QUARTERLY PACKAGING REPORT

QUARTER 1, 2016

PACKAGING AND PROCESSOPTIMIZATION

BROUGHT TO YOU BY

FOODSERVICEUNBOXED

PACKAGING LEADERS OFTOMORROW

INDUSTRY NEWSAND EVENTS

EVOLUTION OFORGANICS RECYCLING

Packaging Technology Integrated Solutions provides strategic and operational expertise across the packaging value chain. We help you grow your business and position your brand with maximum impact for people, planet, and

profit. With global reach and resources, broad category expertise, and in-depth packaging supply chain analytics, our team of experts provides access to a suite of solutions

that use proven methodologies to help you make a difference, from idea to execution to end-of-life.

EUROPEHAVI Global Solutions Germany GmbHSchifferstraße 16647059 DuisburgGermanyPhone: +49 (0) 203 7090 2600Fax: +49 (0) 203 7090 2790E-mail: info-europe@HaviGS.com

HAVI Global Solutions UK LTD3 Furzeground WayStockley ParkUxbridgeMiddlesexUB11 1EZUnited KingdomPhone: +44 (0)20 8606 3118Fax: +44 (0)20 8561 9850E-mail: info-europe@HaviGS.com

LATIN AMERICAHAVI Global Solutions Latin AmericaAv. Garcia del Rio 2477, 9 BBuenos Aires C1429DEAArgentinaPhone: +54 (11) 4519-0690Fax: +54 (11) 4519-0690 ext. 111

OFFICES

NORTH AMERICAHAVI Global Solutions USA (Chicago)

3500 Lacey Road, Suite 600Downers Grove, IL 60515United States of AmericaPhone: +1 (630) 493-7400

Fax: +1 (630) 493-7599 E-mail: haviglobalsolutions@HaviGS.com

ASIA-PACIFIC MIDDLE EAST / AFRICA

HAVI Global Solutions Singapore3A International Business Park

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609935Singapore

Phone: +65 6895-2100Phone: +65 6895-2105

E-mail: info-asia@HaviGS.com

Printed on recycled paper

www.havigs.com

2 Q1 2016

4 Packaging Inside and Out

8 Vantage Point: Driving Efficiencies Through Optimized Processes

10 Industry Insider: Packaging Leaders of Tomorrow

12 Industry Insider: Foodservice Unboxed: Winning the Customer Experience through an Intentional Packaging Strategy

14 A Greener Path: The Evolution of Organics Recycling

16 Spotlight on Legislation

17 Trendspotting 18 Ask the Expert

20 In the News

21 Beyond Packaging

22 Case Study Focus

QUARTER 1, 2016

CONTENTS

Q1 2016 3

PACKAGING INSIDE AND OUT

Have you ever considered the connection between Social Media and Big Data? Consider the facts below, start to frame them not as just anecdotal conversation, but as an untapped resource of instant, incredibly rich data points.

Social Insight, Are You Listening?What is Social Media telling you about your packaging & supply chain?

These are genuine and unfiltered opinions from your customers about your brand, your packaging, your product, and customers’ likes or dislikes. How can you turn that data into action?

1.49 billion people are active on Facebook, and 1.3 billion are active mobile users.

305 million active people on Twitter, and over 500 million tweets a day.

2 million blogs are posted everyday.

1 billion people use YouTube, 4 billion videos viewed per day.

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Brands now need to collect and analyze massive volumes of data to understand what’s being said on social media by whom, when, why and on what digital channels. This digital knowledge helps clarify what the customer really wants (and doesn’t want). The numbers speak for themselves.

If you have not done so already, consider adding social listening tools to enhance your social media program. Your customers are talking about your products and services, the questions is, are you listening?

General packaging mentions on social/digital channels.

Only one percent of companies are leveraging Social feedback in considerations for supply planning.

Percent of consumers trust online reviews as much as personal recommendations.

3,162,257

1

88Source: HAVI Global Solutions Study, “Digital Intelligence; What The Consumer Really Thinks About Packaging”

The Impact of Social Media on the Supply Chain: Is There One?, Paula Natoli, Supply Chain Nation, 1/22/2013. Retrieved from http://blog.jda.

com/the-impact-of-social-media-on-the-supply-chain-is-there-one/

88% Of Consumers Trust Online Reviews As Much As Personal Recommendations, Myles Anderson, Search Engine Land,

7/7/2014. Retrieved from http://searchengineland.com/88-consumers-trust-online-reviews-much-personal-recommendations-195803

CAPTURE THE ZERO MOMENT OF TRUTH » This refers to the point in the buying cycle when the consumer researches a product, often before the seller even knows that they exist.

COMMUNICATION » This is the method your customer has selected to talk to you, not responding means you are ignoring your customer.

How can companies implement these insights?

DESIGN FEEDBACK » Listen to your customer via social media, they will immediately tell you if they like something or not, in real-time!

SUPPLY CHAIN DISRUPTION » If a location runs out of a product, dissatisfied customers will be talking about it before a location can order the next day!

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Utilize Marketing InsightsPACKAGING INSIDE AND OUT

We like to keep our lens open wide so we can capture stories and information that might seem unrelated, but are, in fact, relevant.

Laser Focused As food and beverage and pharmaceuticals packaging requirements become increasingly stringent, the latest advances in laser coding are helping manufacturers stay ahead. The global beverage packaging market alone is projected to reach an estimated $125.7 billion by 2018. The combined pressure to boost production efficiency and speed while adapting to evolving regulatory requirements often results in the selection of laser systems to increase output and meet demand.

Growth in Beverage and Canning, FMCG Manufacturers Stress the Need for Laser, Benke, S., Packaging Today, 3/20/2015.

Retrieved from http://www.packagingtoday.co.uk

4 Ways Lasers Lighten Inefficiency in Packaging, Lingle, R., Packaging Digest, 7/17/205. Retrieved from http://www.packagingdigest.com

Laser Company Offers Hermetically Sealed Package Technology for Microwavable Pouches, 3FlexPackMag.com., Flexible Packaging,

7/16/2015. Retrieved from http://www.flexpackmag.com

COST-CUTTING

Domino Printing Sciences, has developed technology that increases the effectiveness of a laser used for coding without increasing its power requirements. They claim an output more than double that of conventional lasers. The system provides manufacturers with the performance of a higher-powered laser with lower cost, smaller footprint, and lower energy requirements.

SEALED TIGHT

The new laser technology behind LaserSharp FlexPak Service’s PrimeVent packaging makes hermetically sealed packaging for microwaveable packages possible. Laser-scored patterns create a reliable steam-release mechanism that allows consumers to safely microwave food products taken directly from the freezer. A removable adhesive label is placed on top of the scoring to maintain packaging integrity and protect it.

25% REDUCTION IN SPOT SIZE =

100% INCREASE INAVAILABLE POWER

6 Q1 2016

Early Warning Systems Big Data continues to take center stage as a critical tool to achieving efficient and effective supply chain management, even helping reduce the impact of threats (ranging from food safety to terrorism) on a company’s supply chain. Techniques being used to identify risks and assess those threats include historical data analytics, risk mapping, and scenario planning.

E-Waste E-waste is projected to be one of the fastest growing waste streams, with the global e-waste management market expected to reach $49.4 billion USD by 2020, a compounded annual growth rate of 23.5 percent from 2014. What’s being done to handle this new waste stream?

E-Waste Management Market to Jump 23 Percent by 2020, EnvironmentalLeader.com, Environmental Leader, 1/28/2015. Retrieved from

http://environmentalleader.com

$550M E-waste Recycling Facility Set for Hong Kong Ecopark, Waste-Management-World.com, Waste Management World, 5/13/2015.

Retrieved from http://www.waste-management-world.com

Big Data and Risk are a Match Made in Heaven, O’Marah, K., Forbes, 7/30/2015. Retrieved from http://www.forbes.com

Big Data and Big Oil: GE’s Systems and Sensors Drive Efficiencies for BP, HBR.org., Harvard Business Review, 6/9/2015.

Retrieved from https://hbr.org

PROACTIVE MEASURE

German automaker BMW has developed a forward

looking risk management approach, systematically sorting through social media postings, emails received, and press reports to identify early warning signals (e.g., quality problems, labor issues, shipping delays) before they develop into problems of significance. BMW’s algorithm is based on a two-stage language-sorting engine created in partnership with a University of Manchester academic.

LARGE-SCALE INVESTMENTS

In response to the growing challenge, the Hong Kong government recently committed $1 billion HKD to recycling efforts and has recently formed an advisory committee to make recommendations to the government. As part of this initiative, $550 million HKD (equivalent to $71 million USD) has been earmarked for an e-waste electrical and electronic equipment treatment and recycling—or WEEETR—facility, designed to process 30,000 metric tons annually. The facility will convert regulated e-waste into raw materials, including metals and plastic, and is targeted to be fully operational by 2017.

BIG DATA & BIG OIL

Global energy firm BP is working in partnership with GE, using GE’s MRI scanners and other machinery in its production facilities to “pursue the power of 1 percent.” The impact of 1 percent is a GE-held belief that even a small, 1 percent improvement in efficiency and productivity can add billions of dollars to annual global gross domestic product. In this instance, BP uses GE’s sensors to ensure the efficient operation of critical rotating machinery found on the energy company’s production facilities. This includes the compressors, generators, and critical pumps needed to ensure the safe extraction and transportation of oil and gas around the world. The GE-enabled system allows BP to be proactive in obtaining significant risk management insights, helping diagnose problems in their earliest stages to avoid lost production and/or increased costs.

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Simply stated, process optimization is the act of adjusting processes to be more efficient and effective, often with the goal of minimizing cost and maximizing throughput. But as anyone who has undertaken this challenge within an organization knows, process optimization often is not simple.

By Amy Zettlemoyer-Lazar

Director of Quality Assurance, Sustainability and Process for HAVI Global Solutions in Europe

VANTAGE POINT

Driving Efficiencies Through Optimized Processes

8 Q1 2016

As the number of employees within an organization increases, technologies evolve and customer bases expand and contract, processes that were once streamlined and

evident can become inefficient, complicated and even obsolete. Layers are added, more stakeholders get involved and what previously could be achieved in five steps now requires 20 steps; adaptations have become routine. Process optimization helps uncover and eliminate redundant and ineffective processes and replace them with efficient procedures and practices; however, legacy systems and processes can be tough to alter and mindsets difficult to change.

It can be helpful to get outside of a singular perspective and to view a situation through a wider lens. Being efficient at a process does not mean the process is most efficient; similarly, finding a solution to a challenge does not presuppose it is the best solution. Experts in process optimization challenge the status quo, ask “what if” and work through different approaches to achieve desired outcomes. They are objective, creative and free from the biases of past experiences (“we’ve tried that before”) and the constraints of organizational protocol (“this is the way we’ve always done it”). Their position as outsiders, removed from functional and departmental silos, affords them a holistic perspective, and a view of the forest, not just the trees. Enlisting the help of a third party to identify and implement business process optimization within an organization can result in 20 to 50 percent increase in productivity, speed to market and improved communications.

What should companies look for when selecting a business process optimization expert? Beyond independence and objectivity, companies ought to consider breadth of experience. Consultants who have experience providing managed services across the value chain (packaging, analytics and promotions) of a global system with multiple languages, countries and cultures are likely to have the big-picture perspective, skillset and nuanced understanding necessary to effect change on a large scale and gain multiple stakeholder alignment. Next, consider their methodology. They ought to:

Map existing business processes. By using software to model a company’s processes,

consultants can help identify dependencies, see where time is being spent, and uncover opportunities for improvement.

Optimize processes using a minimal approach. Consultants, objective and unencumbered by an

organization’s history or politics, can ask the tough questions that will enable an organization to identify all of its opportunities and strip out all but the most essential steps.

Gain stakeholder alignment. Being able to identify and talk through assumptions and changes with all

stakeholders will help everyone get on board and facilitate change.

Implement via change management. Consultants should start with changes that can be implemented

quickly and that do not require significant investment or software before implementing anything that requires a budget change or software.

Support with systems and analytics. Process optimization experts should leverage analytics to

ensure changes are having an impact. If they are not, they should course correct accordingly.

In one instance, an organization looking to increase speed to market and productivity, achieve greater flexibility in service and improve communication sought help from our process optimization experts. The company requested that we focus on the whole process, not just our own activities, and challenge its entire system. We identified process optimization opportunities in finance, sourcing, product development, graphics and project management and helped the company achieve 40 to 50 percent increases in efficiency. Specific actions and customer benefits:

• Completed sourcing reviews faster so cost savings were realized earlier in the calendar year.

• Aligned testing in multiple facilities across many stakeholders in advance, thereby reducing testing time, sample creation and multiple test cycles for the packaging supplier.

• Expedited product development activity completion so supplier realized ROI faster and customer was able to launch the product while it was still trending with consumers.

Process optimization strips away the layers of inefficiencies that build over time within organizations as they adapt to changes, enabling them to streamline operations, reduce costs and gain stakeholder consensus.

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Packaging Leaders of Tomorrow

Packaging is an industry that is very fortunate to have many outstanding Universities and Colleges with programs dedicated to developing the next wave of packaging industry professionals. Schools like California Polytechnic State University, Clemson, Michigan State University, Rochester Institute of Technology, Wisconsin-Stout, are just a few with dedicated programs that are nurturing tomorrows packaging leaders.

However, it’s a challenging landscape for companies as they try to manage the four different generations that are now blended together in today’s workforce. The question of how does an organization attract, manage, and keep the talented members of Generation Y (Millennials) and the incoming Generation Z in the organization with so much competitive pressure is critical to answer.

For an industry like packaging, this is becoming even more critical to train and develop the future industry experts, as we see the accelerating retirement of the Generation X and Baby Boomers in greater and greater numbers. Overall, based on the U.S. Bureau of Labor Statistics as of the end of 2015, Millennials will overtake the majority representation in the workforce. The numbers speak for themselves, with 75.3 million Millennials in the workforce vs. 74.9 million Generation X and Baby Boomers the transition of talent is happening quickly.

With this in mind, what will be the skill-set required for future packaging leaders? The future packaging leaders will need the combination of both business and technology. They will need a comprehensive understanding of the entire value chain from the specifics of materials, to the processes of manufacturing systems, including testing and design. A more comprehensive understanding of the marketplace will be required. The next generation will need

to gather the intelligence about the consumers that are using their products. They will also need to understand and deliver against sustainability and an ever increasing regulatory environment. The following are key attributes to look for in our next generation of packaging leaders.

• Engineering and Operations management will continue to be required skill sets for packaging professionals. However, our future generation is going to need a broader base than just these skills. • Data analytics skills and market place analysis. The future packaging leader will need to be able to assist with making the connection between the end-user, the product, and the brand promise. Future leaders will need the skills to analyze the consumer insight, and effectively apply that insight. No longer will packaging be a separate, late stage step in the development life cycle, but a vital part of the holistic promise to the consumer. • An in-depth knowledge of sustainable products and substrates will be vital, not only what is being used, but why is it being used. They will confirm how the sustainable substrate enhances the brand and product promise to the consumer. They will be at the forefront of organizational education on why these new substrates and materials are being utilized.

By Michael Richmond

Vice President, HAVI Global Solution, PTIS

INDUSTRY INSIDER

10 Q1 2016

• Channel Management, or understanding where, when, and how a packaging is going to be leveraged and used by the end-user. Did the consumer buy it off a store shelf? Did they get it from a vending application? Did they buy the product on-line? Each of these applications could have a different packaging design and execution expectations, and our future leaders are going to have plan for these variables.

• Globalization and the unstoppable e-commerce channels will force organizations to realize that the packaging must speak to a global community. They are no longer tied to the bounds of brick and mortar stores to sell a product, and the online world opens up to consumers from all corners of the globe. Understanding global markets will become more critical when considering how a package speaks to a consumer.

• Mass personalization and 1 to 1 marketing. We have only begun to see the tip of the iceberg when it comes to product and packaging customization. The future packaging leader must not only be a designer and engineer, but also a marketer of the product. The connection between packaging design and implementation and the marketing suite will grow significantly closer in the coming years.

LOOKING FOR TALENT OF THE FUTURE?Consider doing recruiting days at the schools mentioned at the beginning of this article.

It is important to consider the workforce impact of a transitioning employee base.

• Tribal knowledge is being lost! The Millennials and Generation Z communicate, consume, and share information much differently than previous generations. It is vital organizations understand this and find ways to ensure valuable information is not lost. Finding new systems to capture and share organizational knowledge will be a critical factor for organizations to continue to grow, be successful, and make the new members of your organization more successful faster.

• New technologies will continue to affect our industry at a faster pace. Keep up and consider continuing education programs that will ensure staff remains on the cutting edge of the industry for things like: - 3D and 4D printing - Digital printing for mass 1 to 1 applications - Nano particle technology, where science fiction is touching reality - Virtual reality applications

The next generation of leaders for our industry will be required to have a new level of technical savvy, marketplace awareness, and the flexibility to work collaboratively across organizations and geographies. Additionally, the pace of change will cause knowing HOW to learn to become more important than WHAT is learned. Many experts predict the technologies taught during the average college freshmen’s first semester will be obsolete by their last. This new leadership competency, called “learning agility”, will require them to think in significantly different ways then we have over the past 20 years. This new group will envision and create things we could have only read in a science fiction novel. The future is now and it is a very exciting time to be a packaging leader.

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how and by whom the product was made – there is a lot a brand needs to convey on a given product to adhere to their customer presumptions. Can all of this be portrayed through a package? Probably not. However, are brands missing the mark on a huge opportunity to connect with their customer and deliver their brand message? Absolutely.

Considering product packaging as a blank canvas, an opportunity for brand identity, Brand DNA, it is a sunk cost and missed critical advantage when it is treated as a vessel or promotional afterthought (i.e. blank, stock packaging). Regardless of intent, this still sends a message to your customers… and it’s not ideal.

The question is not whether you want to consider packaging as part of the experience (because regardless, it is), but what emotions will it bring to the surface for your customers and potential customers? Some industries realize the distinct advantage they can take with an intentional packaging strategy, while some are lackluster at best.

As consumer food tastes become more sophisticated, so must the overall customer experience. To evolve with the landscape, brands are spending big money on market

research and customer insights to meet their demographic demand through existing and potential customers. Even though extensive resources have been dedicated to understanding the consumer, many are missing the mark on one critical element: product packaging.

Proven to play an essential role in the customer experience, packaging should be considered an inseparable element of the product as opposed to simply a vessel. With the selective and sophisticated, complex demands that consumers have developed in recent years – from an expectation for quality, value and personalization to assumed disclosure of where, when,

PART I: Recognizing the Opportunity, Exploring the Market and Evaluating Scope

INDUSTRY INSIDER

Foodservice Unboxed: Winning the Customer Experience through an Intentional Packaging Strategy

By Brian Wagner

Consulting Services Vice President, HAVI Global Solutions

12 Q1 2016

Take for example, Apple. Iconic products of course, but even the packaging of Apple products are chiseled and refined to definitive measures that have proven iconic, as well. In recent years, the packaging industry witnessed a phenomenon when the “un-boxing” of the Apple products became a Global phenomenon on YouTube. Although the iconic product was the purpose of the reveal, the un-boxing process of the reveal became the purpose of the shareable content and the impressive display of the moment. The customer experience is luxurious, modern, thoughtful, clean and innovative – exactly the brand message that Apple portrays throughout its marketing and advertising campaigns. Its Brand DNA is delivered in its product and experienced through its packaging.

While the consumer electronics industry sets the bar, the foodservice industry is perhaps the leader in those that are lagging behind. According to Nicola Twilley’s,

“Accounting for Taste” published in The New Yorker, it’s imperative for brands to realize that the full customer experience comes into play when a consumer interacts with a food product. Recognize for your brand, what exactly is that experience – what does that mean? Most importantly, what is that experience to your customer? Breaking it down, packaging and presentation plays a pivotal role when it comes to consumers identifying with products in the food world.

While we are seeing deliberate use of packaging with intentional strategies geared towards the customer experience in a few sub-industries within foodservice, they are inconsistent and far too rare. In particular, some QSR brands and online grocery retailers are hitting the mark with intentional packaging strategies – think Shake Shack or Chipotle, Edible Arrangements or more upscale grocery delivery sites – unfortunately though, most of the foodservice industry is falling behind.

The most pervasive reason for this is that most of the more established institutions have maintained a more outdated view on packaging and customer experience, having never allocated the appropriate or necessary resources here. Without the resources, they are often unable or unwilling to put forth the effort – especially in what seems to be uncharted and perhaps overwhelming territory. Without the resources and effort, the end result suffers.

We see this most apparently in catering and to-go packaging, in both restaurants as well as groceries. This is an opportunity to not just deliver a premium product experience within the point of purchase, be it in-store or at-home, but for your product and brand

to be showcased to an even greater consumer audience. Your intentional packaging strategy should lead your to-go or catered product not just to your customers’ car but to their company conference room. Consider the impact of thoughtful,quality, deliberate and cohesive brand packaging used to impress a room of potential customers, rather than your stock throw-away containers. The packaging should add value, embody your Brand DNA and leave that lasting impression that your product deserves.

To measure that success in your intentional product strategy, it’s imperative to account for the customer experience, operational needs, and then financial implications. Challenging the perception of what most brands view as an overwhelming or expensive undertaking, it’s important to recognize that the goals in your packaging strategy are always business-level and driven by your bottom line. Here are a few ways to do so:• Expand catering and to-go categories with a cohesive packaging family and presentation (example above).• Optimize equipment and equipment operations (e.g. workflow efficiency, ease of use, speed of service, etc.).• Employ practical sustainability approaches that evolve with the changing legislative landscape, allowing you to take credit with your customers without blowing the budget.• Find the optimal supply and cost structure to reduce complexity.• Enhance you brand’s competitive edge by objectively comparing with consumer alternatives.

These challenges are not diametrically opposed and can be addressed with a holistic approach. All of this begins with an assessment of brand objectives and customer insights, with the recognition that packaging and product are side-by-side, in the customer experience.

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Don’t Throw Away Your Brand with the Trash

The Evolution of Organics Recycling

While food waste management is a growing and critical industry concern, best practices and legislation for the disposal and management of organic material continue to evolve. Thanks to support from—and collaboration with the Environmental Protection Agency (EPA) and other environmental and government groups, organics recycling is becoming a primary focus in the larger discussions of environmental sustainability.

According to Annika Stensson, Director of Research Communication for the National Restaurant Association (NRA), consumers are a driving

force behind the sustainability movement in food manufacturing and foodservice industries. However, Americans generate twice as much food waste today as they did in 1970: 90 billion pounds of edible food goes uneaten each year. Food waste is the second largest category of municipal solid waste sent to landfills in the U.S. Of the almost 45 million tons of food waste generated annually, less than three percent is diverted to organics recycling.

Following a banner year that set high expectations for 2016, we have already seen positive strides in commercial and consumer disposal behaviors. There have been evident increases in consumer awareness and involvement, as well as regional and industry-specific initiatives embracing the future of organic waste management, and new legislation.

We also welcomed the appointment of Frank Franciosi to provide strong new leadership for the U.S. Composting Council (USCC) – an organization that provides support for generators of organic residues, compost producers, policy-makers, regulators, professionals and product users through research, training, public education, determining composting and compost standards, expanding compost markets and enlisting public support. Franciosi also leads the sister organization, Composting Council Research and Education Foundation (CCREF).

Leading the industry evolution, legislators, food manufacturers, restaurateurs, grocers and consumers are increasingly working to curb food waste and boost organics recycling.

Legislation and LeadershipIn step with the USCC, the USDA and EPA have declared a new goal: to reduce food waste by 50 percent by 2030. Franciosi cites this waste

A GREENER PATH

Americans generate twice as much food waste today as they did in 1970: 90 billion pounds of edible food goes uneaten each year.

Food waste is the second largest category of municipal solid waste sent to landfills in the U.S.

By Anthony Dilenno

President, Recycling & Waste Solutions, HAVI Global Solutions

14 Q1 2016

reduction goal as leverage in making the issue of food waste diversion top-of-mind for legislators, manufacturers, educators, producers and suppliers of the food industry.

From state to state, new sustainability legislation is being passed and best practices are being introduced. The Massachusetts Commercial Food Waste Disposal Ban took effect in October 2014, resulting in an increase in diversion of food scraps from landfills. Connecticut, Vermont and Rhode Island have enacted similar disposal restrictions that take effect later this year. California has new laws that promote organics recycling and encourage composting and anaerobic digestion; and across the country, we are seeing greater availability and increased presence of FOG (Fats Oils Grease) recycling and anaerobic digestion facilities. This year, New York City and Minneapolis have also rolled out organics recycling programs for commercial and consumer use.

With a zero-waste policy ingrained in the mindset of some of the most influential industry leaders, groups and individuals, we can expect to see more municipal, state and federal legislation designed to reduce organic waste sent to landfill.

Industry Drivers and InitiativesAs global populations increase, we will see corresponding increases in demand for food—and, consequently, food waste. This presents challenges: from food production and supply, to wasted natural resources and increased emissions, as a result of more food in landfills. The most troubling challenge, though, is countering global hunger.

In response to multiple sustainability initiatives linked to this challenge, more restaurants, grocers, food manufacturers, universities, institutions and farmers are donating excess food to foodbanks. Donating surplus,

blemished and soon-to-expire food to foodbanks enables organizations to divert waste from U.S. landfills and provide sustenance to the 48 million Americans who live in food-insecure households.

Each year, the National Restaurant Association surveys more than 1,000 professional chefs and members of the American Culinary Federation to compile a list of anticipated food trends. Since 2014, the NRA’s Top 20 Culinary Forecast has included “food waste reduction and management.” For 2016, “locally sourced” ranks number one, while “natural ingredients/minimally processed food” and “environmental sustainability” round out the top six.

In keeping with these sustainability goals, restaurants are also focusing on reducing organic waste through better food supply chain planning. Improved demand forecasting and meal planning can help commercial businesses limit the amount of food waste generated in their facilities. In one instance, a current HAVI Global Solutions customer, improved forecast accuracy and better inventory management for an annual promotion enabled a quick-service restaurant chain to reduce left-over inventory by as much as 97 percent and save $2 million over the prior year.

Limiting menu options and adjusting portion sizes, down-sizing inventories at retailers and reducing bulk offers to consumers are other ways the food industry is playing a role in reducing organic waste. A la carte menu items and half-order options at restaurants are gaining popularity, aligning with consumer snacking trends. We also expect to see more fresh-prepared single-serving meals in supermarkets and increased adoption of subscription meal services that supply consumers with the precisely pre-proportioned ingredients they need to prepare a meal, without bulk leftovers.

Momentum

As organizations and consumers become more aware of the benefits of organics recycling and ways to reduce the huge volume of waste sent to landfills, we will continue to see an increase in the development and sharing of best practices, through public industry platforms and communal resources. Encouraged by these trends, government groups, politicians and businesses will increase their focus on reducing food waste and diverting waste from landfills; and the resulting new legislation, technological innovation and industry best practices will generate more organics recycling programs.

Together, we are heading in a greener direction.

Of the almost 45 million tons of food waste generated annually, less than three percent is diverted to organics recycling.

Q1 2016 1515

From our EU office: FRANCE: Bill Approved to Outlaw Single-use Plastic Bags

The newly approved French decree outlaws single-use plastic bags, which was published by the French Ministry of Ecology, Sustainable Development and Energy on February 1st, 2016. The decree sets out clear requirements for the reduction of single-use plastic bags in favor of bio-based, biodegradable and home-compostable bags. The new decree will take effect on July 1st, 2016 and applies to single-use carrier bags below a thickness of 50 microns.FOR FURTHER INFORMATION REGARDING THE NOTIFICATION, SEE THE FOLLOWING LINK: HTTP://WWW.PACKAGINGTODAY.CO.UK/NEWS/ NEWSFRENCH-DECREE-SUPPORTS-BIOBASED-AND- HOME-COMPOSTABLE-BAGS-NO-SINGLE-USE-PLASTIC-BAGS-AS-OF-1-JULY-2016-4810961

UNITED KINGDOM: Europe introduces rules to fight falsified medicines

The European Parliament has approved and published regulations that build on the Falsified Medicines Directive in helping to verify and secure medicines along the supply chain.

A barcode acting as a unique identifier will be added to all medical products, along with human-readable information, by the manufacturer. This will be scanned at fixed points along the supply chain, and linked to a repository system to check the identity of the product. Packaging also now includes features that make it obvious if the product has been tampered with.FOR FURTHER INFORMATION REGARDING THE NOTIFICATION, SEE THE FOLLOWING LINK: HTTP://WWW.OUT-LAW.COM/EN/ARTICLES/2016/ FEBRUARY/EUROPE-INTRODUCES-RULES-TO-FIGHT- FALSIFIED-MEDICINES/

From our North America office: UNITED STATES: United States and 11 Nations Sign Trans-Pacific Partnership Trade Deal After more than six years of negotiations, last week the United States and 11 other Pacific Rim nations (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) formally signed the Trans-Pacific Partnership (“TPP”) agreement. The TPP aims to eliminate more than 18,000 tariff taxes other countries put on Made-in-America products.FOR FURTHER INFORMATION REGARDING THE NOTIFICATION, SEE THE FOLLOWING LINK: HTTPS://WWW.WASHINGTONPOST.COM/POLITICS/ US-11-NATIONS-FORMALLY-SIGN-LARGEST-REGIONAL-TRADE-DEAL-IN-HISTORY/2016/02/03/2DB4AB26-CAA4-11E5-88FF-E2D1B4289C2F_STORY.HTML

Spotlight on Legislation

New regulations, responses to legislation, and industry-driven voluntary guidelines for packaging across the globe.

16 Q1 2016

TRENDSPOTTING

Are You Thinking About a Bio-based Economy?

You took biology classes in school, and you thought, “I’m never going to use that stuff ever again!” Well think again, because Biology is about to have a dramatic effect on your business! What is Biotechnology? Most simplistically, biotechnology is using biology, or harnessing cellular and biomolecular process to develop technologies and process to improve our lives. If you review the following items, you can quickly see applications that will affect packaging in the very near future!

Biomimetic Biomimetic or biomimicry is the imitation of the models, systems, and elements of nature for the purpose of solving complex human problems. Simple example, Velcro. It mimics micro hooked structures like burs. Living organisms have well adapted structures and materials over time, and biomimetic looks to replicate those on a macro and nanoscale.

Algae Bio FuelsAlgae has the potential to be a promising long-term sustainable alternative to fossil fuels. Some of the immediate benefits would include; algae can be grown fast, It has high biofuel yields, algae consumes CO2, algae does not compete with agriculture in fact it uses lands unsuitable for agriculture use, it can be grown in the sea, algae can also purify wastewater.

Biomolecular EngineeringBiomolecular engineering is the application of engineering principles for the purposeful manipulation of molecules of biological origin. In short, scientists are manipulating carbohydrates, proteins, nucleic acids and lipids within the framework of the relation between their structures. These processes can manipulate or replace molecular level items to potentially change the characteristics of a substance, like strengthen a fiber, lightweight a glass or carbon fiber, create aqueous barriers, or change the thermal transfer properties.

Anaerobic Digestion Anaerobic digestion is a series of biological processes in which microorganisms break down biodegradable material in the absence of oxygen. One of the end products is biogas, which is combusted to generate electricity and heat, or can be processed into renewable natural gas and transportation fuels. Raising awareness of waste organic programs will continue to be looked at as alternatives for landfills, and alternative recycling programs. It’s vital to consider how does your packaging and product fit into these new end-of-life models.

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AN INTERVIEW WITH PaulineGrandvalet SENIOR ACCOUNT MANAGER EUROPE,

HAVI GLOBAL SOLUTIONS

ASK THE EXPERT

To position a product most effectively, developing the right packaging design and material that the brand communicates (premium, fresh, fun) is vital.

Pauline, tell us a little about yourself. Currently, I am Senior Account Manager Europe, focusing on promotional packaging. An essential part of my role is to identify key promotional packaging trends and practices that work in the QSR and retail sector, ensuring that our clients gain visibility and access to the most valuable and premium practices.

Prior to HGS, I graduated from the NEOMA (RMS) business school where I specialized in marketing. I

then began my career at an agency in Paris, managing major food and retail accounts working on promotional campaigns for multiple brands.

To start with, what is your definition of ‘promotional packaging’?

Promotional packaging is limited-time packaging created to catch final customers’ attention and support the brand to achieve its marketing objectives. It is successful when it speaks to the appropriate target consumer, whether existing or new, and delivers impactful and engaging messages, provoking reaction and ultimately product purchase.

Are there different ways that a brand can use packaging depending on its objectives?

There are varying strategies and tactics that depend on a brand’s specific marketing objectives, and packaging can be considered a product’s personal display window. To position a product most

effectively, developing the right packaging design and material that the brand communicates (premium, fresh, fun) is vital.

Here are considerations for a product to achieve the greatest consumer-appeal on the shelf:

• Understand final customer’s behavior: who are they, what do they like, how do they react to different promotional offers, who are the brand’s competitors and what is their offer? These are the questions that identify the brand’s right objectives and select the best marketing activities to reach its consumers.

• Catch consumers’ attention with enriched brand messaging. Packaging variations based on seasonal events (e.g. Christmas), thematic (sporting events) or co- branded packaging help develop product awareness and contribute to building that bridge between a brand’s values and consumers.

• Offer more than packaging and a product. On-package gaming and educational play activities create meaningful consumer engagement.

• Increase the average in-store ticket. Take advantage of classic on-package offers such as bundle offers or add-on coupon systems. Consider cross-selling within the same brand and/or range of products, possibly involving partners’ brands, as well.

• Retain consumers. Don’t shy away from loyalty and/or collectors programs.

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Considering your experience in the promotions industry, what is the motivation for a QSR brand to develop promotional packaging if we can clearly see the reasoning behind retail brands design packaging?

Packaging in QSR is the third source of consumer awareness after TV and POP. On average, a consumer spends 7 minutes in contact with product packaging (this is fifty-to-one hundred times more than the time that consumers are exposed to ads through other media); that brand messaging is then also exposed to all other people that the consumer interacts with or even passes by. The packaging is already there, so printing a unique promotional message/graphic that can change regularly is negligible in terms of costs compared to any traditional media.

The promotion mix is key to a brand’s strategy, and packaging is a vital part of that mix. What do you see as some emerging trends in promotional packaging?

Digital technologies that have emerged in recent years, e.g. QR codes or augmented reality, have created new opportunities for brands to further interact with final customers. Companies that use clever ways to implement technology advances into their packaging and marketing communication see a real return on investment in terms of increased brand interaction. Recent technologies are

necessary considerations for brands looking to provide a third dimension to their promotional voice, while mobile technologies allow the brands to be more relevant when using platforms and social media.

Most interesting to me though, are the brands which have been able to innovate by enhancing their offering

with a new and unexpected function to their packaging, making the best use of consumer trends and current technologies, while remaining close to their brand’s territory. For example, Pizza Huts’ Block Buster Box in Hong Kong that becomes an over-head projector or Kellogg’s Nutri Grain box that consumers can turn into a virtual reality headset in New Zealand.

Packaging touches so many parts of an organization. What are best practices to ensure collaboration from concept to implementation?

Packaging requires team work, involving experts from each key department. When working with clients on promotional packaging projects at HGS, our project and promotion managers are the central

work force pulling the information from all departments. They constitute a consolidated brief to our packaging suppliers, ensuring promotional packaging combines functional operations requirements, marketing requests, purchasing cost restrictions and supply chain requirements without forgetting QA and sustainability aspects. In addition, our marketing analysts monitor and assess the effectiveness of promotional activities, providing a platform for ongoing promotional program optimization.

I am very passionate about the topic and would be very happy to continue the discussion. I can be reached at pgrandvalet@havigs.com.

On average, a consumer spends 7 minutes in contact with product packaging (this is fifty-to-one hundred times more than the time that consumers are exposed to ads through other media)

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In the NewsBULLETIN

Sustainable Foodservice Packaging Europe JANUARY 2016

Klaus Rueth, Senior Director,

HGS Europe talks to Packaging

Europe about Sustainable

Foodservice and the ‘fresh

challenge’ of healthy eating.

http://www.packagingtoday.co.uk/

features/featuresustainable-

foodservice-4746647/

E VISIT HAVIGS.COM TO LEARN MORE

Design Principles- Appealing from Within Packaging Design JANUARY 2016

Brian Wagner, Vice President of

consulting solutions for Packaging

Technology Integrated Solutions

at HAVI Global Solutions, and Paul

Schmidt, associate for Packaging

Technology Integrated Solutions at

HAVI Global Solutions, comment

on the significance of packaging

in enabling sales in the vending

channel in this article from

Keith Loria about automated

branded retail.

http://www.packagedesignmag.

com/content/appealing-from-within

E VISIT HAVIGS.COM TO LEARN MORE

Organics: Recycling Trends in Organics Today vs. One Year Ago Waste Advantage JANUARY 2016

Anthony DiIenno, president of

Recycling & Waste Solutions at

HAVI Global Solutions, highlights

trends in organics recycling we will

see throughout 2016 and beyond in

this feature that appeared in Waste

Advantage.

http://wasteadvantagemag.com/

organics-recycling-trends-in-

organics-recycling-today-vs-one-

year-ago/

E VISIT HAVIGS.COM TO LEARN MORE

The Future of PackagingAsia Pacific Food Journal News JANUARY 2016 Ryan Nowak, Senior Director APMEA,

examines the Future of Packaging

and how manufacturers can keep their

products in the eye of consumers.

http://flipbook.digiflip.com/APFI2016/

JanFeb/flipviewerxpress.html

E VISIT HAVIGS.COM TO LEARN MORE

A Shared Vision: Executing Corporate Sustainability Initiatives at the Restaurant LevelThe Facilitator FEBRUARY 2016 Anthony DiIenno, president of

Recycling & Waste Solutions at HAVI

Global Solutions, highlights the key

roles restaurant facilities management

professionals play in ensuring

restaurants are meeting corporate

and store-level sustainability goals

and offers waste management ideas

for consideration in this contributed

article to RFMA’s The Facilitator.

http://onlinedigitalpublishing.com/

publication/?m=19186&l=1

E VISIT HAVIGS.COM TO LEARN MORE

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RFMA 2016 Gaylord Opryland Resort & Convention Center, Nashville, TN March 13 – 16, 2016

The RFMA 2016 Annual Conference is your next big chance to network with the largest gathering of Restaurant Facility Professionals and Vendors. It’s the one place where you can share insights and learn about the newest products and services needed to succeed. We will have all of the information you need to help you buckle up for a successful 2016! HAVI Global Solutions is a proud sponsor of the event. We look forward to seeing you in Nashville, TN! http://www.rfmaannualconference.com/

E VISIT HAVIGS.COM TO LEARN MORE

Packaging Technology Integrated Solutions is a division of HAVI Global Solutions (HGS). In this section, we share information we think might be helpful to you from other areas of our business - beyond our Packaging work.

Beyond Packaging

Restaurant Leadership ConferenceJW Marriott Desert Ridge Resort & Spa, Phoenix, AZ April 3 – 6, 2015

Save the date for the 2016 Restaurant Leadership Conference at JW Marriott Desert Ridge Resort & Spa in Phoenix, AZ. Build critical relationships that deliver business and personal success.http://restaurantleadership.com/ME2/Audiences/splash.asp

E VISIT HAVIGS.COM TO LEARN MORE

Delivering the LTO Promise

Limited Time Offers (LTOs) are a well-known strategy used in multiple industries as a way to break through in a crowded marketplace, to test a new menu item or product, react to seasonal trends, and to capture valuable market share. As the marketplace becomes even more crowded and consumers are more demanding about quality and variety, LTO’s are becoming even more prevalent among foodservice providers and continually rising in popularity. The 2015 State of the Foodservice Supply Chain from Technomic and HGS revealed that more than 90% of foodservice operators believe LTO’s are either extremely important or important to their organization. Interested in learning more? Signing up, register at, http://www.business-review-webinars.com/ webinar/Supply_Chain/Delivering_the_LTO_Promise-QnHKBwdR?utm_source=SP&utm_medium =IU&utm_campaign=HV8.

E VISIT HAVIGS.COM TO LEARN MORE

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OVERVIEWHAVI Global Solutions helps packaging provider Menasha manage the print supply chain and ensure color quality and consistency across its network of business units and printing plants through a centralized, digital color management solution.

Menasha Packaging Selects ColorSentry for Enterprise Print Quality Management

CASE STUDY FOCUS

CHALLENGE

Menasha Packaging Company, LLC, the industry’s largest independent, retail-focused packaging and merchandising solutions provider, sought help ensuring color quality of graphics and printing across its three business units and 12 printing plants.

Multiple Menasha printing plants often produce different elements of a larger package or point-of-purchase display for shared customers so it is crucial that the colors of each of the components align and will integrate seamlessly in the final product. This proved increasingly challenging for Menasha, however, because its printing plants operate independently of one another and each plant had been utilizing de-centralized print quality technology and assets. When it was time to purchase new equipment and software, the plants typically procured, installed and trained employees on equipment they selected independently and with minimum collaboration across the organization. Not only was this approach costly and lacking efficiency, it made effective print color management more difficult.

Menasha needed a single tool that would enable it to manage color as “One Menasha” and deliver a standardized color excellence to its broad base of customers.

SOLUTION

Menasha selected HAVI Global Solutions (HGS) ColorSentry solution for enterprise print quality management. Menasha was familiar with the solution because it had been using ColorSentry at the request of a customer who required each of its print suppliers to utilize the proprietary hardware and software to manage its print supply chain. By adding a customized, dedicated instance of ColorSentry, Menasha is able to apply the best practices in

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Menasha Packaging Selects ColorSentry for Enterprise Print Quality Management

HGS was able to synchronize the color standards from each of the different Menasha printing plants for greater quality control. The centralization of information and standards also helped foster consistency and efficiency.

CONSISTENT ColorSentry enabled Menasha to synchronize color standards across the organization and manage color as “One Menasha” on behalf of its customers, ensuring consistent color and print quality on every project.

TURNKEY No need to select hardware,

software, spectrophotometers and other equipment;

ColorSentry offers all of these in a turnkey solution that is customized with functionality to meet customers’ unique needs.

AFFORDABLE SaaS model and

developed best practices enabled Menasha to

implement ColorSentry across all of its plants simultaneously

without significant upfront investment in capital and assets.

EFFICIENT Online notifications, communication and feedback, digital asset storage and total job management accessible via a Web browser facilitates consistency and standardization across plants. ColorSentry also eliminated the inefficient and costly process of individual plants researching and purchasing their own color management equipment and software.

BENEFITS

color control not only to their broader client base but to leverage the acquired print data for improved operational performance and waste reduction. ColorSentry offers a centralized Web infrastructure and browser-based interface for selecting and specifying color standards and tolerances, certifying ink formulations, contract proof certification, press color approval and enterprise quality process control.

“Selecting ColorSentry was an easy decision for our organization because we knew what the tool was capable of and we trusted the quality it would deliver,” said Dan Lachapell, Plant Area Manager, Menasha. “We also were confident in the support we would receive from HAVI Global Solutions.”

ColorSentry’s SaaS model meant Menasha did not have to make a large upfront investment in new equipment and capital; rather, it was able to lease the software and hardware package and roll it out across all of its printing plants in one swift initiative. Employees would be able to work from a common platform accessible via the Web in any plant location and viewable on any Internet connected device. HGS customized functionality and installations to meet the unique needs of each plant and provided training to all users. Ongoing technical support is available to Menasha users 24/7.

HGS was able to synchronize the color standards from each of the different Menasha printing plants for greater quality control. The centralization of information and standards also helped foster consistency and efficiency. Additionally, because ColorSentry is a SaaS, HGS is able to implement updates and manage certifications and spectrophotometer calibrations across plants simultaneously.

“ColorSentry is a turnkey solution that combines hardware and software with a team of people who can customize solutions, execute training and implementation, manage updates and provide 24/7 support,” said Gary Shadick, Director of Quality, Menasha. “HAVI Global Solutions simplifies print management so we can focus on doing what we do best – delivering superior creative packaging and print solutions to our customers.”

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