The German packaging industry, which is recognised for its state-of-the-art packaging solutions, was estimated to be worth Euros 27.6 billion in 2006. It is one of the worlds largest packaging industries, with a share of 20 per cent in the European packaging industry and 6 per cent in the global packaging industry. The share of the packaging industry in Germany's GDP is approximately 2 per cent.
The German packaging industry comprises of a number of small and medium sized packaging companies. The leading packaging manufacturers in Germany include Krones AG, Geresheimer AG, Rob Leunis and Chapman Group, etc. This apart, the worlds leading packaging manufacturers such as Tetra Pak, Rexam Plc, 0-I Global, Mayr-Melnhof Group and Amcor Ltd have their manufacturing plants in Germany. In 2006, the industry witnessed an impressive growth rate of 8.7 per cent (in terms of sales). The recent growth of the industry is mainly attributed to product innovation and creativity demonstrated by the industry.
Germany is also recognised for its excellence in the packaging machinery segment. It is a leading supplier of packaging machinery, accounting for approximately 22 per cent of global packaging machinery production, which is even higher than Italy and US with shares of 16 per cent and 13 per cent, respectively. The industry comprises of 300 packaging machinery manufacturers, which employ around 26,000 people. In recent years, the German packaging machinery industry has grown at a rapid pace and reported sales of Euros 4.23 billion in 2005. The growth of the industry is mainly export driven.
Germany exports 90 per cent of its packaging machinery, which is worth Euros 3.8 billion. The key markets for the German packaging machinery industry are US, Russia, UK, France and China. In addition to exports, the growth of the industry is also driven by its ability to supply highly automated packaging machinery, which is particularly demanded by manufacturers of branded products in the Western European countries. The industry has successfully served the food, pharmaceutical and cosmetics packaging manufacturers, who require flexible filling and packaging plants for smaller batches. This apart, the industry offers the individual machines of a plant as modules, so that they can be combined differently if required.
Emerging trends
In Germany, approximately 50 per cent of the total demand for packaging is generated by the food industry. Beverages industry accounts for around 33 per cent of the total packaging sales, with soft drinks remaining the most important end-use sector in the beverage segment for packaging usages. Since these two sectors are the largest end-use sectors of packaging, the German packaging manufacturers are focusing on introducing innovative packages mainly in the food and beverages segment. For instance, the overriding trend of an-the-go consumption food and multi-component snacks has led the food and confectionery packaging manufacturers to introduce small handy bowls or tubes. The ready-to-eat food or fresh salad is now packaged in transparent thermoformed bowls, with added dressings in plastic pouches and adjuncts in portion trays. In addition, a small spoon is offered with these bowls. Besides, flexible tubular packaging is increasingly used by the German food manufacturers to package puddings, ice cream substitutes, peanut buffer, and apple puree (apple sauce). Also, the demand for retort packaging in which food can be pre-cooked or sterilised by the manufacturer is increasing rapidly.
The German packaging manufacturers are not only focusing on developing innovative packaging for protecting the food products, but also on the aesthetic value of the packages. The leading brand manufacturers in Germany are demanding packages that provide information about the product and influence the consumers final purchase decision. Hence, the German packaging manufacturers are using new labelling, printing and finishing techniques to enhance the visual appearance of the packaging. For example, STI Group has produced an alcoholic beverage package for Asbach Uralt, a leading beverage manufacturer in Germany. The folding box is made from the 6-colour offset enhanced corrugated cardboard in F flute, with UV coating. The seal, as well as part of the logo are emphasised by gold foil embossing. This apart, the Lenticular label is applied to the back and front of the box and a colour code printed on the box classifies the maturity of brandy. The 2-phase embossed elements give this package a sophisticated appearance that is also evident to the touch. The new package has played a key role in the creation of the Asbach brand image.
Further, the German packaging industry is successfully applying state-of-the-art process engineering in combination with innovative packaging materials to deliver novel packaging solutions. This becomes evident from the food packages that comprise a foil, which changes its colour in order to show if the cooling chain has been interrupted. There is a rising usage of multi-layer foil in the food industry provides protection against light, moisture and oxygen. This apart, the German packaging manufacturers have been especially innovative in the field of microwavability and in improving barrier characteristics of films.
Converting industry
Paper-based packaging represents the most preferred form of packaging in terms of volume. It accounts for 47 per cent of the total production of the German packaging industry, while plastic packaging has a share of 22 per cent in total production of packaging. However, in terms of value, plastic packaging commands a higher share as against paper-based packaging. The German plastic packaging industry accounts for 44 per cent of aggregate sales of the German packaging industry, followed by paper-based packaging industry with a 32 per cent share. Metal and glass packaging industries account for respectively 9 per cent and 22 per cent of the total production of packaging. In terms of value, the share of these two industries in the aggregate sales is respectively 18 per cent and 6 per cent.
Paper: Germany is the fourth-largest supplier of paper and board in the world, behind the US, China and Japan. The German paper-based packaging industry is estimated to be worth Euros 8.9 bn in 2006 and has witnessed a growth of 6 per cent in the same year. Consumers value paper-based packaging especially folding cartons for its environment-friendliness, light-weight and printability. The German folding carton industry comprises of approximately 170 folding carton manufacturers. The leading folding carton manufacturers include Mayr-Melnhof Karton AG, STI Group, Van Genechten Packaging, CD Cartondruck AG, etc.
The recent growth of the German paper-based packaging industry is largely attributed to the rise in demand for folding cartons by the frozen food and confectionery industry. The German folding carton industry has offered these two sectors specialised packaging solutions through technology and finishing innovations. The manufacturers are using processing technologies such as metallisation, special embossing and relief printing creatively to add value to their packaging. For instance, Rob Leunis & Chapman Group (rlc) has introduced an innovative folding carton for 1-Mobile, Germanys leading provider of mobile telephone services. The company has developed a square shaped white carton embossed with the typical square digits of 1-Mobile. The GlobeTrotter GT MAX card for laptops is revealed, as the consumer slides the outer carton to the left and right. An inlay holds the card, which the company offers to enable high-speed wireless internet access. This apart, a fold-out prop is die-cut into the back to hold the carton like a picture frame. The new carton fetitures multi-colour printing with UV matte coating and embossing.
In addition to technology and structural innovations, the improvement in productivity combined with diversification into other services such as shelf-ready displays has helped the industry to grow further.
Though the German paper-based packaging industry has witnessed a healthy growth in the recent years, the rising energy and raw material prices combined with decreasing value per tonne has reduced the profitability of paper-based packaging manufacturers. This apart, the industry is facing an intense competition from their counterparts in the Eastern European countries. However, the industry is expected to maintain its global position by utilising its competitive advantage in technology, production quality, supply reliability and logistics.
Plastic: In Germany, plastic packaging has gained popularity in the past few years. The industry has registered a significant increase of 10% in sales to Euros 12 bn in 2006. The growth is largely attributed to the rise in demand for reclosable, shatterproof and lightweight PET plastic bottles in the stilled bottled water and soft drinks market, particularly in carbonates and juice drinks. This apart, in response to the rising demand for environment-friendly packaging, the companies have introduced various forms of biodegradable plastics made from corn. This biodegradable plastic material is not only environment-friendly but also cost-effective. As a result, the demand for biodegradable plastics by packaging industry has increased in recent years. This apart, the multi-layer films with altered characteristics that could improve the barrier characteristics of packaging material have witnessed wider applications.
Glass: In the recent years, the German glass packaging industry has witnessed a decline in production, owing to the sharp rise in energy prices as well as the rules requiring deposits on beverages. This has led many glass packaging companies to cut their production capacities.
Metal: The German metal packaging industry has witnessed a growth of 11% in 2006. This remarkable growth is largely driven by the rise in domestic demand for metal cans as well as good utilisation of production capacity.
Areas of concern
In recent years, the rising raw material prices as well as elevated energy and transport costs have been key areas of concern for the German packaging industry.
This apart, rise in brand theft has affected the German packaging and packaging machinery industry. According to a study conducted by German Engineering Federation (VDMA), not only spare parts of the packaging machine are counterfeited, but the whole machine is also duplicated in design terms. This has led the German packaging and packaging machinery manufacturers to use more sophisticated and multi-layer security techniques.
To counter these challenges the German packaging manufacturers are focusing on complete utilisation of production capacity as well as introducing innovative packaging solutions.
(Courtesy: ITC Bulletin --Onboard)