Welcome. Today we are going to talk about something that is a struggle for almost every brand out there.  Just to let you know, I’ve been in your shoes.

You might be surprised to know that I am a cofounder in an innovative natural brand. I’m sure the story will resonate with everyone listening to this podcast.

After spending several weeks working on the logo, on the package design, and then getting it to look the way we wanted it to represent our brand. We sent it to a company that created four prototypes. I believe we spent something like $800 to get the four prototypes made. When we got the prototypes back, we were able to choose one.  Then we started looking for packaging suppliers. The cheapest prices were from overseas suppliers and the time lag time between when we can get packaging was several months away. To save money we had to buy in bulk but obviously as a new brand we did didn’t have a lot of money. The other challenge we were facing is that the ingredients in our brand were organic yet we had not earned the organic certification so we could not put that on the label as well as future certifications we had planned on using.

The next challenge is that we were going to buy the packaging but we wanted to change the package as soon as we got the certifications. We were trying to represent our brand in the best light. As I talk about repeatedly, you always want to put your best foot forward. The challenge before us is that we could either buy 10,000 units of packaging but then if we change the label we would have to retool the packaging and wait for six months to get the new packaging in. On top of that we were eager to make money so that we could help pay for the packaging because obviously this is very expensive.

So the constant dance back-and-forth between retooling the packaging for a certification change or the label change and then the need to redo it again for a different label change. Quantity discounts come in large rolls so we didn’t want to waste anything that we were buying. I’m sure many of you have been in this position before.

Today’s guests have an innovative strategy where you can actually design a package on your computer and send it off to someone to have it produced and get back in about 2-3 hours. On top of that, you can buy what you need when you need it as opposed to buying 10,000 units of packaging when you only need 1000, or maybe you can’t afford that many.

Today I am pleased to introduce you to two experts who have solved this problem. They are going to make your life a lot easier and provide you with the packaging you want, being able to modify it every time you change your slogan or put something different on the packaging.  Maybe even try A.B. split testing like you hear about with social media. Have I got your full attention? I hope so, you’re going to really like the show. Let’s get started!

Download the show notes below

Click here to learn more about Flexible Package Knowledge

BRAND SECRETS AND STRATEGIES

PODCAST #9

Hello and thank you for joining us today. This is the Brand Secrets and Strategies Podcast #9

Welcome to the Brand Secrets and Strategies podcast where the focus is on empowering brands and raising the bar.

I’m your host Dan Lohman. This weekly show is dedicated to getting your brand on the shelf and keeping it there.

Get ready to learn actionable insights and strategic solutions to grow your brand and save you valuable time and money.

LETS ROLL UP OUR SLEEVES AND GET STARTED!

Welcome. Today we are going to talk about something that is a struggle for almost every brand out there. Just to let you know, I’ve been in your shoes.

You might be surprised to know that I am a cofounder in an innovative natural brand. I’m sure the story will resonate with everyone listening to this podcast.

After spending several weeks working on the logo, on the package design, and then getting it to look the way we wanted it to represent our brand. We sent it to a company that created four prototypes. I believe we spent something like $800 to get the four prototypes made. When we got the prototypes back, we were able to choose one. Then we started looking for packaging suppliers. The cheapest prices were from overseas suppliers and the time lag time between when we can get packaging was several months away. To save money we had to buy in bulk but obviously as a new brand we did didn’t have a lot of money. The other challenge we were facing is that the ingredients in our brand were organic yet we had not earned the organic certification so we could not put that on the label as well as future certifications we had planned on using.

The next challenge is that we were going to buy the packaging but we wanted to change the package as soon as we got the certifications. We were trying to represent our brand in the best light. As I talk about repeatedly, you always want to put your best foot forward. The challenge before us is that we could either buy 10,000 units of packaging but then if we change the label we would have to retool the packaging and wait for six months to get the new packaging in. On top of that we were eager to make money so that we could help pay for the packaging because obviously this is very expensive.

So the constant dance back-and-forth between retooling the packaging for a certification change or the label change and then the need to redo it again for a different label change. Quantity discounts come in large rolls so we didn’t want to waste anything that we were buying. I’m sure many of you have been in this position before.

Today’s guest have an innovative strategy where you can actually design a package on your computer and send it off to someone to have it produced and get back in about 2-3 hours. On top of that, you can buy what you need when you need it as opposed to buying 10,000 units of packaging when you only need 1000, or maybe you can’t afford that many.

Today I am pleased to introduce you to two experts who have solved this problem. They are going to make your life a lot easier and provide you with the packaging you want, being able to modify it every time you change your slogan or put something different on the packaging. Maybe even try A.B. split testing like you hear about with social media. Have I got your full attention? I hope so, you’re going to really like the show. Let’s get started!

Dan: I'd like to welcome Kelly Williams and Tom Dunn from Flexpack Technology. Tom, can you start by telling us a little bit about yourself?

Tom: Sure. I've spent almost 40 years in the flexible packaging business, primarily on the manufacturing side and in product development, and I've been involved with consumer product goods companies with providing them with retail packaging for their branded goods across a lot of the major CPG companies in the United States with some experience over in Western Europe. More recently in my consulting business I've been involved with some Asian converters and selling into the Asian markets.

Dan: Thanks. Kelly, can you chime in and tell us a little bit about yourself?

Kelly: Sure, no problem. [inaudible 00:00:55] by training that started my career in the plastics industry. I was working with what are now some of the big, big converters, one of which Tom had worked for many years, so I got to see the dynamic changes that happened in the converting side, and then continued on into parts of the supply chain that involved the laminating of the films together that make packaging to the actual converters of the packaging. Then I spent quite a bit of time helping bring digital printing technology to market, which is going to be a key part of the future of things.

Dan: I appreciate it, thank you. Can you tell me how Flexpack Technologies started. What is your background, who Flexpack Technology is and what brought the two of you together?

Tom: We've been involved in the business as supply partners for many years now, and in doing so, we recognized in each other some intuitions and some sense of improvements for the industry that we've been frustrated in being unable to individually bring about for the industry. So we've tried to pool our resources together, along with another partner from a different part of the supply chain, to help create enough messaging in the industry to help change the way flexible packaging is delivered to brand of goods food processors.

Dan: I want to jump into the meat of why this is important. Can you briefly share a little bit more about why Flexpack Technology is important? Why does it matter to the brands and who is your audience?

Tom: The brand owners are our audience, and the importance is that there are unmet needs in packaged goods that we think the reorganization of the packaging supply chain can address. In order to see what the consumer in the way that takes the basic [inaudible 00:03:14] function of the packaging in general and turns it into a much more dynamic, much more real time tool for the brand owners to use in communicating not only the [inaudible 00:03:29] their products, but also some of the affinity of their products to the lives of their consumers in almost real time.

Dan: Okay, thanks. I'm going to explore that more in a little bit because this is so important. Think about it, a small brand goes to a lot of trouble to produce a product and try to get it onto the shelf, but then the lag time between when they've got the product produced and when they can physically put it on the shelf, primarily because of the packaging is quite long. By the way, I appreciate some of the great information you guys sent me. Just for my audience, what they sent me was a video of how this works, which is amazing. Imagine if you could, and I've used this analogy, you could order up some packaging, send it to your local Kinko or Fed Ex store, or some place like that, and have it ready to go in a few moments, and you could change the packaging if you needed to change the logo, personalize it, add a product claim or something like that almost instantaneously. Can you share with us what you see as the trends and challenges in consumer packaged goods industry from the perspective of the package supply chain?

Tom: I think the major thing for the decades that I've been involved with consumer goods packaging has been the proliferation of stock keeping units of flavors and textures and brand spinoffs and just basically much more complexity in what traditionally has been a very homogeneous American look, at least the U.S. market place. As that brand proliferation has continued, the basic supply chain has not evolved to do any more than produce a lot of packaging material of the same [inaudible 00:05:24] design in a high speed operation. With the sense of economies to scale that lower the unit cost of that packaged material all at the expense of some of the messaging that that brand may want to take with its product to the market place to the consumer. That moment of truth takes place between the consumer in the very tangible, very real, in-your-face experience of picking up a product, trying to understand, with the packaged messaging, what is inside that package, and making the decision to buy or not buy at that moment. That's always been a point of pride in the packaging business, to be that silent salesmen at the end of the consumer goods supply chain.

It's such a very stilted message, I guess is the best word I can use, in terms of being able to communicate a little more dynamically with the world of our consumer on the day that the buy decision is being made. There's all manner of information content in the packaging graphics, and you're seeing the information age, that there's a frustration that you see that flashback knowledge in the basic delivery of that packaging material that creates huge inventories of printed packaging with the invaluable message that's anything but dynamic that's going to be six months old just to get to the economic order quality of the flexible packaging supply chain as it exists now.

Kelly: And to add to that, Daniel, it's almost as though we've seen this progression of the number of SKUs in any retail store increasing dramatically over the last 10 years. Watching the supply chain, the flexible packaging producers today, that are only getting bigger as a means to try to defend against their own pressures, but it's actually making it even harder to deliver economic quantities in the timeframe and the size needed. It's almost like you're watching the industry increasingly managing this really, really bad headache that has suddenly turned into an almost incapacitating migraine, and I think a lot of that's being driven from the natural and organics product space that are just putting a lot of pressure on the need for SKUs and flavors and faster to where right now most of those brands are forced to seek packaging from Asia, not because it's cheaper or faster, but because they're willing to make 5,000 pouches by five SKUs that you just can't get here. I think it's really turned into a really difficult situation and it's because once a brand has art work defined, and they have provided that art work to a printer, you're looking at 40-75 days on average to get the packaging, and that's just not sustainable long-term.

Dan: So I guess another way to put this is that if you want what you want right away, in terms of packaging, get your product on the shelf, and be able to meet the needs of your consumer without having a lot of back stock or unused packaging, then this is the way to go for the future, correct?

Kelly: Correct. It's going to require a reconfiguration of the supply chain in terms of how packaging is produced. So generally when I hear people say 'disruptive technology', I don't personally believe technology is disruptive. Markets become disrupted, and whoever takes technology and puts it into a scenario that delivers a real value are the ones that are the disrupters. In this particular market it's realizing that you just can't continue to produce packaging where printing becomes the first step in the sequence. By the time you're finished, you can't make changes, so if somebody needs to change the non-GMO icon because they got the certification, or went through the testing to say non-GMO and use the official symbol, it's too late to add it. So if you walk through the store, you'll see pouch after pouch that has pressure-sensitive labels [inaudible 00:09:57] increasing the cost further just because they just didn't have the capacity or the time to change the graphics. There needs to be a change in the way packaging is made that will streamline it in a way that allows that packaged imaging, which is a new way to think about package printing whic happens closer to the point of filling and converting and the retail shelf. There's been a big disconnect.

Tom: Just back to the point of why the brand owners should care about this. There's a major disconnect between the consumer and the supplier of his or her food. The whole sense of local sourcing of food and the desire to know more about not only the food on your table, but also the people involved and engaged in putting that food on your table, is a compelling change in the market as [inaudible 00:11:05] That's disruptive. The ability of the brand company, be it a huge mega-brand or a startup entrepreneurial brand, there's a story to be told about the people and the science and the commitment and the effort and the awareness of consumer need that goes into that product that the package can communicate much more effectively than it does right now.

I've noticed in some of the natural and organic super markets, or maybe just local markets, there's a tendency to put a name and a face on the fresh produce section of my candy, my fresh yams, or my onions, or my apples or some other produce that's produced locally and creates a sense of bonding between the consumer and the producer of that. That's really not a possible scenario with the present packaging delivery system. But we can take that picture and name of the producer from that locally produced product, and put it on the package with the same kind of packaging material and the same kind of packaging economy that the standard generic, or one size fits all message for the packaging over months and months of time. That's the choice of the brand of goods companies right now.

Dan: Interesting. So it's a lot like when you hear a song on the radio and they put in the name of the station that's playing it, and as you travel around the country it's a different station for whatever market you're playing in, so that makes a lot of sense. That's good, that's really creative. I love that idea. Just to reiterate one of the points that you're making, I've been doing this for a long time obviously, and I remember how difficult it was to change a package. Kelly, you made the point about putting a label on, or a decal on a package. Can you imagine, audience, having to go back and then putting a label, a printed label that you did at another run, and physically opening every single box, sticking that label on to every package, and then sending it? Besides the fact it's not going to be straight all the time, it's not going to be as professional, but the point is the amount of labor, the amount of time that that's going to take, and it's going to mess up whatever graphics are underneath it. I think that's important. Just that alone I would think would be enough reason for people to get excited about this.

What do you think are the biggest challenges today for the packaging manufacturers to meet the supply needs of the market, and how do you see this changing?

Tom: I think that the lead times for packaging, be it for a new product introduction or just an ingredient change or some other kind of message to the public, has to change. The world of personal computers and smart electronic devices have created an impatience in our society that packaging has refused to measure up to. The technology exists to be very current with the message on the package in a way that speaks to the day in and day out life of the consumer making that purchase decision. Just as it appears to be that putting a newspaper in front of your front door every day was something of the logistics miracle, and now that's not even good enough for us as the availability of news is at our fingertips on our smart devices becomes the norm, the daily delivery of news is no longer acceptable. So the reinvention of the national newspaper that USA Today provided by distributing its printing and its editorial content digitally around the United States is the beginning of the kind of thought that we're taking in terms of getting a time sensitive and meaningful message to the consumer on the package of the consumer goods.

Kelly: To add to that, I look at it like the pit crew model. So when the NASCAR race car comes into the pit, you see that pit crew and everyone's standing in athletic position. They've got tires, tools ready to go. They're not sitting on their chairs flipping through Facebook, and then trying to figure out where the tires are. The way packaging is made today is more like sitting around waiting because the work does not start until the art work is in, signed off on, the order is in, and then that whole sequence of events happens from there, whereas so many of those steps can be preassembled, predetermined so that it's really just applying that variable image that you want to be on that package. Then if you do it in a distributive model where you've got 20 printers that are dominating 70% of the market, you've got hundreds of entities in all the key regions where food is actually being packaged that can deliver not only in realtime, and there's printers that are already doing this in the labels phase. These are companies that know how to take an order and ship it in 48 hours, where some of the bigger flexible packaging printers today can't even process an order in 48 hours, let alone produce it and ship it.

Dan: I wonder how many brands really understand what's involved in it? For those of us who've been around for a while, not to date myself, I remember when they had to do typefacing to produce a newspaper. I remember when they came with the word processor. Nowadays, as you guys were mentioning, I can print something at my home printer and it can be almost every bit as good as it would be if I had it professionally done by a print shop. Think about the ability to print your own packaging, effectively printing, have control over it, that much control, almost realtime. To back up a little bit and discuss how do you view this technology being accepted in the industry? What can we do to help people understand better the advantages? Just like we were talking about the time to get your product on the shelf, the speed to market, the ability to have the flexibility to change your packaging. How do we best communicate this to our audience?

Tom: I think of it in terms of the supply chain. The first step that Kelly alluded to was simply staging in the market place geographically distributed the basic packaging material in a way that is sort of an automotive modeled platform so that you can take the basic material for bar wrap or fill up packs of heavy dense products, come up with a package and material that encompasses the great majority of the product uses, put that in an undifferentiated state all around the market place, and then on demand that stock is pulled into the printing world where that printing message is added to that stock material. Then that goes to the packaging room of a contract manufacturer, or the food processor himself, wherever it needs to be in order to meet the kind of currency that the consumer population is used to, with the rest of its information age appliances.

Tom: I was just going to comment that the way the industry has evolved. The packaging material is so specialized for giving application, for giving product, for giving packaging machinery systems that it's not very robust, it's not very durable in the market place. Our thought is to put more durability and more package machine compatibility into our stock materials, and trade that durability off with the evolved marginal utility of the existing packaging material, and maybe keeping quality in the packaging material, putting more machine ability into the packaging material than that application needs. The [inaudible 00:20:29] off of that extra packaging functionality is the currency in the time you [inaudible 00:20:36] goes on that packaging material at the last minute.

Kelly: To add to that, again, and this is something that I think a lot of people are starting to see, but maybe aren't, so it's worth noting, is that the thousands of packaging structures that are out there today for all these specialized market and equipment combinations, and what Tom was saying is you can streamline that significantly by designing for the application and for the equipment, but it's also increasing the durability to package because we got to remember eCommerce is a totally different set of requirements for the package than going on a pallet, on a truck, to an RDC, and then to a designed spot on a retail shelf. Ecommerce provides a lot different packaging requirements than retail.

Dan: Could you explain that a little bit more and help us understand what that means and why that's important?

Tom: Let me take a crack at that. The way I look at it, eCommerce is an extension of the trend that a super market represents in the context of the local grocer, or the local butcher shop, or bakery or whatever it was. So all of a sudden what was a very personal consuming selling dialogue at that level of the butcher and the baker with the consumer was consumed into the super market model where it's packaged goods and a very impersonal experience for the consumer in terms of pure interaction. The interaction is between the consumer and the message on the package that's months old by the time the consumer picks it up. The eCommerce model becomes another step in that pursuit of efficiency, but in doing so I think it's going to take the consumer that much farther away from the butcher, the baker, the farmer who's actually making the product for the consumer in a way that packaging can reinforce the entertainment value of shopping with a message that's much more personal than the existing packaging supply delivery system allows at this point in time.

Dan: In the video and some of the information you guys sent me there was some information about how you could use this technology for the shrink packaging. How does that work, and why would brands want to look at that, and what would you see that packaging on?

Kelly: A shrink sleeve, like a bottle that's got the 360 degree shrink sleeve. My personal opinion of shrink sleeve has been a profoundly popular and growing year over year platform because it allows you to reinvent a molded container, a bottle of fruit juice or yogurt tub. It allows you to reinvent that product without reinventing what you had to spend quite a bit of money to develop the tooling, the polymers, and all the stuff to make product. You're able to change the face of it. You're able to change the clothing that's on it, so to speak.

Until the digital technology has gotten to the point it is today, you couldn't do that with standup pouches, for example. Now you can. Now you can change the face of the standup pouch, the bar wrap, the pillow bag of chips, or anything. You can change it across the board. Literally, really any format of flexible packaging can now be created. The images can be different every single time you print, and not only different, you can have an unseeable, yet standable package, meaning every single package, every single granola bar, that package is uniquely different than the next because that package will scan, and it will have information tied to it. It will have plans, opportunity to interact with the consumer, promotions. All of that technology is sitting there waiting to be tapped into that can only be done via digital printing, but if digital printing doesn't adopt a different work flow that streamlines its delivery to the supply chain, then it's going to continue to be what we see, which are cute little campaigns, NFL football logos on bags of chips. Digital printing is not about cute campaigns, it's about every day mass production in a distributive delivery model.

Dan: That's really interesting, and very powerful too. In one of my previous podcasts with Bill Bishop, Brand Secrets and Strategies/session six, we talked about the personal supply chain, but more importantly we talked about taking the messaging off the shelf. So what you just shared with us is exactly that. The ability for a brand to customize a package, to give you more information, more content about what's in the package, why it matters, who produced it. In fact, I know there's a couple companies that I've talked to that are looking to adopt technologies that will help you understand when the product was planted, who it was planted by, when it was picked, everything about the supply chain, when it showed up at the market. The whole idea is transparency. One of the core elements of the natural channel is transparency and clean label. I really like that. Do you have any other thoughts on that that you'd like to expound upon?

Tom: There's a major issue in the labeling world - what are generically described as country of origin labeling, so the stuff that you buy with this impersonal supply chain may have come from a farm 20 miles away, it may have come from the other side of the world thousands of miles away, and the argument is over just managing the ability to label the country of origin. This packaging model that we're talking about is at the level of the farmer of origin labeling.

Dan: Wow.

Tom: It's a scaled step change and then some in terms of the transparency of communication between producer and consumer that the healthy and good for you consumer expects in order to lead a healthier life for themselves in a world where health and minimizing medical costs is more and more on the top of mind of the consuming public.

Dan: That's fascinating. Just the opportunities that this opens up is just vast. I really appreciate you sharing this with us today. Is there anything else that we missed, or anything else that you'd like to cover or say that you'd like to add to this conversation?

Kelly: I think I'd like to add just one more piece. It's kind of the underlying critical element to taking on a new supply chain model that delivers the things that the brands that are listening to the podcast are going to want to understand, which is the operations technology piece, and I think we're starting to see that now. If you ask what everybody's biggest pain is, it's forecasting. No one knows what to produce because no one can give really good levels of forecasting. That's what leads to products consumers want not being on the shelf at their favorite store.

All of those challenges is going to be corrected by the internet I think, the big data. That infrastructure of operations technology where when somebody grabs something off the shelf it will directly link to realtime information about the need to resupply that product. That product isn't going to be resupplied if the packaging isn't right there with it, in sync, to be produced. What you're going to start to see is the migration towards cloud-based infrastructure to where the predefined structures that the packaging's going to be built around. Imagine it going to the printing press, yet you only know 80% of what's going to be printed. That does not happen today, but in the future it will because you're going to be feeding it from cloud-based data, and it's going to be so you can make changes dynamically in realtime, I guess is the point. The things about, well we don't know how many units from that particular farm in Peru, or that farm in South Georgia. We don't know how many until it's too late. We can't wait three months for packaging. Well, you're not going to have to wait three months. You can make those changes in realtime. That's what the future of the industry is going to look like.

Tom: I was going to comment, piggy back on Kelly's thought. Along with the information to the consumer, that kind of machine readable, customizable data that can be imparted to these packages produced with the new supply chain can create dialogue and synergies for the retailer and the food processor in terms of understanding what is also bought with that purchase, and when it was bought, and how that particular location, that particular super market chain is merchandising its product, and what consumers consider as part of their shopping basket to be complimentary items. It's not part of our existing business model, but it's not too farfetched to think that package could be a revenue generator in terms of co-branding or actual product advertising for products that are not inside the package. Just as we went through the stage where nobody was confident that the internet could make money for anybody, we may be at a stage now that the thought that packaging can't make money for anybody is going to be obsolete and turned on its head as we go forward with a new supply system.

Dan: I really like that, that's interesting. I remember having to spend a bunch of money to put a retailer's logo on the back of a NASCAR, something else that we were doing. What other applications could you see for that?

Kelly: Complimentary products. Let's say it's some type of grain, whether it's granola and maybe the perfect match, yogurt. Advertise on that pouch of saying this is a good compliment. Or it could be an upcoming event. We talk about positive events like a concert or the sweet sixteen NCAA basketball conference. You know what 16 teams are going to play the following Thursday on Sunday night, but no one's ever been able to have packaging in those 16 school areas by Wednesday, and now you can. It can even be natural disaster relateved events, an earthquake or a flood where you could have packaging distributed to that region because of this network. It really can take on any form that you can imagine of how you use that real estate, I guess you would call it real estate, how you would use that.

Dan: Cool. I just thought of this, so in other words, another way I might be able to use this is if I have five different retailers in my market, I could create a custom package. If I understand what you're saying, for each one of the retailers, possibly even a different size or a different count or a different shape, so that that way I help that retailer become special. Would that make sense? Would that work?

Tom: Definitely. You could take it one step further and create realtime press marketing so that you could put the price point or the number of units in the package as a variable in your product introduction, and take feedback very rapidly to create the fact-based decision making that leads you to choose an optimum configuration, an optimum price point for your package, and let the public do the choosing rather than a statistical sample of a consumer group [inaudible 00:34:12] their own experiences in a very limited context.

Kelly: That's a really important point, Daniel, because if you think about, especially a major CPG, they're going through hundreds of ideas and having to arrive at a handful because of the cost prohibitiveness of you just can't take a hundred ideas to market. It's just too time consuming, too costly for the printing plates and all of that. It's almost like the supply chain and the value chain are out of sync, and once they get realigned you're going to see a condensing of that supply chain to match the value chain to where now brands can literally try every idea they could ever imagine in any market that they want with ease.

Dan: Interesting. I was telling you before on our pre-call about some of the different things that I've seen in terms of packaging. I've been looking at A/B split testing, as they call it. Without mentioning the actual brand name, there was a company, a popular brand, that created a package that looked great, but it would fall down in the freezer, and then you couldn't see all the beautiful logos, all the nice packaging and stuff like that. To have an opportunity to go back to the drawing board pretty quickly without having to reinvent everything. One of the challenges that I find, I don't think a lot of the small brands realize, is that when you bring a group of people together to assess a product, you don't necessarily get good input. What I mean by that is that a lot of time those focus groups are there to answer specific questions, but they're not consumers of the product. They don't really understand how the product's designed to be used, et cetera. So sometimes that data is not really good.

I remember years ago, the company I worked for spent a lot of money to put a product on a shelf. It was too big, so we couldn't even market it. The company lost millions of dollars. This is many, many years ago when I was early in my career. So lesson learned.

With that said, what other examples can you share, or what other insights can you share in terms of the future of this technology? And one of the things we haven't talked about, is the reconfiguring of the package supply chain. You've talked about having different producers in different markets so that it can be quickly produced and given to the co-packers, et cetera. What else am I missing? Anything?

Tom: As I look around the domestic market compared to what I see in the rest of the world, the availability and the installed productive base of co-manufacturers and co-packers domestically creates a very logical co-enabler for this technology because they are used for special orders in their world. They're not making a big monolithic food processing plant that produces one brand and every product change represents a management headache. Their world is much closer to the scale of the segmented targeted regional marketing that consumers of goods are going to and the distribution of product manufacturing through those co-manufacturers and co-packers has not been accompanied by the distribution and segmentation of the package being printing part of the deliver chain so the ability that they [inaudible 00:38:04] on to that much more flexible manufacturing model is there for the much more flexible packaging delivery model to benefit from.

Kelly: That's a great point, Tom. I think some of the early work that I did, Daniel, to really start to piece this puzzle together started with a prior point in my career realizing that there's approximately 2,000 label printers in North America that I would say are at least a million dollars or more, and there's at least that many contract packagers. If you think the bar is lowering for CPGs to bring packaging in house, you're crazy. They are exponentially outsourcing everything 'cause they're so focused on maintaining their brand position and growing their brand that they're contracting out the food processing, the packaging, the logistics, even fulfillment to some level.

So the role of the co-packer is absolutely critical. If you look at a population density map of the United States, you'll see where people live, and that tells you exactly where the concentration of contract packagers lives. So you need the networked flexible packaging production infrastructure in those same regions. It's not about big massive plants that distribute packaging from coast to coast. That model is just not going to survive long-term. There's going to be hundreds of new [inaudible 00:39:39] and it's going to be label printers predominantly because roughly 25% of them have already gone digital, they understand what it takes to receive an order and ship it in 48 hours, but they're scared of flexible packaging because of the way it's made today.

What we're trying to show them through FBK resources is the way it's going to be made in the future is a lot like what they do today in label printing. So they know that opportunity is there because they're getting calls every week, if not every day, from co-packers asking them, "Is there any way you can make this pouch? Is there any way you could do this type of roll stock for bar wraps stick pack? Pre-made bags?" They're being asked to do it on a regular basis, but they don't know how to get their hands around that opportunity. That's where the future supply is going to come from.

Dan: Such an unmet need. I cannot begin to tell you how many brands that I talk to, that have those questions, and then of course on the other side of the conversation it's, "What do I do with all this extra packaging that I can't use anymore?" So to be able to eliminate that waste is a huge benefit. I really appreciate you guys coming on. How would someone get ahold of you? Can you leave your website, any other information about you? Anything else that you want to share?

Kelly: The easiest way to reach us would just be to go to www.FPKLLC.com, which stands for Flex Pack Knowledge, LLC.

Tom: There's one last mention of value. The new packaging delivery supply chain can provide and addresses the ongoing food labeling requirements of packaged goods, particularly with respect to allergens that are in the package. My daily access to the FDA database on my iPhone through their app of product recalls allows me to know what the problem is, and with the kind of personalization that can go into the packaging for these products, either on a machine readable or a human readable basis, would literally allow the consumer to take the package, and with his or her iPhone identify whether that package is part of the production lot that was mislabeled before it went to market and save millions of dollars in recalls and millions of consumer hours and consumer concerns about improperly labeled products sitting in their pantry in a way that makes consumer, producer, retailer, everybody much better off in the final analysis. The power of information in the growing information economy.

Kelly: And that's made possible because it all starts with the package if you think about it. The consumer touches a package that has a product in it, and you can trace it all the way back to the beginning. So it really starts and stops with the package that's containing, protecting, and informing or communicating to the consumer what is inside of it. If each pack is uniquely scannable, machine readable or human readable, but it's unique to every package, you no longer have to take out excess upstream and downstream of an event, such as glass was found in something. They have to take out so much of the supply chain just to make extra darn sure that nothing, that no shard of glass, is going to reach the mouth of a consumer. Now they can isolate in realtime, and know exactly what happened because all of that information is tied to that record. Then even further than that, now brands have the ability to interact directly with the consumers, and then consumers are worried about what they're consuming. All of their worries can be remedied just through that means of communication and information sharing.

Dan: That's amazing. And in this industry, so very important. And the ability to pivot on a dime if there's a problem with a product, think about all the product recalls we've seen in the last several years, and this addresses that head on.

Dan: Gentlemen, I really appreciate your time today. Thank you again for coming on this show. I look forward to sharing this with everyone. And again, for everyone out there, thank you for listening today. This is such an amazing technology, and it's really going to be a game changer in the industry. Again, thank you guys.

Tom: Thank you Daniel.

Kelly: Thank you Daniel.

Dan: Thanks.

I want to thank Tom and Kelly for coming on today. You can learn more about them and what they do at their website FPKLLC.com that’s FPK Resources which stands for Flexible Package Knowledge. I’ll include a link to their website as well as today’s freebie in todays show notes. Todays freebie is “Top 10 strategies to build sustainable sales and profits”. You can also get this instantly by texting “10strategies” to 44222 or by downloading todays show notes at brandsecretsandstrategies.com/session9.

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