This summer—meaning North American summer, as it was then a different season in the faraway part of the world where the events noted in this article took place—the Label and Tag Manufacturers Association of Australia (LATMA) and the Australia New Zealand Flexographic Technical Association (ANZFTA) announced their merger into a new organization called the Flexible Packaging & Label Manufacturers Association (FPLMA). The members held their first business conference as one group in Melbourne, Australia on November 10 and 11. The theme was “Changing the Landscape.” 

LATMA and ANTFZA agreed to unite for many of the same reasons that brought the American print industry trade associations Epicomm—itself an amalgamation of three former trade groups—and Idealliance together in a merger that became effective on July 5, just a few days after the official launch of FPLMA. 

Strength in a number

Like the U.S. organizations, the Australian associations had concluded that merging would be the best way to deal with the shrinkage of their respective memberships and with the consolidation taking place among their sponsoring suppliers. They also saw the merger as an opportunity to eliminate overlapping dues; reduce operating costs; present a more united front on behalf of the industry; and improve the quality and variety of benefits and educational programs for FPLMA members. 

Delivering on the latter promise was the main objective of the conference in Melbourne, an information-intensive event that presented more than two dozen speakers from Australia and a handful of other countries including the U.S. The program, broad in scope, covered macro issues for Australian and Asia Pacific businesses of all types as well as topics focusing on the outlook for printers and converters of packaging and labels. 

Why AU needs more than “start-ups and IT firms”

In their talks, a senior government official and two private-sector economists reviewed the state of Australia’s economy as a whole and discussed what it probably has in store for companies like those represented by FPLMA. They portrayed the Down Under economic climate as basically healthy and vibrant, but also exposed to structural changes that could make growth more challenging to achieve than in the past.

In a video address, Kelly O’Dwyer, federal minister for revenue, said that the time had come for Australia to transition from its heavy dependence on mining—the country is the world’s largest exporter of iron ore and lead—to new sources of revenue based on innovation. She warned, however, that “we can’t simply rely on start-ups and IT firms” to generate that kind of growth.

Some of it will have to come from established industries like packaging and labels, which O’Dwyer said the government recognizes as a sector worth investing in through programs designed to encourage innovation. These have included tax rate reductions for businesses up to $100 million (AUD) in revenue as well as more favorable depreciation schedules for small firms.

Time to stop playing “Minecraft”? 

Julie Toth is the chief economist of the Australian Industry Group (Ai Group), an employers’ organization representing the interests of more 60,000 businesses. She said that these firms operate in an economy that has not experienced a recession since 1991 and will see GDP growth of almost 3.25% this year. Although the “mining investment boom” of recent years is subsiding, mining remains Australia’s second biggest industrial sector. It is surpassed only by finance and insurance, with construction, healthcare, and professional services in the third, fourth, and fifth slots respectively.

All in all, said Toth, Australia is still regarded as a safe and stable environment for business investment. A decline in the value of the Australian dollar makes the country’s products less expensive to sell abroad. Domestically, she said, growth in demand for foods and beverages, pharmaceutical and medical products, vitamins, cosmetics, and toiletries bodes well for packaging and label producers.

Some obstacles confront the Australian economy, according to Toth. Although the national unemployment rate is a relatively low 5.6%, a decline in labor force participation has left nearly one-third of the working population stuck in part-time jobs. The country has shed about 190,000 manufacturing jobs since 2008, a loss that will be aggravated by the recent decisions of Ford, General Motors, and Toyota to stop producinga cars in their Australian plants.

Creating new jobs for Australians isn’t made easier by the country’s high labor costs, restrictive employment laws, and complex tax codes, Toth said. Finally, there is what she called “the tyranny of distance”: the great island nation’s geographical remoteness from other points in the global supply chain.

Meeting the “innovation imperative”

As a behavioral economist for National Australia Bank (NAB), the country’s largest bank, Dean Pearson studies how the ways in which people think, feel, and act affect economic decision-making both individually and collectively. He said that people’s personal attitudes about growth and change have a great deal to do with how well Australia will meet its “innovation imperative”: maintaining national living standards now that mining and other traditional pillars of the economy have put their boom years behind them. 

Since innovation and entrepreneurship go hand in hand, Pearson said, it’s encouraging that one in three Australians surveyed said that they would like to own their own businesses. On the other hand, only one in five think of the country as innovative—an indication, perhaps, that Australian businesspeople aren’t communicating how innovative many of their companies actually are. 

“The idea boom is a global phenomenon,” said Pearson, adding that Australia is a natural magnet for innovators and their creativity. But, he also warned against overinfatuation with the idea. Innovation is hard to define and quantify—this is why NAB has developed an innovation index that provides some benchmarks for measuring it. Until this kind of reality checking is done, “we need to stop calling everything a breakthrough, or disruptive,” Pearson said. 

The technical presentations fell under the general headings of global competition, packaging professionalism, creative solutions to commercial problems, the international outlook, and the impact of the Fourth Industrial Revolution on the production of packaging and labels. Following are short takes on a cross-section of them.

Bad press for packages in litter

The responsibilities of “packaging stewardship” were outlined by David Carter, CEO of the Packaging Council of Australia (PCA), which represents companies throughout the country’s packaging supply chain. Focusing on environmental issues, he said that packages “are not someone else’s problem” when it comes to how they are perceived in terms of waste, energy consumption, and resource utilization. 

Carter reminded the audience that brand owners’ names are on the packages that consumers, responding to cues from sources like the Keep Australia Beautiful National Litter Index (NLI), tend to view as environmentally harmful waste. He added that although discarded packaging represents only about 14% of the waste stream, it attracts a disproportionate share of the negative attention—an urgent reason for the packaging supply chain to work with the government to develop reasonable solutions for curbing litter and waste.

Of food and wine

Quoting a 2015 Fortune report titled, “The War on Big Food,” consumer packaged goods marketing expert Dermott Dowling (Creatovate) compared the giant food brands to “melting icebergs” that are becoming a little smaller and less relevant each year. He said that what consumers increasingly want, and what packaging and label producers must be prepared to help deliver, are “authentic” and “artisanal” eating experiences that satisfy their eclectic and sophisticated tastes. 

Winemaker and contract bottler Andrew McPherson (McPherson Wines, Ozpak) spoke of the fine points of designing, printing, and affixing labels for wine bottles. In his capacity as secretary of Wine Packagers of Australia (WPA), a coalition of contract packaging companies that bottle most of the wine the country produces, he promoted SizeMeUp, a WPA-sponsored web site that helps designers specify the correct dimensions for various types of wine labels.

Coming in “FIRST” with flexo

Headquartered in Evansville, IN, USA, Berry Plastics makes flexible, rigid, and hybrid packaging at more than 100 sites around the world (including one in Australia). Jennye Scott, Berry’s vice president for creative services, talked about the company’s embrace of high-quality flexography for package decoration after many years of relying on the dry offset process.

She said that one reason for Berry’s success with flexo was the certification it obtained for compliance with FIRST (Flexographic Image Reproduction Specifications & Tolerances), a quality management protocol administered by the Flexographic Technical Association. Working with a partner in Italy, Berry also has developed an indirect flexo printing method that Scott described as the first flexo solution capable of transferring images onto the surfaces of cylindrical containers and lids. This takes cost out of package production by eliminating the need for labels, she said.

“Premium is the new black”

Amber Bonney (Bonney Creative), a package designer and a brand identity specialist, noted that packaging remains “the one component consumers can’t avoid” among the media channels competing for their attention. She urged packaging professionals to get out into the real world of retailing environments and look at packages the way consumers do. According to Bonney, a belief taking hold in the minds of many brand owners is that “premium is the new black—everybody wants to be premium whether they are premium or not.”

Prof. Nicolas Georges is the director of food and agriculture innovation at Monash University’s Mondelez Food Innovation Centre (FIC), a research and consulting center for Australia’s food industry. He said that like every other industry, the food sector is moving towards its “Silicon Valley moment”: an inflection point where transformative technologies and disruptive solutions begin to take charge.

Packaging is part of the transformation, Georges said, and brand owners make  a mistake by not treating its design as a key component of developing new products. He recommended rapid prototyping and testing—services offered by FIC—as the best ways to take flaws out of packages and put consumer-friendly features in.

If it doesn’t add value, it’s out 

A 27-year veteran of packaging, James Edwards currently is the manager of the products development center at Inghams, Australia’s and New Zealand’s largest vertically integrated poultry business. The company, which has launched more than 100 new products this year, maintains 800 regular SKUs and another 200 seasonal and specialty units.

Inghams customers don’t want to see anything “boring” in the labels and packaging for the company’s products, Edwards said. This is why Inghams won’t approve anything in the design of a package that fails to add value to the product offering as a whole. New products—essential to protecting market share in a food segment as completive as poultry—require new packaging options that add value and create impact at reasonable cost.

“Any major packaging change has a significant potential impact on the bottom line,” said Edwards. Ingham’s heavy investment in systems and equipment for mass production means that packaging changes have to be planned and executed carefully, with the close cooperation of the company’s packaging service suppliers. 

Keeping packages and labels law-abiding

Invited by FPLMA to be a conference speaker, the writer of this article reviewed laws and regulations that have created mandates for consumer-product packaging in the U.S. Prominent among them are the required changes to the Nutrition Facts Label as announced by the U.S. Food and Drug Administration earlier this year.

The presentation also covered established or proposed rules for what packages and labels must disclose about “natural” ingredients; the presence of genetically modified organisms (GMOs); the effects of smoking; and the safety considerations of “vaping” with electronic nicotine delivery systems. Another topic was the growing but complicated market for packaging that is emerging from America’s increasingly widespread acceptance of marijuana, now legal in some form in 26 states and the District of Columbia. (An article recapping the presentation will appear next week.)

The conference program also featured a report on drupa 2016 by Steve Smith, a principal consultant of the Kirk Group; and vendor presentations by representatives of Landa Digital Printing, Mark Andy, CERM Benelux, and Esko.

Appreciation of apprenticeships

Present as special guest speakers were three graduates of apprenticeship training programs that prepare people for careers in Australia’s packaging and label industry.

The most newly minted member of the trio was Aaron D’Silva, voted “Apprentice of the Year” in 2015 and sent on a three-week tour of production and R&D sites in the U.S. under the auspices of the Flexographic Technical Association. He now operates a 10-color press for a gravure printing company in Melbourne.

Industry veterans John Murray and David Feenan said they were grateful for the momentum that apprenticeships and trade school training had given them in their early days as employment seekers. They agreed that the experience was the first step in a process of continuous learning that has guided them throughout their long and varied careers.