Contract Packaging Magazine February, 2009 MAILWAY Q&A WITH STEVE WHITEHOUSE Bradford-based Mailway Packaging Solutions is one of the UK’s leading contract packers – a position it has proudly held for the 30 plus years it’s been delivering its innovative solutions to a veritable who’s who of bluechip companies across markets as diverse as wines and spirits, fine fragrances, health and beauty care products and confectionary. To mark our first issue, Contact Packaging Magazine talked co-packing to Mailway’s commercial director, Steve Whitehouse. CP Mag: What factors do you feel are contributing to the recent increased interest in contract packaging? Steve Whitehouse: You only have to look at the current economic climate to quickly grasp the reason for the surge in interest. In a nutshell, manufacturing costs are increasing at the same time as product demand is falling, which means manufacturers across the board are looking to cut costs and generate demand for their products– a scenario that favours the contract packer. From a cost-saving point of view, the manufacturer will look for savings throughout its supply chain and in the majority of cases these savings are most easily achieved in non-core areas of the business. As a result, many internal contract packing operations are being shelved in favour of outsourced services. A switch that means overheads are reduced and costs are only incurred on these services as and when they are needed. On top of this, brand owners are also seeking new means of increasing demand for their product(s) – a process that is made more difficult by the credit crunch’s impact on people’s willingness to spend. What this means in practice is that there is a growing reliance on contract packers to deliver stand-out solutions that provide added value, whether that be through free gifts, sales / price promotions or over-labelling services that see products re-packaged for sale in countries where demand is higher. CP Mag: As you’ve outlined, some of the current interest in contract packaging by brand-owners can be attributed to the credit crunch. Would you say this is happening across the board? SW: There are examples of this across the board from small companies requiring simple co-pack services to major manufacturing businesses seeking large in-house operations.
And while a number of major distribution companies do have their own contract packing facilities none provide the range of services and capabilities of a specialist co-packer. As a result, a lot of major brand owners already rely on outsourced packing services, or out-sourced in-house services of the type we offer, and this number will continue to grow as the value in using contract packing industry specialists becomes ever more apparent. CP Mag: In the past, major brand owners were often unwilling to use contract packaging companies as they considered their solutions to lack an innovative edge. What is Mailway doing to counteract this preconception? SW: I find this a strange question, because we’ve always found that the only way to stand out from the crowd is through innovation – whether that be the solutions we offer or the technical developments we make to assist clients. In fact, it’s fair to say the main reason we’ve managed to maintain our competitive advantage for so long is our ability to develop and deliver innovative solution after innovative solution. A prime example of this process in action is our patented Glaspak system. Developed following the identification of a market need in the early 90s, it provides the whisky and spirits industry with a means of delivering safe and secure free glasses on promotional bottles. Utilising a custom-made vacuum fitment it has been used extensively by all the major UK distilleries, plus a number of independent spirits businesses. In fact, we recently passed the 50million unit mark when working on a project on behalf of Burn Stewart Distillers Ltd’s Scottish Leader brand. As well as patented solutions, we’re also known for our innovative approach to technical development. And many a time we’ve gone back to the drawing board for a client in order to automate / semi-automate a production line in order to deliver a per unit cost within budgetary requirements. Therefore, in response to the question – this supposed preconception of the industry is something that in my opinion does not apply to Mailway. CP Mag: Which types of packaging are most important to the business? SW: Historically, the most important packaging tended to be the packaging that made you stand out from the competition, and so my thoughts would be immediately drawn to Glaspak, Sunpaq and our various sleeving options. But today, the emphasis on sustainability and recycling can’t be underestimated and so I’d say that any solution that allows a brand-owner to claim full recyclability, while also retaining cost-effectiveness – like Sunpaq and the Gold Starpack
winning solution we developed for Nude Skincare – is the most important solution in a contract packer’s armoury. CP Mag: One of Mailway’s most interesting products is the SunPaq retail display packaging concept, for which it has the European licence. How did you come across this and how do you persuade brand owners to take it up? SW: Our commitment to finding and developing solutions for the UK and European markets is such that we are always actively looking for products and ideas for solutions that will have a real impact. Sunpaq was, and still is, an astounding American success story and when we came across it we were astonished that nobody had successfully introduced it into either the UK or Europe. Not only was it fully recyclable, high impact and a cost effective alternative to blister, skin and shrink packaging solutions, but it had 80million unit sales per annum in the US to demonstrate its marketability. We invested heavily in the latest fully automatic manufacturing line, secured the European licence from the US and appointed Chesapeake Branded Packaging as our print and sales partner before unveiling Sunpaq to the market. As for the job of persuading brand owners to take it up. Well, it hasn’t taken much persuasion. As I said it is full recyclable, high impact and cost effective, all of which are key ingredients in today’s market. CP Mag: Which materials are currently proving most popular amongst brand owners? SW: There are a number of possible answers to this question – from new lightweighting materials through to those offering superior environmental benefits, but the driving factor remains cost. Brand owners and manufacturers want the latest and best solutions, but want them at a good price. All of which means that the materials that are the most popular are those that can tick these boxes. Perhaps key amongst the recent products we’ve worked with is the material used for Nude Skincare’s ethical range of cosmetics, which was manufactured from fullbiodegradable starch and, if that wasn’t already enough, was printed on using low-toxicity inks. CP Mag: On an international level, there is plenty of cost-effective competition in the contract packaging sector from Eastern Europe and the Far East. Why should brand owners use a local (say) British company? SW: In order to succeed in any business you need to be aware of the competition and know how to react to it. The fact Mailway continues to be successful demonstrates our ability to do exactly this. And so it’s fair to say that we keep an eye firmly on the emerging foreign markets.
From a competition point of view, the Far East isn’t seen as a direct competitor. Costs are rising in that area of the world, the logistics and associated costs of taking UK / European manufactured products and shipping them to the other side of the world simply to be packed and sent back is unworkable, and effectively managing a project so far away is a major challenge. In contrast, Eastern Europe provides a more tangible level of competition, especially as a number of manufacturers have moved / are moving operations to the area. Our response to this is that we pride ourselves on the quality and competitiveness of our service – no matter who or where the competition comes from – and are always open to new ideas. In fact, we’ve already been approached by a number of companies about the potential for a Mailway operation in Eastern Europe and whilst we have no firm plans at present, it’s not something that has been ruled out. And of course, we’ve already shown our willingness to move closer to the source of manufacture with the recent launch of Mailway Scotland. To find out more about Mailway and its services call 01274 720 019 or visit www.mailway.co.uk
This article was featured in Contract Packaging Magazine 2009