Get on the road to year-round sales

But while the good times will see full order books and capacity production, things change towards the end of the year. “The gift market falls off a cliff in November,” notes Steve Whitehouse, commercial director at Bradford-based contract packer Mailway. “By then, all products are in distribution centres or in store.”

It’s hardly feasible to mothball production lines and lay off the whole workforce for half the year, so how do packaging companies cope with the ebb and flow of demand?

Seeking out markets with complementary peaks can help. Confectionery clients can supply work for the Easter run-up, which can last from October to around February, and there are a number of other dates on the gifting calendar, though they are much shorter. Mothers’ Day offers a couple of weeks’ work, for example, while Valentine’s Day provides around another week. And watch out for peaks that may be event-driven – for example the current slump in housing sales may well have a knock-on effect on the sales of DIY goods. The BCMPA aims to help members smooth business peaks by tracking changes in the packaging market and referring project enquiries via email to member companies.

Better still is to smooth the patterns of work with a core business of steady, non-seasonal work. “We can fill our books with the peaks easily – but it’s always better to go after year-round work most aggressively,” says Whitehouse. Examples might be domestic household staples such as nappies, or shelf-ready supermarket goods with a consistent demand. Mailway also aims for the competitive edge with specialist products such as its SunPaq high-visibility blisterpack. “Every man and his dog” is fighting for year-round business, notes Whitehouse, who claims packagers need a unique selling point to stay ahead.

But peaks will always occur, and there are several strategies to manage them. The main issues are machine capacity and staff levels. Benson Group, with food-related folding carton production sites at Bardon, Newcastle and Gateshead, normally focuses on a six-day production week. “We have the flexibility to extend that to a seven-day week, which effectively gives us an additional 24 hours multiplied by 11 production lines,” says managing director Mark Kerridge. “We have to invest in products and services that will give us some protection against machine breakdowns. And our digital workflow links the production sites so we can transfer work between factories at the push of a button.”

Vacuum-formed packaging manufacturer Macpac has also built flexibility into its production process. “We can be flexible by adjusting the number of hours we run the machines, and also the way we lay out the products on the line,” says Macpac sales engineer Neil Greenhalgh. In addition, if the value of the job merits it, the company might rent, or even buy, extra machine capacity, particularly if it will offer added value to the client.

At some point, however, peak demand for packaging will require taking on more staff. The trick for companies is to balance their core staffing with agency or other temps, who may well lack specialist skills, or not be employed long enough to make it feasible to train them very highly.

Balancing act
The agricultural chemicals sector has a couple of peaks – February to April or May to produce the pesticides and fertiliser used by farmers in the March sowing season, then a short season again in autumn after harvest. The main challenge in this sector is to have trained, capable staff on the books, as they will be handling chemicals and so must meet fairly stringent health and safety rules.

“You can’t take Joe Bloggs off the street,” notes Safapac managing director Martin Steele. But as 60-70% of the chemical formulator and packer’s agribusiness turnover is made in three months, for much of the year the firm performs a staff juggling act. “In reality, you have the minimum permanent crew and take on temps in busy times,” he says. “But as we produce liquid product in bottles, temps mainly get used for putting bottles in boxes. The rest of the process requires trained people.”

As the production period is quite short, temporary staff do not get so involved in the work and are consequently less motivated. Location is also an important factor. In the past, the company had built up a pool of skilled people around its location south of Cambridge that it could call on at peak times, but it relocated to Peterborough a couple of years ago and hasn’t yet rebuilt its temporary staff capability. Instead, it is looking to diversify in order to smooth out the peaks and troughs.

Macpac, too, has built up a roster of potential temps and also uses some agency staff, benefiting from the relatively high population density in its Stockport location. “Where we take on agency staff, our core staff operate the machinery and the temps are used for more manual operations,” says Greenhalgh.

Remote control
But where a packaging client is more remote, it can be tougher to find a sufficient number of flexible temporary staff. That’s when specialist recruitment firms come into their own. Omega Resource recruits staff from all over Eastern Europe, primarily Poland, to fill peak demand in the UK.

“Local agencies often struggle when it comes to finding large numbers of staff in a tight local market,” claims managing director James Strickland. “It’s not an inexpensive solution,” he stresses, saying wages are the same as a UK worker would be paid. Instead, the benefit is flexibility – Omega specialises in supplying a high volume of labour at short notice wherever it is needed. A specialist agency can also cope with wider economic changes – as Polish workers return home, the agency can switch its focus to other sources of labour. “With the rise in unemployment we’ll expect to be recruiting more from the UK,” notes Strickland.

Some packaging companies have taken the search for reliable temporary staff a step further, however. On top of its core of around 100 permanent staff, Mailway uses between 50 and 250 temporary staff, depending on its workload. In order to ensure it always has the staff it needs, the company set up its own agency around four years ago. According to Whitehouse, Source Recruitment now offers a total of around 500 staff to other companies in the area and turns over £4m a year.

“Because we understand what we need out of temporary staff, we use those principles to help the business,” says Whitehouse.

Contract packers can offer help in all aspects of a job, notes BCMPA’s Steel. “Our members sit down with clients and discuss packing at the design stage.” They can also get involved in back-end fulfilment, offering warehousing and distribution, he says, which helps forge much stronger links with a client’s business.

So while Christmas may only come once a year, with a varied order book, flexibility and a reliable supply of temporary workers it is possible to avoid disastrous swings between feast and famine.

Case study: Framptons
Seasonality and other peaks also affect the non-gift market. Contract packer Framptons produces a variety of food-based products, from fruit juice and smoothies to soya, milk and egg products. “Juice and smoothies tend to reach their highest peaks during the summer months, in September in time for the back-to-school period, and post-Christmas for consumers looking for healthy products to detox after the festive binge,” says operations director Will Martin.

Unlike most gift packers, Framptons’ biggest peak is just after Christmas, when it packs 1,200 tonnes of smoothies, compared to 200 tonnes a week before Christmas. A key strategy to mitigate this is diversification. “Product categories can behave differently, so where juice may be in a peak season, there may be a lull in the demand for egg products,” says Martin. The company also aims to source new business that will fit around the seasonal demands of existing clients.

“We also make ambient products that do not have to be produced depending on seasonal demands and can be used to infill gaps in production during quieter periods,” he adds.

Products such as juices, smoothies and soya milk are often featured in promotions, so inevitably there are times when the company must reinforce its core team of skilled staff with temporary workers and different shift patterns. Packers must adapt quickly to sudden changes in volume, and Martin admits some customers are better than others when it comes to giving warning about imminent promotional activity.

“We are prepared to be flexible and we rely on temporary staff to help during busier periods,” he says. “This also enables us to pick up extra work if other manufacturers who share contracts with us are too busy or unable to pack required volumes of product for shared customers.”

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