Rising materials prices may drive innovation
Warnings of rising materials prices look set to drive increased innovation in the food canning industry as processors and materials suppliers seek to offset costs.
Impress chief executive Francis Labbé has notified the trade that it is implementing an increase of 10-15% on can prices in Europe, depending on product type. He attributed the move to soaring energy and transport costs, increasingly expensive laquers, inks and coatings and supply rationing for tin-plate and tin-free steels used in can-making.
“We are making up the shortfalls as far as possible, but this is forcing us to purchase tin-plate at spot prices far in excess of supply contracts booked for the full calendar year 2008,” said Labbé. “While average tin-plate prices have already increased, there is unfortunately worse to come. All the major tin-plate suppliers have announced huge price increases over the coming months.”
He said Impress would make every effort to ensure continuity of supply and reduce the metal and energy components in its products.
Impress’ stark predictions came after canned materials provider Corus Packaging Plus warned it was expecting to raise prices in the first quarter of its next financial year by at least 30%.
Steve Thomas, chairman of Canned Food UK, said: “All categories in the convenience food sector are experiencing increased raw materials costs, whether it is in packaging or food, and canned food is no exception.”
However, he insisted that the rise in prices was not denting the market yet. “The canned food market, worth £1.7bn, continues to grow steadily, reflecting the renewed interest in the sector from a nutritional and economical perspective. However, it is also due to new food products plus innovation within metal packaging itself with the development of easier and safer opening cans and new shapes and decoration.”
Major users of canned food materials in the UK include HJ Heinz and Premier Foods. No one at either company was available for comment on whether canned materials prices would be translated into higher retail prices or what they were doing to mitigate costs.
However, Heinz is known to be working with the Waste Reduction Action Programme (WRAP), its can-end supplier Impress and steel supplier Corus to reduce the amount of material it uses.
New can-ends were trialled at Heinz’s Kitt Green factory in Lancashire, using ends that were 10% thinner than previous ones, measuring 0.18mm instead of 20mm. This has resulted in a saving of 1,400t of steel, worth £404,000, according to WRAP. Work is understood to be underway to reduce the weight of the can body.
