Interview with Philip Bautil, Managing Director
"Our company purpose is to redefine packaging for a changing world. We think differently, we innovate together with our customers and other stakeholders and put sustainability at the heart of everything we do."
Your thoughts on the current situation of the packaging industry in Germany/Switzerland?
In Germany and Switzerland, we operate in very competitive markets and this has resulted in an overall slowing of the the economy. However, we also see a rising demand for smart e-commerce packaging solutions and an ever increasing awareness on sustainability topics and therefore a rising demand for sustainable packaging solutions. As DS Smith we are very well positioned in both of these areas which offer a huge growth potential to the packaging industry.
In our 22 plants in Germany and Switzerland we work very closely together with our customers and take their whole supply cycle into account to develop the best possible solutions. We proactively work on smart innovations to help our customers to succeed in their markets.
How have customer expectations evolved over recent years?
There is a strong focus on sustainable solutions. Corrugated packaging plays an important role and is seen very positive by consumers. Lots of shoppers are even willing to pay more for packaging which is more sustainable.
E-commerce is growing rapidly across different categories and shoppers expect more from packaging than just to protect the delivered goods. They expect packaging tailor made to the product, with no more material than necessary and no void fill. They also want an unbeatable unboxing experience when unpacking the goods. Their experiences when receiving the ordered goods are immediately shared on social media – the good ones as well as the bad ones. If a pack does not perform, brand reputation is at a risk.
Another consumer trend we see is towards individualisation. People want to have the feeling that the product is tailor made for them. Quite a lot of brands already individualised their primary packaging, e. g. the Coca-Cola campaign with different names on the bottles. With the new possibilities that innovative digital pre-print offers, we are now able to do the same for the secondary packaging and for displays. It is now for example possible to produce one million boxes with a different print, so every single box is unique. We put this machine into operation in our Fulda site in Germany in May 2018.
"Another consumer trend we see is towards individualisation. People want to have the feeling that the product is tailor made for them... It is now for example possible to produce one million boxes with a different print, so every single box is unique."
Where is your industry discovering new opportunities?
From my point of view e-commerce and Plastic Replacement are the two most important areas. Both offer our industry big growth opportunities and as DS Smith we put a lot of effort into developing proactively and also together with our customers the most advanced solutions, which help to tackle the challenges we are facing.
The challenges that the industry is facing and how are you addressing them?
Packaging for online trade must master completely different challenges compared to packaging that goes into classic retail. For example, there are up to 50 touchpoints until the goods are delivered to the shopper in e-commerce. We have developed a new testing methodology which we call DISCS – this stands for Drop, Impact, Shake, Crush and Shock. It is unique in our industry and helps to make sure that the packaging is fit for all challenges e-commerce is giving.
Our innovative solutions ensure, that the product is not only well protected during transport, they also optimize processes and protect the brand. We develop tailor made, right size packaging solutions. One of these is Made2fit which exists as manual and automated version and adapts the pack size to the product in all three dimensions.
In German media you see daily reports on the topic of plastics polluting our oceans and onshore. A recent study we conducted together with L`ObSoCo showed that a huge majority across Europe – nine in ten respondents (91.5%) – said they would choose the packaging with 85% less plastic, when offered a choice between two packaging options for the same quality of product. When asked if they would pay a 12½% premium for this reduced-plastic packaging option, 62% of respondents said they were willing to do so. In Germany we invented the Bowl Concept - a product range with which we can replace up to 85% of the plastic used, compared to a conventional plastic tray.
Our report ‘Transforming the Supermarket Aisle’, developed in conjunction with White Space, the leading growth strategy consultancy, identifies plastic packaging, such as fresh produce punnets and shrink wrap, which supermarkets can replace with alternative, renewable materials. The five categories identified account for over 70 billion individual units of plastic (over 1.5 million tonnes) per year and are highlighted as targets for reduction and replacement, for example with corrugated solutions. We made also some game changing developments in this area, e. g. fruit punnets out of corrugated board.
Examples of DS Smith leads the way with innovation and intelligent solutions?
Our company purpose is to redefine packaging for a changing world. This implies that all of our solutions are tailor made for the respective Supply Cycle and product they are used for. We have a very close collaboration with our customers and work together in our DS Smith Impact Centre and PackRight Centre.
One example for an innovative e-commerce-solution is e@Box. It is product and transport packaging all-in-one. For the brand manufacturer, this all-in-one solution means less material, time and cost expenditure combined with an extra plus in product protection and shopping experience. The German food blogger Sonja Meise used the box to launch a limited-edition surprise box with new confectionery products as a special treat for her followers. The first batch was sold out within only 24 hours. The award-winning e@Box all-in-one solution performed very well and – thanks to its box-in-box system – turned the unpacking into an unforgettable experience, which has been shared by many of Sonjas Followers online. A true eye-catcher is the striking design of the inside box, whose graphic layouts were created in close cooperation between us and the food blogger. Various motifs were printed in one run with the revolutionary rotary digital pre-printing technology.
An example for a more sustainable packaging solution it the Bowl Concept, developed by a creative team in Germany. With the innovative solution we can reduce the amount of plastic used by up to 85 % compared to a conventional plastic tray, e. g. used for minced meat. The solution consists of a corrugated cardboard tray with an inner foil and a lid foil. It can be printed all around – also on the inside. Since November it is available in retail.
The importance of good leadership and how do you approach it?
Good leadership is key as the war for talent is raging and people want to work for an inspiring leader. We need to create a vision for the future that appeals to our employees, which they want to subscribe to, in which they can develop themselves and to which they can contribute. Good communication and treating everybody with respect play a key role for me as well. And of course a leader should try hard to live up to what he expects from his team and be a role model.
"Good leadership is key as the war for talent is raging and people want to work for an inspiring leader. We need to create a vision for the future that appeals to our employees, which they want to subscribe to, in which they can develop themselves and to which they can contribute. "
What are your ingredients for success as a Managing Director?
One of our four strategic goals at DS Smith is to realise the potential of our people. I strongly believe in developing and empowering our people, as they are the most valuable asset we have and the main factor to drive our future success. In my opinion, it is also key to have a clear purpose and direction and make sure that all our employees are aware of this. At the same time, we have to talk and listen to our customers and work closely together with them on their challenges to make them more successful and us better.
How your company will continue to exceed customer expectations in the future?
Our company purpose is to redefine packaging for a changing world. We think differently, we innovate together with our customers and other stakeholders and put sustainability at the heart of everything we do. Our business model is centered on the circular economy and we just recently announced our partnership with the Ellen MacArthur Foundation. We are the Foundation’s 11th Global Partner besides Intesa Sanpaolo, Danone, Google, H&M, Blackrock, Phillips, Renault, Solvay, SC Johnson and Unilever. This partnership will be extremely important for us in developing our products and services further to delight our customers.
We also make sure to develop the right strategies by knowing the relevant trends and insights. As DS Smith we take the whole supply cycle of our customers into account to develop sustainable display and packaging solutions out of corrugated cardboard, which deliver real value. We aim to be the leading supplier of innovative, sustainable display and packaging solutions.
Is Brexit affecting your plans and if so your thoughts?
We believe the Government in UK is aware of how critical the Brexit process is to the success of the UK economy and like many other businesses, we are keen to see a rapid and positive resolution and the maintenance of frictionless trade with our European markets. Our Brexit plans cover several critical areas including: procurement, movement of goods, logistics, warehousing and customs processes to minimize business disruption that is likely in the event of a disorderly Brexit.
It is too early to predict the nature of the Brexit agreement between the UK and European Union but we are taking every measure to ensure an uninterrupted service. Given the nature of our manufacturing model, supply chain and generally modest levels of imports/exports between the two markets, we are not anticipating material impacts on our supply cycle in Germany/Switzerland.
"As DS Smith we take the whole supply cycle of our customers into account to develop sustainable display and packaging solutions out of corrugated cardboard, which deliver real value. We aim to be the leading supplier of innovative, sustainable display and packaging solutions."
About DS Smith
DS Smith is a leading provider of corrugated worldwide, supported by recycling and papermaking operations. Headquartered in London and a member of the FTSE 100, DS Smith focuses on creating innovative sustainable packaging solutions in 37 countries employing around 31,000 people. Using the combined expertise of its divisions – including Packaging, Recycling, Paper – DS Smith works with customers to deliver solutions that reduce complexity and deliver results throughout the supply cycle. Its history can be traced back to the box-making businesses started in the 1940s by the Smith family.
For more information: www.dssmith.com