There’s no question about it, prices are on the up as the effect of the UK’s decision to leave the EU hits. You may have heard the very public case this month where Tesco refused to stock a number of Unilever products, including Marmite and Ben and Jerry’s showing their unhappiness about recent Brexit related price increases.

Supplier price rises mean businesses are faced with two options; to absorb the additional cost or pass it on to customers. Former Sainsbury’s boss Justin King recently commented that “retailer’s margins are already squeezed so there is no room to absorb input price pressures and costs will be passed on”

Packaging material prices are no exception. With protective packaging representing up to 10% of the total cost of a product, companies may be forced to increase the price to their customers.

Thinking smarter about your packaging solution can help offset price increases

There are a number of ways to mitigate the effect of packaging price increases on your business which extend far beyond the unit price of a product. Looking at ways to improve parts of (or your whole) packaging operation is the key to unlocking long term costs savings. As a result, limiting your need to pass on increases to your customers and allowing you to remain competitive in your market.

Here are our top 5 tips to get you started.

1. Review your packaging process

One small change to your packaging process can make all the difference to the cost of your operation. Take a detailed look at your packaging line from start to finish. This will help you identify areas where changes can be made. Even the smallest change can significantly reduce your costs. Take a look at this Seabrook Crips case study to see how they saved in excess of 40% on their packaging costs.

2. Consider alternative products that reduce those hidden costs

The costs you don’t see, such as efficiency, damage, loss and labour, are the ones you need to focus on. They have the greatest impact on your overall costs and tackling them will deliver some great benefits. Take a “self-erecting” box for example. The cost of the box is higher than a standard box but it’s easier and faster to assemble. The more boxes packed in an hour reduces the unit cost of each item. Take a look at the example below.

3. Reduce the amount of packaging required

There are a number of solutions that allow you to reduce the amount of packaging used without compromising on quality. This will have cost per unit benefits but can also reduce storage and transit costs. Solutions include enhanced packaging products such as fibre stretch film – a film with a greater yield – and on-demand packaging solutions such as air cushioning systems that inflate film as and when it’s needed.

4. Consider packaging automation

Introducing automated packaging machinery at any point in your packaging line can save money by improving efficiency and the quality of your packages, as well as reducing labour costs. Take a semi-automated stretch wrapper for example. This machine can deliver load containment and stability that is not only faster, but also far superior to what can be achieved manually. It also makes it possible to maximise the stretch potential of the film, increasing the yield of speciality films by as much as 300% per roll and thus reducing the amount of film used as well as overall consumable costs.

5. Ask your supplier about addition services

Ask your supplier what they can do to support you in your cost reduction efforts. If available, consider things like stock holding and just in time deliveries. Your supplier may also be open to volume related discounts.

The key is to challenge what you are doing currently, because there are lots of ways to make cost savings by improving efficiency. Remember that one small change can make all the difference.

Why not challenge Antalis Packaging to help you on the journey.

Antalis Packaging is offering a free assessment to see where you can make long term costs saving. Request your audit now to get started.