Contract Packaging & Manufacturing Mar/April 2024

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Have a question or an idea for an article? Contact Melissa Griffen, Editor. Contract Manufacturing + Packaging magazine prefers to receive press releases by e-mail. Send to mgriffen@pmmimediagroup.com.

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Decisions on Technology

BY MELISSA GRIFFEN, Editor

Esteemed readers, The COVID-19 pandemic certainly impacted labor issues and the trend towards automation and robotics in all fields, including the contract packaging and contract manufacturing space. But that trend existed before the virus and its impact on society began affecting manufacturing.

With more and more manufacturers tending towards technology solutions to improve efficiency, increase speed-tomarket, and decrease downtime, contract services need to make choices that may have a significant impact on their companies’ futures. Their decisions could mitigate labor issues, help the companies stay competitive in their fields, and improve

the contract service provider-customer relationship as well as build trust with customers.

In this issue, we’ll cover pros and cons on the matter and successes from both contract service providers who have built empires through automation, robotics, and other technology adoptions and those who rely solely on hand-packing operations.

The following articles cover this topic from various viewpoints:

• CPA President, Jerry Thompson’s insights on the matter on page 3

• The MSI Express profile on page 6

• A look into Canadian hand-packer Bullseye Packaging on page 9

• And Sunbasket case study with Chef Robotics on page 10

Keep your eyes peeled as well in the coming months for more information about the pros and cons of robotics and

automation applications within the contract manufacturing and contract packaging space and where to start.

Further topics to look out for include insights from CPA’s 2024 ENGAGE, The Contract Packaging and Manufacturing Experience, where these topics and more were also discussed by peers, experts, and brands/consumer packaged goods companies.

For any topics you would like covered in future issues, or insights you feel you could contribute to this space, please feel free to reach out to me at the email below.

Looking forward to this year,

mgriffen@pmmimediagroup.com

Navigating the World of Robots

BY JERRY THOMPSON, President of Combined Technologies, Inc.

My fellow contract packagers and manufacturers, Labor issues brought on by the COVID-19 pandemic have pushed for an increased implementation of automation, robots and artificial intelligence (AI). I think this will only continue. Personally, I get calls from different robot companies on a weekly basis.

These systems offer sophisticated warehousing, and camera inspection, as well as palletizing and case packing robots, which are typically easier for contract packagers and contract manufacturers to introduce into their lines.

Amazon strategically acquired Cloostermans, a warehouse machinery and robotics maker, rather than continue to outsource. The company recently announced new ways it is implementing robotics in its processes at its sites as well. In the Midwest, colleges are incorporating robots and AI courses into their packaging programs, such as Michigan State University’s classes entitled ‘Automation in Packaging’ and ‘Robotics and Packaging’.

Clearly, robotics and automation and are the direction of the future, but here are some considerations before deciding to invest in robotics:

• What will best suit the lines you are searching to improve? Is it a palletizing robot, an automated filler, an AI application to use at a critical quality control point? There may be many options to consider which can help increase efficiency.

• What kind of physical footprint can you afford for a robot? You need to have sufficient space to accommodate such a large machine.

• Robots can be used for many applications and are increasingly easy for anyone to program. However, each robot has a weight limit that may correlate with its size. The heavier the weight, the bigger the robot.

• When integrating a robot into a line, what labor is being removed and what are the cost savings? Will you need to hire on an engineer specifically to maintain the robot?

• Lastly, do you buy a robot or use a Robots-as-a-Service option? This could be viable, but again, you need to consider the labor costs associated with it. A robot is reliable, always at work, and doesn’t need breaks or health benefits, but will it replace the full job of a worker? For example, if an employee would both pack a carton and apply the label, can the robot do both tasks? What would the extra labeling ability cost, and would that still be cheaper than having that employee on the line?

As always, feel free to reach out to me and discuss your experience with robots. CM+P

What’s Your Game?

BY ROBBY MARTIN, Sr. Packaging Engineer, Bush Brothers & Co.

One of the key aspects of the relationship between brand owner and CM/CP partner is how they build their contractual relationship. Ways of working together can vary and depend on many factors. Below are some of the most common contractual constructs we’ve seen used in these arrangements.

Time and materials:

One of the most basic ways of working is to arrange everything based on time and material consumption. In these arrangements, brand owner customers may provide some materials, and sometimes even some labor, with the cost to the brand owner being any line time, materials, and/or labor provided to the effort by the CM/CP partner. Line time rate is often where labor, overhead and profit are captured. For pricing, this model is as transparent as it gets. Invoicing is based solely on the level of effort (time, materials, and people) provided by the CM/CP. Tying this pricing to a per case cost is the responsibility of the customer, not the Provider. Cost is usually set on a per day, per shift, or per hour basis. Materials are charged as consumed, or as opened for those that cannot be kept for any significant length of time once they are opened. This model is often useful for Development and Trial work, where defined formulas, processes and even specifications have not yet been developed or attained.

Full turnkey:

At the other end of the spectrum, we find the full turnkey, or “per case produced” option for contracting. In this mod-

el customers provide specifications and may also approve formulas and processes to be utilized. But the contracting portion comes down to the CM/CP and their customer agreeing on an invoice price per case (or another finished unit). The implication here is that the CM/CP procures materials, produces finished product, and sells cases to the customer. In most of these cases, the customer provides a forecast, and the producer is charged with having finished product available to meet the need. If forecasts are being reasonably met or adhered to in actual orders, the customer is usually billed upon shipment of finished goods. Key questions to address within the contract may include whether there will be opportunities to “square up” for cost changes in materials, or even transportation. Also important will be alignment to lead times for order changes and minimum order quantities.

Tolling only:

Another type of arrangement that is often employed by CM/CP providers and their customers is a tolling only type of arrangement. In these arrangements, the customer typically specifies finished product specs, and the provider confirms their ability to produce. This confirmation may be arrived at jointly with a customer during a developmental phase. However, once contracted production is begun, the customer schedules materials and production in a joint effort with the provider. The customer has full financial responsibility for procuring the materials, and the two parties work together to develop satisfactory timing, etc. for production. Conversion of materials into finished cases yields ready-to-ship inventory, with billing for the tolling costs usually coming immediately after completion of production runs. Key questions to include in contract details include how to react to changing volume demand, and fully un-

derstanding lead times required for order changes. Minimum run quantities are also a key factor in these arrangements.

Mixed model:

Falling somewhere in between the models discussed so far is a mixed model where both parties may take ownership of certain matters based on the best way to leverage each party’s strengths. The customer may manage materials where they have expertise, experience, or leverage in procuring those materials. Likewise, the provider may manage materials that are either more common, or that they have expertise in or experience sourcing. In these arrangements, tolling is still tolling. It costs what it costs for labor, overhead and profit. However, overall pricing in this model may come down to who procures what materials, and who set production run schedules and how they are managed. Just like in other models, minimum run quantities can be important to recognize in a contract. Additional details may include how to manage shifts in material or transportation costs, and how to deal with holding any finished inventory since the cost basis of that inventory is in a shared accounting state until transfer of ownership has occurred.

If it seems to you that four types of contracting models fail to capture the many ways a sourcing contract can be built between a CM/CP provider and their customer, well, we’d say you are right. These capture some of the major types of contracting that can be used, but various contract structures can also exist that fall in between some of the types provided here. For some, however, perhaps this article sparks some creative ideas that may lead to more harmonious and beneficial contract structures moving forward. If that happens, then we have met our goal with this particular column! Best of luck!

CM+P

How Your European Counterparts Step Up in Terms of Innovation

Sirio Europe , a nutraceuticals contract development and manufacturing organization (CDMO), noticed a trend in many pharma and OTC customers seeking to enter the consumer health space with formulations targeting common health concerns. Its research indicated these customers were attracted to the space due to the shorter time-to-market and increasing consumer spend in the category.

Sirio acted to become an innovative partner for such customers and help them innovate and advance to market faster by creating two ready-to-launch concepts for CPHI Barcelona, held in October 2023. The new formulations are designed to meet the rising demand of consumers for products with more natural actives for both menopause and improved eye

health. Sirio offers end-to-end services for a fast product launch.

The menopause softgel, made using the CDMO’s proprietary ‘Plantegrity’ technology, is both vegan and gluten-free. The softgel responds to wider market demands for plant-based products and contains 500mg of evening primrose oil and 45mg of Gamma Linolenic Acid, known

to help improve regulation of immunity, cholesterol, and menstrual cycles.

Preventative eye health formulations are another high-growth product class due to the rise in screen time globally. Sirio’s vision care complex features a combination of Lutein, Zeaxanthin, and Astaxanthin. All three ingredients help to maintain eye health, and according to a recent study, the combination even improves ‘hand-eye coordination’. The latter finding suggests this product has excellent growth potential among the rapidly expanding prosumer market for gamers.

Sirio seeks to set itself apart and attract customers who develop products that have enhanced bioavailability, proven shelf life, and better organoleptic qualities to benefit consumer health. CM+P

MSI, a Model of Growth and Excellence

With an eye on sustainability, strategy, and customer care, the co-manufacturer expands and perfects its services.

BY MELISSA GRIFFEN, Editor

In 2008, Charles Weinberg and his partners founded what would one day become MSI Express (MSI). It started as one small contract packaging and contract manufacturing (CP/CM) facility, then grew to a national company boasting 15 locations in six states and is considered one of the top-five CMs in the country.

“I’ve always enjoyed consumer packaged goods. And once I got into contract manufacturing, I knew where my career was going to go and what my passion was,” says Weinberg, CEO of MSI Express.

Weinberg says the business was built up through organic growth and acquisitions. The original plan was to expand to the four corners of the country, but customer demand led to a more centralized empire in the Midwest.

A history of growth

MSI acquired and merged with Per Pak in 2012 (Ind.), Max Mochal in 2014 (Ind.), 6575 Daniel Burnham in 2016 (Ind.), Express Packaging in 2019 (Ill., Ind., La., Ohio), Power Packaging in 2020 (Ill., Texas, Wis.), Ameriplex in 2020 (Ind.), PacMoore Hammond in 2021 (Ind.), 6750 Daniel Burnham in 2022 (Ind.), ans JW Smucker Ripon in 2023 (Wis.).

All acquisitions and mergers expanded MSI’s customer base, but they also came with their respective benefits, such as PacMoore Hammond, with large scale blending both for finished goods as well as private label business and B2B blending; and JW Smucker Ripon, with expanded liquid filling capabilities.

All were strategic opportunities the CM could not pass up. A partnership with HCI, a middle-market private equity firm, opened the door to MSI’s largest growth opportunities with Express Packaging and Power Packaging.

Weinberg also notes that MSI’s primary business in shelf-stable food products increased drastically during the COVID-19 pandemic from a volume standpoint which led to expanded production capacities. That business allowed MSI to solidify

MSI Express:

Location: Batavia, Ill. (15 plants in six states)

Number of employees: approximately 3,200

Main industries served: food and beverage—consumer packaged goods, emerging brands, private label

Certifications: FDA, USDA, SQF, NSF, Non-GMO Verified, Certified GlutenFree, Kosher, and Organic

Other services offered:

• Contract manufacturing

• Contract packaging

• Secondary packaging

• Dedicated facilities: design, develop, and operate

• Product commercialization services

• Project management

• Solution design and engineering services

Types of packaging and packaging equipment:

• Stick pack • Canisters • Cups

• OverCaps • Bottles • Bag in box

• Pouches: horizontal, vertical, preformed, pillow, and sachets

• Bowls

• Squeeze and PET bottling

• Aseptic - combi bloc, cups, and bag in box

• Cartoning, flow, and bundle wrapping

relationships with its customer base and continue to drive organic growth, which has not dissipated today.

Connection through digitalization

With each growth opportunity, MSI had to find ways to connect its facilities to synergize its business, ease operations, and make the facilities more efficient. MSI turned to digitalization through various platforms that run in each MSI location.

Transitioning acquired facilities from paper to digital is sometimes a struggle. Weinberg emphasizes it takes a lot of work, both on the factory floor and behind the scenes, and requires transparency throughout the ranks. He says the digital tools brought in must fit the business and be for the benefit of the workers and require simple assimilation. The company often has individuals from other operations share their knowledge to teach

MSI Express’ Batavia, Ill. location and center of excellence for stick-pack production.

Charles Weinberg, CEO of MSI Express.

those being onboarded, using the main management resources MSI built through data collection.

“I can’t emphasize enough that it takes a village, it takes everybody in the company. It takes management to listen, it takes people to execute, it takes folks on the floor to work with the systems and raise their hands when it’s not working. It takes accurate data entry,” says Weinberg. “Give them the appropriate tools, help them to succeed, and they will do a great job for you.”

Digitalization tools include Neulogy, as a common MRP system, that is integrated with Dynamics 365 for accounting, pricing and invoicing, quality data management through SafetyChain, and maintenance management through ESET Protect Essential. Data from these systems are transferred via Redshift to an Amazon Web Services database, with reporting via Tableau. Common Reporting is used to convey daily reports to plant managers and allows MSI to create a Leader Standard Work system involving common systems and training documents while keeping terminology consistent throughout the network. EDI is also used to seamlessly transfer data electronically from these systems through fax or email to MSI customers. MSI uses EDI to share business forecasting, production reporting, material inventory, and invoic-

ing data. Concur is MSI’s automatic billing and invoicing system.

MSI takes its connected network to create what it calls “centers of excellence”. These locations target certain services and capabilities so the employees can become proficient on the equipment in terms of operations and maintenance and so that they can communicate best practices in technology across the network to other plants. The Batavia, Ill., location is considered a center of excellence for stick pack production.

Batavia, a center of excellence

Batavia uses the digitalization tools to interface with customers, drive continuous improvement, and manage the location’s spend. Weinberg says the Batavia team is integral in introducing new products through trials, expanding capabilities, and generating line extensions—such as additional SKUs. The data gathered from trials are then used to improve speed-tomarket.

MSI also strives to improve operations through automation, which became more of a necessity during the labor shortage issues surrounding the pandemic. Wage rates have additionally justified the increased use of automation and digitalization. MSI also invests in scanners and smart tablets for forklifts, tablets for

quality control technicians and operators, and computers located throughout the factory at the Batavia location to ease processes for the workers.

The Batavia location implements automation on many stick pack lines and the data collected serves to analyze downtime so the facility can focus on areas experiencing significant loss and waste. This also provides operators and supervisors with daily and weekly data sets on productivity and losses versus standards.

“The data tells our plant managers, our supervisors, production managers, and maintenance teams where to focus their efforts to drive continuous improvement that’s going to yield the biggest results for the company,” says Weinberg.

Growth in Batavia

Future digitalization goals for the location include improved data collection methods for predictive maintenance capabilities and gathering data from material requirements planning to improve management of material ordering—from a price improvement standpoint as well as safety stock and understanding lead time to ensure the location doesn’t run out of materials. MSI is seeking to balance forecasts and inventory by better understanding the data, the accuracy of forecasts, and by improving its MRP system.

The Batavia location owes a lot of its capabilities to mergers and acquisitions with large scale blending, stick packs, horizontal form, fill, and seal, canister filling, and fulfilling in a variety of other formats.

“They’ve seen explosive growth at Batavia because of the availability of other projects that we never would have had if we hadn’t acquired PacMoore Products, as an example, or if we hadn’t done the merger with Power Packaging. Their location in the Chicago area along with their capabilities provides a great option for our customers to expand and grow,” says Weinberg.

Further growth goals for Batavia surround optimizing line configuration with upcoming equipment installations, equipment retrofits, and robot and au-

At Batavia and MSI’s other locations, hand assembly, automation, and robots work side by side.

tomation implementation to expand capabilities at lower price points for customers. MSI also has plans to continue expanding its stick pack production in Batavia.

Power of the big and spirit of the small

As MSI continues to grow and gain capabilities, improve procurement of materials, share resources amongst operations, and provide more opportunities to employees, Weinberg emphasizes how important it is that the company never lose the flexibility of a small company, maintaining a personal touch in customer care.

“We’re there if they need us, no matter when. We’re always hungry to make things better, because you don’t know where the next job’s coming from,” says Weinberg.

He says the spirit of the small embodies customer perspective that MSI owns and protects their brands every day, and drives cost savings, sustainability and operational improvements. MSI strives to provide its customers with alternatives—including sustainable options—and choices when approached with new product ideas. Transparency around mistakes and providing solutions to fix those mistakes goes a long way in building trust, which is the biggest foundation, according to Weinberg.

A leader in sustainability

MSI has taken it upon itself to become a leader in sustainability in the contract packing industry. The company is three years into its sustainability plan, which breaks down what they can control when packaging materials are ultimately up to customers, which are energy efficiency of machines, getting landfill waste to zero, and recycling programs

According to Weinberg, a majority of customers seek MSI’s help in achieving their own sustainability goals.

The Batavia location in particular focuses on waste reduction, utilizing data to determine where losses are occurring, which not only saves disposal costs but also drives improved reliability and efficiency, and in turn makes the company more profitable. Each of MSI’s locations are partnered with Quincy Recycle, but Batavia works with Quincy to set up a recycling system that segregates materials and sends them off to be recycled. Wienberg says the Batavia location has saved close to $100,000 alone.

The Batavia location also works closely with customers to improve packaging formats, and utilize recycled packaging materials. The plant is also a one-stop shop for stick pack production, where the product can be blended, the stick pouch created, filled, and shipped—in some instances direct-to-store delivery. This helps MSI’s customers reduce their carbon footprint by optimizing one location.

“There are ways to drive sustainability even if the packaging material itself isn’t the source of the sustainability,” says Weinberg. CM+P

Flexibility Leads Co-packer to a Decade of Success

As Bullseye Packaging celebrates its 10-year anniversary at its location in Calgary, Alberta, the co-packer claims flexibility and an eye on customer needs has led to its success.

BY MELISSA GRIFFEN, Editor

Bullseye Packaging Services , founded by Stephen Peters 15 years ago in Chilliwack, British Columbia, began with the intent to fill a gap in secondary co-packing services for the food and beverage industry in Western Canada, later opening a second location in Calgary, Alberta, in 2013.

Specializing in mixed packs, variety packs, and pallet displays, the contract packager (CP) operates in the liquor industry, handling beers, RTDs, and non-alcoholic beverages. The CP extends its services to retail and B2B segments, including clean non-food items like business technology solutions and active lifestyle consumer technology products.

Bullseye works on hundreds of orders per month and several million finished cases in various sizes each year with clients from its startup days as well as new clients.

Rather than turning to automated systems, Bullseye relies on a dedicated and well-trained workforce.

This CP has sought to better serve customer demand and consumer trends by seamlessly combining specialization with versatility and flexibility, to which it owes its success.

Flexibility in variety packs

Bullseye relies on a dedicated and welltrained workforce. Eira Braun-Labossiere, customer care leader, says this allows the CP to handle variety packs faster as there is no machine changeover time to hold the process. “There’s a strong focus on training line managers to ensure the transition process between projects goes smoothly,” she says.

Bullseye works with a range of pack sizes in a variety of carton types. Variety beverage packs can also include non-edible objects, such as a beanbag toss game incorporated into a beer carton, packs of socks and gloves, etc. The CP also works with many variety pack beverage products that require bundle wrapping.

E-commerce and services to emerging brands

Other flexible services at Bullseye are order fulfillment, storage, and ecommerce. The CP keeps an inventory of hundreds of SKUs of technology products for e-commerce and provides pick and pack fulfilment. Bullseye prepares packages for UPS pickup using the customer’s e-commerce software.

The CP’s Recurve Solutions division caters to smaller clients as a support system for lacking staff and warehouse space. This service is designed to help customers grow their brand with Bullseye as their support. Recurve holds all the

same licensing without a minimum order quantity requirement.

An emphasis on quality

Braun-Labossiere emphasizes the importance of being transparent with clients about issues that arise and to find a timely resolution. Timelines must also be communicated to avoid compromises to product and package quality. Such communication can build a true partnership with customers that takes on a holistic approach, looking at the “long game” rather than each contract as it comes.

“It’s in everyone’s best interest if we take a clear and honest look at what can be possible. Our team is not willing to compromise and rush through things,” says Braun-Labossiere.

Bullseye checks in with customers throughout projects to ensure they are happy with the progress and packaging aesthetic. This lets them participate and provides a space for the CP to point out flaws on the end of the supplier.

Braun-Labossiere counsels against shortcuts and price gouging to undercut competition. Rather, a CP should differentiate itself by charging a fair, sustainable price that allows it to fulfill orders and pay employees and which makes sense for client budgets. CM+P

Bullseye Packaging celebrates its 10-year anniversary at its location in Calgary, Alberta.

Robots Help Meal Kit Company Keep Pace With Ambitious Production Goals

E-commerce giant Intelligent Foods utilizes the CR3 system from Chef Robotics to increase accuracy, speed, and volume on the line while saving labor.

BY MICHAEL COSTA, Senior Editor, ProFood World

During the pandemic, direct-toconsumer meal kit sales skyrocketed as consumers sheltering in place took advantage of the door-to-door convenience and nutritional variety that meal kits offer, saving them a trip to the grocery store and time spent preparing meals from scratch. Those sales continued long after the pandemic ended, with worldwide

meal kit revenue expected to grow past $17 billion in 2023 and forecast to exceed $25 billion by 2027, according to Statista. By 2030, that number is predicted to reach $64.4 billion.

Based on those robust projections, it’s not surprising that Intelligent Foods, one of the country’s largest meal kit companies, has expanded operations to grow its customer base. Intelligent Foods has the brands Sunbasket, Gobble, and Prüvit under its umbrella, and also handles con-

Sunbasket is one of several direct-to-consumer meal kit brands under the Intelligent Foods umbrella, and the company also serves as a contract manufacturer for many private label meal kits too.

tract work for other meal kit companies in Intelligent Foods’ two processing facilities in California and New Jersey—96,000 and 140,000 sq ft, respectively.

“During Covid, the meal kit space became overpopulated,” says Ramiro Gomez, general manager of Intelligent Foods West, who started at Sunbasket in 2017. “We needed to find a way to be more competitive in acquiring more customers, so we decided to manufacture not just for our brands but for multiple brands, which

allows us to compete for a bigger market share. Now, other meal kit companies can use our manufacturing assets, which helps them save money by not having to buy those assets themselves.”

As Intelligent Foods expanded its production plants to accommodate new business, their need to assemble a wide variety of orders faster and more accurately was vital, especially while trying to navigate the ongoing labor crunch impacting the industry. To help solve this challenge, the company turned to automation, and Chef Robotics’ AI-enabled CR3 flexible robotics system, enabled by artificial intelligence (AI) for high-mix food manufacturers. Intelligent Foods puts the robots alongside employees on the line, all working as one to fulfill a steady stream of orders.

“Making meal kits and assembling ready-to-eat meals requires anywhere from four to 15 assembly lines running at once, depending on our workload,” says Gomez. “Chef Robotics was able to help us because there is a labor shortage. For example, between Sunbasket and Gobble, we’ll create about 36 different recipes in a week, and we don’t reuse the same ingredients, so that means quick changeovers are essential. Chef Robotics has a very simple system with a robotic arm that can accurately portion ingredients, and when one meal assembly is done, we just switch over a little piece of tooling on the end

of the robot arm, and we’re ready to go. Compare that to a person on the line having to change their entire PPE every time, and it’s a lot less cumbersome.”

AI learning curve

The CR3 robot’s AI improves its pickand-place accuracy the more it works with a specific ingredient or dish, so each successive run-through on the production line produces faster, more efficient results for Intelligent Foods. The company assembles about 150,000 meals a week between its two plants, and that’s not including private label business, Gomez says.

“We’re able to teach the robots all those different ingredients,” he explains. “Also, these robots are already pre-programmed to deal with a lot of different food types. The more our robots pick, the better they become. The Chef Robotics team can perform data analysis on a specific ingredient and make adjustments to the robot as well, so the pick accuracy improves over time.”

Gomez adds that Intelligent Foods operates in an allergen-free environment, and during changeovers, “the robots are wiped down and the tooling arms are disconnected and sent through our validated sanitation process,” Gomez adds. “After that, we wipe down the lines, clean the robots, and then we swab them for allergen residue to verify nothing is there.”

Intelligent Foods

Programmed for performance

Currently, Intelligent Foods has seven CR3 robots working with employees on meal kit assembly lines at its two production plants—three in California and four in New Jersey. Another reason Intelligent Foods chose Chef Robotics for its operation, according to Gomez, was the speed of installation and training for staff to use the robots—crucial when downtime is at a premium.

“Chef Robotics brought in a technician to train our people how to use the robots within a day,” he says. “Each robot has a touchscreen, so we pick an ingredient and it tells us what kind of attachment to put on the arm. Teaching the robot a new ingredient can be a bit more technical, where we add the new ingredient [to the database], pick the attachment, and tell the robot this is the attachment to use. It’ll grab the ingredient, and then we adjust placement of that ingredient along with the speed we want. After that, the AI starts gathering data and learns.”

Intelligent Foods’ three main brands each have a different food focus: Sunbasket is built around healthy, organic, California-style cuisine with chef-crafted recipes; Gobble is focused on fast preparation family-style meals; and Prüvit is a keto-centric meal service. With the ever-growing variety of foods and meal specifications Intelligent Foods produces for e-commerce and contract customers, Gomez says Chef Robotics solves current challenges while offering the simplicity to pivot quickly when the market changes.

“If we didn’t have Chef Robotics on our lines, we would be paying more for labor, and our changeover times would be longer. Chef Robotics offers a solution for today’s production problems,” he says. “When we looked at some other robotics companies, they were really focused on collecting data to build a giant AI infrastructure, and it was not a practical fit for what we needed on our lines. Chef Robotics gave us a simple pick-andplace system that we could use right away, and it doesn’t matter what size or variability the ingredient is, it can handle it.” CM+P

Intelligent Foods has a total of seven Chef Robotics CR3 pick-and-place robots stationed alongside workers in its two production facilities in California and New Jersey.

What CPA Has Been Doing for You

Another Successful CPA ENGAGE Event

CPA wrapped another successful ENGAGE, The Contract Packaging and Manufacturing Experience event in Orlando, Fla. from February 20-22, 2024. The event kicked off with a fun casino night social event and the educational portion of ENGAGE began with keynote speaker Doug Powell, VP global commercialization, Reynolds Consumer Products, speaking on “The Future of Supply Chains and its Impact on Contract Manufacturing” and a timely economics forecast report from ITR. The days were filled with interactive panel discussions, networking events and personal development sessions. The event ended with a tour of Tompkins Robotics, a packaging robotics company. CPA looks forward to seeing its members in Clearwater, FL next February 4-6 for ENGAGE 2025.

CPA State of the Industry

The latest CPA State of the Industry Report was released to the public at the end of 2023. The report examines the trends, challenges, and the opportunities in the contract packaging and

manufacturing industry and has been the leading data source for contract packagers and manufacturers since 2008. The report can be purchased at www.contractpackagingreport.com and CPA members can request their complimentary Executive Summary.

CPA Expands their Regional Events

With the tremendous success of the joint CPA and Chicagoland Food & Beverage Network event last year, the two have planned a return to the Frain Headquarters in Carol Stream, IL on June 14, 2024. The event is entitled “Charting a Path for Success: Navigating Tomorrow’s Technology and Its Impact on CPG Manufacturing,” and features speakers, sessions, and networking between brands and contract manufacturers and packagers, with a focus on the future of technology in manufacturing and where it is leading the industry.

Busy Spring Planned for CPA at Industry Trade Shows

CPA started 2024 at the Winter Fancy Food Show in Las Vegas, NV in January. The show was busier than ever, and many leads were collected. In March, CPA headed to Natural Products Expo West in Anaheim, CA and PACK EXPO East in Philadelphia, PA. The shows were busy with more members volunteering and showing off their capabilities in CPA’s towers. CM+P

Helping

Delivering

COMPLETE SNACK PACKAGING SOLUTIONS

• Accumulation

• Horizontal motion conveying

• Incline, belt and bucket conveyors

• Filling and multihead weighing

• Bagmaking and casepacking

• Checkweighing and seal checking

• Foreign object and defect inspection

• Controls and information systems

We are successful when you are successful. That’s why we apply creativity, engineering excellence, and determined perseverance to every project to help our customers get the performance their business demands—whether measured by flavor, efficiencies, sustainability, improvement, or innovation.

Annex 1 Implementation Tips for CDMOs

Experts from PDA’s Annex 1 task force provide insight on compliance with the new requirements and suggestions for delayed implementation dates.

BY MELISSA GRIFFEN, Editor

The finalized EU GMP Annex 1 “Manufacture of Sterile Medicinal Products” came into force 25 August 2023. To download the Annex 1 document, visit the European Commission’s official website. The Annex 1 document came to fruition as the Parental Drug Association (PDA) coordinated 11 professional associations in Europe, working together under the umbrella of the European Federation of Pharmaceutical Industries and Associations (EFPIA) to clarify regulations and requirements for the manufacturing of sterile medicinal products. PDA, along with the European Medicines Agency (EMA) and the Inspectors Working Group, took the lead on the discussion of the Annex 1 topic and its drafting.

Contract service organizations coming into compliance

Contract development and manufacturing organizations (CDMOs) have extra pressure placed on them to have an in-depth understanding of where responsibilities for compliance fall and to properly translate the new requirements into their processes to support their clients’ compliance.

If CDMOs are not compliant, their reputations can suffer, which will impact their business. And as Hal Baseman, PDA Task Force team member and chief operating officer at ValSource Inc., highlights, CDMOs occupy such a prominent part of the supply chain and are relied upon so heavily by the industry, that if these contractors are not compliant, the final implication would be drug shortages.

Part of the challenge to compliance, however, is that CDMOs must make both regulators and customers happy, and their customers may not always interpret regulations in the same ways. To this, Gabriele Gori, head of global pharmaceutical quality assurance for Zambon, and co-chair of the PDA Task Force, suggests that CDMOs create a sound plan discussed with their health authorities, and then have the confidence to defend their position and explain to their customers how they are in compliance.

“Do this rather than to try to satisfy each and every client’s interpretation, because you first have to comply to your health authority,” says Gori. “You are responsible for your facility, you are the one who has the GMP certificate, not your client.”

A level of transparency and open discussion on the CDMO side will also build confidence in the customer that the company knows how to control its processes. The customers can also help the CDMOs on a practical level through well-defined roles of responsibility and quality agreements to avoid any finger-pointing and develop more than a commercial relationship but a CDMO-client partnership. To read the full story, visit hcpgo.to/annex1 CM+P

mobile pail filler was created for batch filling operations at multiple locations. It is top and sub-surface pail filler that moves around on casters. This filler will handle 1 to 7 gallon containers and only requires 25 lbs. of inertia to move it.

How the Pandemic Changed CPG and CM/CP Packaging Relationships

BY BRIAN STEPOWANY, CPP, Senior Manager, Packaging Research & Development, B&G Foods

I observed in 2020 how COVID-19 might forever change the CM and CP/end user relationship. Where are we three years later? Let’s revisit the four areas I discussed and see how supply chain and its effects on how we look at business models moving forward have been affected.

1. My prediction: Secondary sourcing will become critical.

What has happened: Because of spacing requirements and the number of people not working, the number of workers has been depleted and manufacturing output decreased. This, in turn, affects supply chains and timelines for all aspects of your business. Because some suppliers are not able to meet delivery dates and production schedules, secondary sourcing becomes critical.

To meet delivery dates and production schedule, companies are now dual sourcing to ensure their production lines are operational and can achieve business continuity. Dual sourcing capability also lends itself to flex capacity to address temporary surges in demand or a seasonal product. Secondary sourcing has opened the doors to additional suppliers and improved service provider/end user relationships.

2. My prediction: Speed-to-market will prioritize larger production runs.

What has happened: Another practice that companies have enacted to increase their order fulfillment rates has been to move production of smaller volume or

new products externally to allow internal manufacturing to focus on larger production runs. Changeovers on production lines cause downtime and limit output on commercial manufacturing lines. This pushes end users to look towards additional CP/CMs to provide innovation and efficiency with speed-to-market capabilities unavailable internally. CP/ CMs that can offer multiple services are in demand. The use of digital packaging and personalization offers CP/CMs an opening to fulfillment as well.

3. My prediction: Attention to “unboxing” or the “opening experience” will drive opportunities.

What has happened: As e-commerce business continues to grow, the amount of attention and development that goes into providing customers with a positive package opening experience continues to be crucial. The amount of traffic that social media influencers can drive through positive reviews is amazing and is linked to the opening experience.

The need for an opening experience

provides a growing opportunity for CP/ CMs for low-cost, quick packaging changes. Options include repacking multiple varieties of products into bundles and personalized packaging that end users do not want to be burdened with internally. This has not changed. This area has only grown and become a key growth opportunity that service providers can offer.

4. My prediction: Service providers will thrive running new packaging innovations.

What has happened: This point relates to innovation, productivity, and robotics. As end users are concentrating on fulfilling orders on current products on their existing manufacturing lines, they may lack the line time or manpower to validate innovative new packaging and products or packaging and productivity initiatives. This still exists and has only grown as business has increased, and end users must use CP/CMs to expediate clients’ orders. End user companies are going to turn to CP/CMs to run new innovative packaging/products until they can justify bringing them in-house.

Finally, an issue I did not consider in 2020 was the amount of business and the changes that COVID-19 would generate for CP/CMs. The pandemic caused many companies to seek outside assistance to fulfill customers’ requests. End users had issues running their facilities and production lines. Today, employees are in high demand and the idea of robotics and Artificial Intelligence (AI) technology is inviting. However, the number of orders these companies are trying to fulfill pushes lead times out to approximately a year or longer. COVID-19 has changed our packaging industry, and the service provider industry is growing to meet these larger end user requests. CM+P

Prepare for EPR Regulations and Trends Affecting the Industry

Megatrends, consumer sentiment, and EPR regulations are soon coming into play, driving the industry’s future and impacting manufacturers.

BY MELISSA GRIFFEN, Editor

Contract Packaging Association (CPA) held its 2023 regional event in Cincinnati, hosted by CPA member, Haney’s Packaging Microfactory. The company focuses on small batch packaging for experimental trial to market in sustainable materials, contract packaging and fulfillment, and the Via Alliance program it founded to help sustainable packaging get tested and on the shelves.

At this regional event, insights into the packaging industry showed three key players reshaping its future, which are Extended Producer Responsibility (EPR) regulations, megatrends, and consumer sentiments on sustainable packaging, according to David Feber, global leader of the packaging service line and senior partner at McKinsey & Company.

Extended producer responsibility regulations

McKinsey & Co. collected nearly 600 proposed and implemented regulations throughout the world, with the United States contributing 90.

“These regulations are coming. This is going to be a big part of all of our lives in the packaging of consumer products and the value chain. And five years from now, I think we’re all going to be much deeper experts in these regulations than we are now whether we like it or not,” says Feber.

These regulations are also becoming more stringent and nuanced, which limits to the materials manufacturers can use in packaging. Feber suggests the U.S. look to Europe’s regulations as a guide for what to expect and aim for.

The top five proposed regulations for

2030 are: 1) Plastics must contain 10-35% post-consumer recycled content depending on product type 2) Restrict compostable plastics to those with clear benefit, 3) Introduce uniform recycling across member states–labeling must reflect changes, 4) Between 10-20% of sold containers must be reusable for specified end-use applications, and 5) Set up mandatory deposit returns systems in each member state for beverage containers.

In a McKinsey & Co. industry survey, 75% of organizations have sustainable packaging commitments, but a capability gap exists in actual preparedness to meet them. Companies are witnessing shifts in substrates, claims, and technologies as they race to align with consumer needs and regulatory demands.

Pros and cons for manufacturing

A panel at the event emphasized the struggles companies face with varying state EPR regulations in North America. Robert Cotton, R&D director of packaging sustainable materials at PepsiCo,

emphasized that EPR regulations should be at a national level. With infrastructure seriously lacking, Cotton pointed out a critical challenge lies in ensuring funds collected for EPR adherence are genuinely directed towards beneficial collection and sortation infrastructure.

Eric Klingenberg, materials science lead at Mars , also noted that education across the board is lacking. Mars is striving for “scientifically based positive fact to reduce the amount of confusion that’s out there,” says Klingenberg.

Concerns brought up by the panel include getting the consumer population on board; SKU proliferation increasing supply chain complexity and its impact on forecast accuracy; opportunities for innovation being limited or eliminated by regulations; certifications and legislations being unattainable for small companies, keeping them out of the game; and a lack of recycled content/sustainable materials to meet regulations. Read more on EPR, mega trends, and consumer perspective at pwgo.to/cparegional CM+P

Panel starting from the left: Ron Puvak of CPA, Eric Klingenberg, of Mars, Steve Sena of Truvant, Robert Cotton of PepsiCo, and David Feber of McKinsey & Company.

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