go, to enable consumers to receive packages when they’re not home, while also expanding its online delivery service to include more products.
With a litany of consumer changes impacting the frozen-food industry, next month’s PACK EXPO International 2018 packaging and processing technologies trade show will offer a prime opportunity to gain critical insight into the evolving consumer mindset and the equipment these manufacturers will need to have to keep pace.