The Power of Proliferation
Flexible packaging provider Exopack Holding Corp., the latest news is in the SKUs. This paper and plastic packaging converter, headquartered in Spartanburg, S.C., boasts 19 production facilities across North America and the United Kingdom, and supplies approximately 25,000 SKUs to 1,300 diverse customers. In fact, steady SKU proliferation is a core reason for the consistent growth Exopack has realized in its product categories, which include food, beverage, consumer products, and pet food. Exopack’s net sales reached $853 million last year, making it one of the largest flexible packaging companies in North America, and it holds a lead market share for pet food resealable bags.
Hank Welter, director of operations, Exopack Consumer Food and Specialty, confirms the ongoing SKU proliferation trend, and explains new SKUs can stem from consumer packaged goods (CPG) companies’ national and regional promotions packaging, as well as from their strategic plans to produce a consistent number of packages, but provide an increased array of products, through such tactics as brand extensions.
In a recent online post for Forbes’ CIO Central column, Exopack Chairman and CEO Jack Knott characterized the “huge” and continually growing number of SKUs as a source of “challenges—and opportunities” for flexible packaging providers. In other words, when a CPG customer approaches a flex-pack converter to produce a new package design, it could be up to the converter to make the production feasible. Welter explains, “We work closely with our customers to keep SKUs to a minimum, as it helps keep the product lineup manageable. In many cases, consistent package sizes (which translate into web widths) can help in managing costs and efficiency of multiple SKUs in a family of products.”
It follows, then, that achieving efficiency has been the guiding objective during Exopack’s continual investment in state-of-the-art equipment and technology over the past five years—whether economic conditions were calm or turbulent—to the tune of more than $130 million. “Trends are for efficiency,” Welter maintains. “Speed is important, but it’s the set-up time and changeover that’s the name of the game today.”
To that end, Exopack moved to improve its printing platform across its facilities with the installation of three new presses over the past 12 months. “We will continue this pace into the future, removing older, less-capable assets to improve efficiencies and to continue to keep pace with CPG expectations,” Welter adds.