Capital spending targets packaging in 2015
March 10, 2015
by Dan Malovany
In Baking & Snack’s annual capital spending report, investing in packaging this year narrowly topped the list by our panel of experts, followed closely by processing equipment. The main reasons included tailoring packaging to better market new products for new or existing customers, repositioning the brand to make it more on-trend or upscale, and the perennial favorite, labor savings.
Integrating packaging into processing has become a higher priority as bakers and snack producers scout out creative ways to lower costs and streamline operations in an intensely competitive and price-sensitive market. That said, there is also a lot of optimism in the strength of baking and snack industries that’s spurring capital investment, according to the report, published in February.
La Petite Bretonne, for instance, spent $8 million last year to install a new chocolate croissant line in its Blainville, QC, bakery and another $4 million in robotics and vertical packaging systems. Dominique Bohec, vice-president of sales and marketing, noted its recent investment will provide enough capacity for the next two years, but the company is bullish on the croissant market, especially in the US where Mr. Bohec sees a tremendous opportunity for growth.
Likewise, in response to market demand, Lantmännan-Unibake USA recently invested $8 million into its artisan bakery in St. Petersburg, FL, to replace an old manual bread line that had 10 aging rack ovens with a new four-deck oven and to upgrade an inefficient freezing system. This year, the second phase of the project will involve upgrading its packaging system for the par-baked artisan bread and roll producer.
For suppliers of frozen par-baked and fully baked products to the foodservice and in-store bakery channels, investing in packaging often seems like a pretty straightforward process, but first perceptions can be deceiving when it comes to dialing down to the details.
At Tribeca Oven, featured in Baking & Snack’s March issue, the freshly baked artisan breads and rolls travel to an Alit enclosed dual-spiral cooler, set at 60°F, and an Alit spiral blast freezer at -40°F. Frozen products then pass through Safeline metal detectors before being bulk-packaged using a Niverplast combi case erector and liner. To streamline the operation, however, the bakery recently installed an ABV Manufaktur vision system that counts baguettes and frozen products and automatically drops them into cases. In addition to upgrading its bulk packaging capabilities, Tribeca Oven also added new systems so that it could enter the complex retail freezer case arena.
Packaging is an area where many companies such as Bodacious Foods are looking to upgrade their operations. “Bodacious Foods is investing more on the packaging side to improve efficiencies and capacity,” noted David Hays, owner of the Jasper, GA-based snack company. “Bottlenecks need to be opened. We are also expanding some new offerings with new packaging concepts.”
Pretzels, Inc., the Bluffton, IN, contract manufacturer for many of the nation’s largest snack companies, found a new opportunity by putting pretzel rods in single-serve packages similar to those used for beef jerky or taffy sticks. The company saw the concept at a packaging show two years ago, purchased the equipment and started sending out prototypes to its clients.
“We have had a lot of excitement, and it’s sparked a lot of interest from our customers,” said Chip Mann, president. “It’s a single-serve rod that comes in a 2- or 3-pack, and we’re now testing other concepts.”
For contract manufactures, investing in packaging equipment can be a tricky proposition. Although it’s often tempting to invest in the latest in automation, the systems need to be extremely versatile as consumer trends change or packaging designs become outdated, turning a $1 million investment into what some contract manufacturers call antiquated “lawn furniture” or “boat anchors” that sit in the maintenance department and do nothing.
In the end, efficiency and quality go hand in hand when it comes to major investments in both packaging and processing, according to Marc Schulman, president and CEO of Eli’s Cheesecake. The company attended Pack Expo last year searching for new ways to market its products and streamline its Chicago-based operation.
“You better have a packaging strategy to make new processing investments work,” Mr. Schulman explained. “We’re very responsive when working with our customers in brand development. We need to make pretty quick changes to do that. A lot of our investments have to be flexible or equipment needs to be moved in and out of a line to make a change in the product.”