From gluten-free bakery start-ups to health bar entrants, the US has seen a raft of small companies entering the market, fueled by a consumer desire to experiment and a retail trend to buy local.
Greg Berguig, vice president of marketing at PAC Machinery Group, said this flurry of start-ups had generated considerable business interest over the past couple of years.
“Where we’ve seen most of our growth has been with our flow wrappers, and we have a couple of entry-level flow wrappers for people who are making gluten-free or health bars for the first time – a lot of the time it’s their first piece of packaging equipment,” he told BakeryandSnacks.com at Pack Expo 2014 in Chicago earlier this month.
For start-ups, he said machinery that automated packaging, like flow wrappers, was often the first port of call for upscaling business.
“You can get one person packing something like 100 packs per minute let’s say, which is a lot more than they were doing before.”
Big business in small firms?
Asked what portion of business start-ups represented for PAC Machinery Group, Berguig admitted it was relatively small when compared with large Fortune 500 firms they worked with, but said the business was important nonetheless.
“It’s growing, and our history has been that we started in the early 60s with small, table-top sealers, so for a lot of people we were their first sealer. We kind of take the same view with our flow wrappers – we’re their first contact for this equipment.”
In addition, start-up companies were only going to flourish, he said, especially when mimicking the look and feel of a big brand was easier than ever with the packaging materials available on the market.
“We’ve seen a lot more of these entrants, especially with the likes of Whole Foods trying to buy local. There are so many companies with new Whole Foods orders thinking ‘wow, I need to sort out my supply’.”
A consultative approach
Working with these smaller firms and first-time businesses, however, required an alternative approach, Berguig said.
“We try to implore more of a consultative approach…We’re try to understand what they are trying to do.”
He said start-ups interested in learning more about the machinery, for example, could send product samples to PAC for testing. “They send them in and we shoot a little video of the machine running with their products so they can see what it can do.”