NPD partnerships are the future

Despite the anticipated negative impact of raw material price increases in the coming year, food manufacturers should avoid cutting corners for fear of generating more waste and thus potentially increasing costs – according to KM Packaging Services commercial director Graham Holding.

A survey by FoodManufacture.co.uk revealed that 88% of respondents have concerns about the impact of raw material price increases in the next year, and only 40% so far have managed to pass these increases on to customers.

Holding explains: “There’s an inherent danger in looking for the lowest cost supplier regardless of their attitude towards quality and performance. These companies are unlikely to have invested so heavily in product development, in-house technical expertise and testing as their competitors, so it could well be a false economy.

“As consumers become more demanding, supermarkets and other retailers are much more likely to select product ranges that have significant on-shelf appeal, so clear and classy packaging is absolutely vital. Similarly, retailers will quickly de-list suppliers whose products don’t keep on selling, indicating content issues. And, of course, poor quality packaging benefits no-one – a leaky ready meal or joint of meat results in more waste, loss to the manufacturer, reputation damage for the range and retailer – and frustration for the consumer.”

Holding believes that it will be necessary to re-evaluate some less obvious cost bases to mitigate against raw material price increases. For example, this could be achieved by working closely with packaging suppliers to develop more appropriate and cost effective solutions. Thankfully companies do seem willing to commit to new product design, with 62% of respondents claiming that they will be spending more on product development in the coming year than previously.