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Pet Food Packaging Insights: Planning & Capital Costs

Co-Packing Roundtable: Part 1

  • Pet food packaging equipment manufacturers discuss project planning and capital cost factors for co-packers.

For co-packers, having flexible packaging equipment with quick, efficient changeovers is critical to running a successful business. It is the key to maximizing production of multiple SKUs for a variety of clients. Today's top pet food co-packers know this. However, some co-packers underestimate the project planning and capital cost factors that lead to the successful purchase and installation of that equipment. 

Co-packers who have the foresight to anticipate and address these factors up front will benefit by managing their costs more efficiently, not just during project planning, but throughout the life of their equipment. Those who fail to address these factors up front will likely experience unplanned downtime and incur additional costs as they try to achieve this after the fact. 

In response to this issue, we’ve organized a virtual roundtable with a few experts from today's top pet food packaging equipment manufacturers. In this post, you’ll hear from six industry experts who are familiar with commonly overlooked cost factors, pitfalls to avoid, and how pet food co-packers can maximize production efficiency.  
• Jan-Pieter Grootendorst, Sales & Marketing Expert for BW Flexible Systems
• Daniel LoRusso, Director of System Sales in North America for BW Integrated Systems
• Robert Redman, Managing Partner of Food and Beverage for Design Group
• Todd Sandell, Sales Executive for BW Flexible Systems
• Steve Shellenbaum, Product Manager for BW Flexible Systems
• Jeremy Stith, Partner for Design Group

Additional credentials for each of these experts are provided at the end of this post.


What are some cost factors that co-packers commonly overlook when planning a project?

Sandell: Something that is often overlooked are the costs associated with the whole process of going out and looking at machinery before you ever submit an RFQ. It takes time and money to evaluate machine capabilities and compare them against production needs. This sometimes gets overlooked because the co-packer will have someone internal on their staff do this, but there is a cost associated with those tasks, whether you are handling them in house or consulting with an engineering firm. Identifying the most effective way to manage the project planning costs will set the tone for how you manage all your subsequent costs.

Stith:
One of the first things that comes to mind is utilities. Traditionally, packaging equipment doesn’t have a significant utility demand. However, depending on the process equipment that goes along with it, you could be looking at significant utility usage., especially as co-packers start to specialize and create some of these custom packaging applications. They may not initially consider the complexity of what they’re adding.



What utility requirements should co-packers consider when exploring new pet food contracts?

Stith: We always say that you have to look at the power, air, steam, and any pet food requirements for other utilities that go along with the equipment. In the treats market, we’re seeing increased interest in nitrogen flush to increase shelf life instead of putting oxygen absorbers in the packaging. It’s important for co-packers to make sure that they’re considering all of the utility requirements of whatever new process they implement. And in their existing systems, determining ‘do we [the co-packer] have the capacity for that or not? Is this an additional system that we have to add into the mix?’ They should consider what is the most cost-effective way to do that or is there an equipment option from our manufacturer that has a better utility set up for our process? How is the heat generated? Is it a natural gas operation? Electrical? As the equipment gets more sophisticated, these are things that the [co-packer] has to consider.


What are some factors that influence the packaging equipment capabilities a pet food co-packer should look for to satisfy their contracts?

Grootendorst: For dry pet food, a lot of this will depend on the style of bag that they’re running for the customer and the type of seal they want on it. For example, in Europe you have greater demand for different features including a handle cut, stitching, cosmetic seals, gas flushing (to accommodate for ingredients with fewer additives and stabilizers), and different types and quantities of labels. Each of these characteristics must be considered when choosing the packaging machinery and they each impact the capital costs differently.

Shellenbaum: It also depends on how much automation they want. Typically, contract manufacturers and CPGs want as much automation as they can get, especially in the pet food markets. For example, our machines that include toolless changeovers are very popular because they’re easy and cost efficient. Once you program in the recipe, there isn’t much more to the changeover beside selecting the right recipe – the automated system does the rest of the changeover for you. 

LoRusso: Initially, the cost of a new packaging line is largely dependent on the customer’s required production rate, product sizes and packaging formats. As a co-packer, it’s important to evaluate your need to interchange between each of these factors because what you are really selling is production time, not just product out the door. Co-packers want to changeover as much as possible, as quickly as possible, with as many different SKUs as possible. Maximizing their amount of production time is critical.



What is a common pitfall that co-packers can avoid when designing a facility?

LoRusso: One of the pitfalls we commonly see in a wet food co-packing facility is not segregating wet and dry sides of the lines. There is a lot of liquid processing in a wet food plant, starting with the rinsing and filling of the cans. There’s also a lot of heat steam in the air, creating a very humid area. Proper line design and equipment ensures this wet and humid environment doesn’t wreak havoc on the labeling and packing sides of the line. So, when we talk about wet and dry, we need to distinguish between the parts of the process that utilize water and heat and those that don’t. The materials on the dry side of the line, whether it be labeling, or case packing or cartoning, tend to be paper, paper board, corrugate, or other materials that are susceptible to humid and wet environments. When we design lines, we take special care to create demarcations between these environments. We also take the time for specific equipment selection that helps dry and prepare cans for secondary packing. If there is too much overlap in these environments, you may be causing lower efficiencies in the dry side equipment.



What are some factors that co-packers can consider to help them maximize production efficiency?

LoRusso: To maximize production, co-packers can have an integrator look at the task the line needs to perform (ex: can sizes, pack formats, labels, etc.). Most of an integrators’ up-front sales process (and the first part of this investment savings) is the time they spend to understand the customer’s business. This will give the integrator an understanding of the machine standards required as well as the speed and capability of those machines. But it’s not just enough for the integrator to understand speed and capability, they need to dive deeper with the co-packer to understand their intended operational philosophy. Everything from staffing, to changeover, to automation, to manual operations, product types and more. 

Redman: When a co-packer expands production, there is typically a process component to consider in addition to the packaging line. We try to look at the holistic view of this new operation, including the upstream considerations. For example, you are going to add a new packaging line, but then you’ve got to add new process equipment to support the manufacture of the product. To put a new packaging line in and to put new process equipment, you’ll likely need more utilities and more space. When you start taking on more physical space inside the building, you impact the number of operators, which then impacts the number of employees in the facility, which impacts parking and so on. It just goes on and on as you keep pulling the thread. We like to look at all of those elements because they all have to work in harmony to provide an efficient operation for the co-packer. 

Did you find this content useful? Check out the second post in this series, which covers operational and production cost factors.

About the Experts

The BW Packaging Systems Pet Food Blog is built upon cooperation and sharing of information between experts across the pet food industry including equipment manufacturers, packaging line integrators, engineering consultants, private label brands, co-packers and more. This post includes insights from:


Design Group

Design Group is a premier system integrator for a wide range of filling and packaging line solutions with extensive experience in material handling, printing, labeling, inspection systems, secondary packaging requirements and management information systems. They provide complete production systems, line upgrades and experienced professionals ready to complement their client’s project team. In this post, you heard from:

Robert Redman is the Managing Partner of Food and Beverage for Barry-Wehmiller Design Group.  He brings 28 years of food and beverage experience to his company and its clients and is well-versed in packaging, process, controls and facility integration projects. Rob has provided oversight of multiple projects in the pet food industry including wet pet food, dry pet food, and treats production.

Jeremy Stith is a Partner at Barry-Wehmiller Design Group.  He brings 17  years of food and beverage experience to his company and its clients and is well-versed in packaging, process, controls and facility integration projects.  Jeremy is especially familiar with pet food packaging solutions, as he has completed multiple projects in the pet food industry including wet pet food, dry pet food, and treats production. 


BW Flexible Systems

BW Flexible Systems is a leading producer of weighing and bag filling systems,  SYMACH palletizers, conveying systems and wrapping machines for pet food  and animal feed. They also have a wide range of vertical baggers and horizontal flow wrappers to package treats, bones and other pet accessories, customized to meet each customer’s production, package style and economic requirements. In this post, you heard from:

Stephen Shellenbaum is a Product Manager at BW Flexible Systems. His keen knowledge of the pet food industry comes from decades of experience and dozens of relationships with pet food industry professionals.  
 
Jan-Pieter Grootendorst is the Global Strategic Marketing and Innovation Leader of Bag Filling and Palletizing at BW Flexible Systems. Since 2018, he has been the EMEA APAC sales leader for BW Flexible Systems, SYMACH bag filling and palletizing. He brings multiple years of pet food packaging and palletizing experience to the global team.

Todd Sandell is a Sales Executive at BW Flexible Systems. He has nearly 40 years of experience in the petfood industry and packaging/palletizing systems through product development, product management, marketing,  applications,  business unit management and consultative sales.


BW Integrated Systems

BW Integrated Systems is an industry leader in the design and manufacture of end-of-line packaging equipment and robotic automation solutions, as well as the execution of integrated packaging systems. They provide several solutions to the pet food industry including material handling and palletizing, depalletizing, bliss and tray forming/erecting, cartoning and case packing, and systems integration services. In this post, you heard from:

Daniel LoRusso is the Director of System Sales, North America at BW Integrated Systems. He has over 15 years of industry experience and has led project management in both the US and EMEA. Previously, he was Director of Operations for our Loveland CO manufacturing facility for 7 years. His Primary role is to bring cohesion to commercial teams, alignment between sales executive, and aids in the collection and understanding of client’s needs.