Packaging Unpacked: A CEO's Insight into the Contract Packaging Industry's Growth

Understanding Current Trends: A Conversation with PJ Wiebel

Mike Mead: All right, PJ, thanks for joining us.

PJ Wiebel: Yeah, you got it. Absolutely, thanks for having me.

Mike Mead: Great. We wanted to connect with you and just talk a little bit about some of the growth trends that are happening in the industry.

Growth Trends in Contract Packaging

PJ Wiebel: If you do some Google searches and things like that, there are some pretty explosive numbers going on in the contract packaging business that we’re excited about. It’s exciting to see where the industry is going in the future and to be part of such a growth factor in a great industry, especially the contract packaging and then the food packaging part of it or the food manufacturing side as well.

Mike Mead: Absolutely. We’re seeing some staggering numbers, the trends that they’re projecting between now and 2030. Looking at the industry as a whole, it’s just going to continue to grow year over year. What do you think are some of the biggest call-outs for that purpose of brands looking to work with contract packaging companies?

PJ Wiebel: There are a couple of factors. Number one, companies are realizing that they can grow, and part of that growth is a marketing thing. They’re going to grow sales. How are we going to grow sales? You can really grow two ways. You can grow internally, or we’re going to add equipment, or we’re going to use existing assets to grow an existing space, existing people. But then a lot of companies are realizing that you’ve got external growth, and you can come to a company like ours, Econo-Pak, and we have equipment and space and people, and you can use our assets to help push your marketing and your sales as well.

Strategic Advantages of Contract Packaging

PJ Wiebel: And so, you know, you may be at capacity, but we have assets available and within a matter of a couple of weeks, we can be up and running your product, and you’re realizing those sales that your marketing department is out there getting rather than having to wait to bring that equipment in, hire the people, add the space and things like that. And then obviously, once you get up and running with us, you get that fixed-cost model. Fixed-cost model is huge. You know, if you produce a product, it cost you a dollar today, it cost you 75 cents tomorrow, may cost you $1.50 the day after that. With us, it’s 75 cents every day. That’s out to us to manage the efficiencies and the productivity, and a lot of companies understand that.

You’re also seeing, which are my favorite kind of companies, companies that don’t even manufacture anything. They’re sales and marketing firms that develop products. They have a great sales strategy, they have a great product, they have great branding, but they don’t manufacture anything. They’re out there, and they use a full network of external manufacturers, external packagers, and create these great brands, and they’re thriving now. It’s no longer that you have to make things to get a good price point. I think the contract packaging business is very competitive. We’re able to, through technology, drive great prices to be able to deliver companies like that, that don’t manufacture anything, great margins, and a lot of companies are taking advantage of it.

I think one thing, if you watch TV and you watch Shark Tank, the people on Shark Tank, or the sharks on Shark Tank, they constantly are pushing use a co-packer, use a co-packer, use a co-packer. You hear it in almost every episode, right? Because you’re able to focus on your branding, your sales, and your product, and it’s a great thing, and I think more and more companies are realizing it. And it’s interesting in the world, too. It’s amazing how many people don’t realize how many great products that they buy every day that aren’t necessarily made by the companies that are the brand. It’s unbelievable, and again, most of the big brands today are utilizing contract packaging for a lot of those reasons.

In the food industry too, you’re also seeing, and we’re seeing trends too, where companies are expanding in some areas and then they’re picking certain products, for instance, especially allergens, right? Where they may say, okay, we want this wheat product or a peanut product, we’d rather just keep this outside our facility, let’s use that for a co-packer. So different internal strategies as well.

Flexibility and Diverse Packaging Options

Mike Mead: Definitely, the flexibility in itself, right? Not investing in that equipment, having their own equipment working with a company like ours, gives them a lot of flexibility to do different things. They can go from a bulk one-pound package to creating single-serve packages. Sarah and I field many calls and many requests through the website of different ways for people to bring their products in. So when they come into working with a company like Econo-Pak, they can get that one-pound bag, they can get the single serve, and then also expanding into variety packs to be able to introduce different types of products in with their brand.

PJ Wiebel: No, you’re exactly right. And that’s a good point. So a lot of manufacturers, so say you do manufacture internally, right? And you’re making your products, and you’re packaging products, you may invest millions of dollars on your number one product line, right? And you’re, I’m going to make this up, but your number one product line, like you said, is a one-pound product, right? But everybody wants also a half-pound product, right? But your line and your efficiencies and the automation is all set up for a one-pound. So in order for you to go to that half pound, you don’t want to diverge that line, set it down, re-set it up, create inefficiencies, or that line’s at capacity. Going to a co-packer and saying, hey, we’re going to do the one pound, you guys take over, and you guys do this half pound for us. And now you’ve got a one-pound successful product and you’ve got a half-pound successful product, right? And that’s what the co-packing is all about, right? Giving these brands a lot of different diversity and ability to really come up with anything they want and get out and sell it quickly and efficiently.

Role of Contract Packaging in Brand Success

Mike Mead: Yeah, and our trial and R&D programs also help these larger brands discover different ways to work with their products. So they have a lot of big marketing teams that have a lot of ideas, and coming to with a contract packer like Econo-Pak, they can then test out those ideas and see kind of proof of concept. What kinds of films are we going to use? What type of equipment is this going to run on? What size packs are these going to be? And it gives them a lot of versatility so they can focus all of their energy on that sales and marketing avenue and not have to worry so much about the production side.

PJ Wiebel: You’re absolutely right. Because again, a lot of the large-scale, large companies, large-scale manufacturing, it’s all automated, right? So if you’re going to go in and produce 5,000 pieces on a fully automated line that has a lot of difference than what you’re producing daily on that automated piece of equipment. So then you’re having to retool the whole line. That makes no sense, right? You can come to us, we’ve got so many different types of equipment that we can use, both fully automated and really kind of stand-alone equipment that you can utilize to produce your trials and things like that. It makes total sense than retooling your fully automated line. So you come to us, we get it done in a day. We can make any amount of samples you want. You’re getting the samples out to marketing, you’re getting your samples out to your customers, and it’s just great.

Quality and Certification in Contract Packaging

Mike Mead: Yeah, and you mentioned Shark Tank, and that’s very interesting, right? So a lot of these people out there, they have great ideas, and they have innovative solutions to problems that people have or different types of brand-new food product or something like that. So they go on Shark Tank, they present those ideas because they’re looking to scale. They need help to get to the next level. So when you get to that level, you start to realize, oh wow, I need to have specific certifications and audits and testing requirements. And I want to sell to Costco, but oh, I need to be certified to sell to Costco. I have to have a Costco audit and all these things. There’s an education value there as well. And I noticed with our clients when they come in, you can have a small startup, a medium-sized company, or a large company or brand. There’s a lot of value added by working with a company like Econo-Pak because you are getting those certifications, you’re getting those audits, you’re getting the highly efficient equipment, servo equipment, all those things.

PJ Wiebel: So, no, absolutely. I mean, you basically can focus on your sales and marketing and come to us, and we’ll take care of the rest from the quality, the production, all different types of packaging, shipping, distribution, all that kind of stuff. You come to us, we’ll take care of everything for you. And again, I say it all the time, we have a full list of certifications, almost every certification you can have. And if there’s a certification we don’t have, we’ll go get it for you, right?

You know, again, it’s just a way for our clients to get out there and sell their products and be successful.

Mike Mead: Yeah, peace of mind knowing that your products are developed and packaged in a fully audited and certified facility just gives you that peace of mind and you can focus on the things that you need to within your brand.

PJ Wiebel: Yeah, and a lot of times today too, these big retailers like Costco, ShopRite, and others, before they sell your product, they want to see all these certifications to make sure that the quality of the product that they’re getting to sell to their customers is good. So a lot of times, they want to make sure before they even bring your product in that the companies they’re dealing with, the co-packers, have good certifications to ensure food safety, and that’s a big part of it.

Mike Mead: Definitely. Well, thank you so much for joining us today. It’s great to talk to you about the insights and things that are happening. Very excited about the future, especially at Econo-Pak. We have a lot of great things on the horizon, and we would love to have you join us again in a few weeks to talk about some new things happening for 2024.

PJ Wiebel: You got it. Alright, sounds great.

Mike Mead: Appreciate it, thank you.

Embracing the Future with Econo-Pak

Our discussion with PJ provided valuable insights into the current and future trends in the contract packaging industry. The flexibility, scalability, and cost-effectiveness of this model make it an attractive option for businesses looking to grow and adapt in a dynamic market. As we look towards the future, it’s clear that contract packaging, particularly through partners like Econo-Pak, will continue to play a crucial role in the success of many brands.

Interested in getting a quote for your project? Contact us today for a fixed-price quote.