Smithers Pira: Why is this event important to the packaging market?
Keith Strope: I think this program gives a broader view than other packaging conferences – both investment professionals as well as participants like me will have a platform to give their opinions on the future of packaging M&A, value creation and more.
Smithers Pira: What are you looking forward to the most in the future?
Keith Strope: I think packaging is a great industry. I’ve always said that products, at least in my lifetime, are not going to be poured out of a computer. How will the products be packaged? What does that truly mean to our future? What is the future of plastics, and what substrates will be more prominent looking out 5 – 10 years from today? Is flexible going to gain footage? How are e-commerce and digital strategies going to affect packaging?
Smithers Pira: What innovations would you like to see in the future of packaging?
Keith Strope: It’s different when a package is sitting on a store shelf versus when someone is ordering it online and getting it shipped – the package has to perform differently. What is going to be innovative for a bottle being shipped and handled multiple times is interesting. There are innovations that will solve these problems someday.
Smithers Pira: What are the drivers and outlook for packaging investment opportunities?
Keith Strope: I think that there is a proliferation of brands at the consumer brands level. Having the ability to develop and provide packaging that supports the trend is important.
Through TricorBraun’s business and trends, brands are trying to get more personal, for example, instead of being broad – for example selling just shampoo, shampoo is being targeted towards focusing on women, or babies, or men, or kids, etc.
What this implicates is more volume in terms of the packaging supply but smaller runs because they’re geared towards to particular markets and end users. And in regard to substrates – we recently made an acquisition into the flexible packaging area vs. rigid packaging (our core focus previously) and that’s somewhat of a convenience factor for the consumer, but also there is a factor of sustainability because we ship a lot more flexible packaging folded down in one container than you would with rigid packaging.
In regard to future opportunities:
The opportunities are strong in our segment but also in flexibles and thinking about other substrates and offerings. How can we provide more value to the target and existing customer base - whether that’s in a particular packaging type or a value added service that we can provide? For example today TricorBraun is very good at designing packages in terms of engineering, design services, marketing insights for the segments we provide packaging for.
Smithers Pira: Winning strategies: Best of breed versus generalist, high margin vs. high income
Keith Strope: High margin is going to win versus high volume clearly but it’s all about the service and value you provide. Consumers and companies are not going to pay up unless they’re receiving a true value ad from an organization.