STANDUP-POUCH PACKAGING

Providing Form, Function, Convenience and Success to reinvent your [Brand Product Package]

Prepared by:

Dennis Calamusa ALLIEDFLEX TECHNOLOGIES, INC. Sarasota, Florida USA

www.standup-pouch.com

In recent years, Standup-Pouch packaging has created an interesting marketing opportunity for many consumer product companies. Both new and traditional products have been introduced in a wide range of categories including single serve beverages, processed foods, cookies, snacks, breakfast cereals, confectioneries, pet treats & pet foods, in addition to a wide range of value added product applications. These product categories and other emerging markets will increase the magnitude of this package style in the market for many years to come. GLOBAL GROWTH 1998 thru 2006
8 7 Billion Pouches 6 5 4 3 2 1 0
Beve rage Food Pe t Food Non Food

1998 2006

North America Growth 2001 thru 2006

4 3.5 Billion Pouches 3 2.5 2 1.5 1 0.5 0
Beverage Food Pet Food Non Food

2001 2006

Key Standup-Pouch Markets

Beverage/Liquid
Fruit Flavored Drinks Water

Non-Food
Agri-Chem Health & Beauty Detergents

Food
Frozen Food Prepared Foods Sauces & Condiments Powdered Beverages Dried Fruit, Salty Snacks & Biscuit Confectionery Dry Mixes Retort Foods

Pet Food
Retort Pet Foods wet Pet Treats Dry Pet Foods

Isotonic Automotive

The trend toward Standup-Pouch packaging has been mainly driven by companies looking for ways to differentiate their products from the competition, add consumer convenience through improved methods of reclosability and in general provide an innovative marketing approach to stimulate the sales of a stagnant brand or increase the acceptance and success of a new product introduction. Well it worked! We continue to see a dramatic proliferation of Standup-Pouch introductions in the market, not just for niche or new product introductions, but we have started seeing the cross over of mainstream products and in some cases, the shift of complete product categories to the Standup-Pouch. This type of marketing momentum toward a packaging format has not been experienced in decades. Today, all packaging is getting more innovative and we can expect to see continued trending toward the re- thinking of consumer convenience with a renewed focus on the products point of use.

Based on new development efforts underway we will see the further reach of the Standup-Pouch packaging format into many more product categories including processed foods, condiments, detergents, health and beauty products and other household product applications. The Standup-Pouch has successfully demonstrated the unique ability to accommodate both dry and liquid applications. Now with the possibility to add not only zipper for reclosability, but spouts and dispensing features we can expect to see a new realm of exciting product introductions. As success grows and we begin transitioning a broader range of products into the Standup-Pouch package format there becomes a greater awareness as to the total cost of producing the package as it is brought to market. Many in the field believe that if the SUP is going to continue to be embraced we will need to reduce material cost and continue to enhance SUP packaging machinery technology to run more productively and efficiently, in order to reduce the total cost of the package. As mentioned earlier the Standup-Pouch has been primarily market and consumer driven, however the Standup Pouch as a packaging format offers many more benefits to the packager including opportunities of material cost reduction as compared to some other more traditional methods. Logistics can have a major impact on cost particularly when compared to rigid methods of packaging including bottles, can, jars, composite or spiral cans.

The transport, material handling, warehousing and shipping of these rigid package containers can dramatically add to the total cost picture. Many astute packagers are beginning to take these logistical costs previously regarded as fixed costs into consideration when selecting new or future packaging alternatives. This is good for the flexible packaging industry and all parties concerned. The mere magnitude of a shift from rigid to flexible can be overwhelming to some, particularly those who have utilized a particular method of packaging for decades, but this need not be the case as the magic formula to success thus far has been not necessarily to replace, but rather partner your existing packaging format. The new Standup-Pouch alternative can grow market share, adds value and provide the all important consumer with choice. This implementation process will enable packagers to perform a gradual transition to the future as opposed to a blind leap into the unknown. Now that the SUP is being commonly implemented for mainstream and higher volume product applications, output and productivity are becoming a more important focus in the packaging system selection process. Multiple slower machines, traditionally the only solution, take up valuable floor space, require more support infrastructure, labor and in total result in higher operating costs. Companies are more than ever, comparing Standup-Pouch capital investments and packaging material costs to continuous motion high speed bottling, canning and bag in box packaging lines and the present day economics of labeled bottles, cans and printed cartons. The packaging machinery technologies for handling these rigid formats and the economics of these packages have evolved over the last 50 + years along with the markets they serve. The flexible packaging industry has not been given the luxury to evolve its technologies over many years, but instead we are being driven by the needs and the urgency of the market, as it rapidly transitions to innovative flexible packaging alternatives.

The machinery industry is answering back with the continued movement toward the development of high-speed machinery solutions for both dry, liquid and retort applications.

Standup-Pouch machinery builders and packaging material converters are being pushed by their customers and the market to increase productivity and reduce packaging material costs. In the North American region a growing infrastructure of Contract Packagers have played an important role in growing the Standup-Pouch market and providing consumer product companies with the opportunity to introduce a SUP and other innovative flexible packaging solutions with minimal risk and improved speed to market. Contract packers can offer that special expertise that only comes from personal experience. This benefit allows you to quickly ramp up reducing your overall cost of implementation and immediately adds to your quality performance ratio. Production relates to Economics, Distribution to Product Protection and Marketing to Form, Function and Graphics. The contract packer can support all of these vital ingredients to a product.packaging success formula. These factors are particularly important during a new product / package introduction. We expect that the contract packaging sector will continue to support the dramatic growth of the Standup-Pouch as they provide their services and expertise to their customers that represent a growing diversity of industries. As these co-packers continue to gain important experience in the flexible packaging category we expect them to expand and diversify their capabilities, offering a growing opportunity for all those interested in transitioning to the future as painlessly as possible.

Other innovative pouch styles that are gaining popularity and interest in the market include:

As all styles of flexible pouch packaging continue to penetrate the market we can be sure that we will see a continuous effort on behalf of the flexible packaging industry to provide innovate solutions that will support the end users goals of streamlining their production capability, reduce cost and provide creative ways to support the market as we move to the next generation of flexible pouch packaging alternatives.