How’s the FDA’s new food safety rule affecting how food gets packaged?
One of the hats I’ve worn of late is that of Editor of Packaging World‘s 2014 Food Safety Playbook for 2014 (as well as the preceding, inaugural edition).
Among the updates packed into the 101-page e-book were the results of a brief survey of U.S. food and beverage product packagers done in Q1, gauging industry readiness for the U.S. Food and Drug Administration’s Food Safety Modernization Act (FSMA) now being implemented in rolling deadlines.
The results were optimistic; a large and in some aspects overwhelming majority reported that they have already completed the law’s key requirements into their food safety plans, or will in the coming year.
Since this blog is open to all who click, I’ll say that there’s a LOT to the law, the industry’s reaction, overall compliance and issues that’d have lay-people wondering: “What does it all mean?”
In general, I think the law’s a good thing. If you want to discuss in depth, I’ll invite you to read the whole playbook, or be smart enough not to have to — in which case I’ll refer you to someone with first-hand knowledge of the law, and of food safety. I was once certified to be a food safety guy in the dairy industry, but really, was no expert. Ever.
Be forewarned; I don’t divulge all of the results in this story, but there is a link to the full playbook at that link. If you’re in the industry, I hope you won’t mind having to register to get the playbook for free.
Goin’ mobile: How many people never fill that first prescription? Not to worry; there’s an app on the way for that, too — GetMyRx — as we reported in this story at Pharmaceutical Commerce.
Developer GetMyRx Inc.’s CEO Luis Angel says “at least a few hundred” scrips have been filled” since the iPhone app’s soft launch in the Miami-Dade, Fla., market in November last year. The app links to fee-paying pharmacies in Angel’s network, as opposed to a single store or chain, and lets people enter data or scan labels as well as insurance cards, coupons and related discount cards. New York and San Fran are top-priority markets for rollout perhaps by summer, Angel told me.
This and other moves by chains are hope to combat patient abandonment issues surrounding initial prescription fills, which a Harvard study indicates may constitute 30% of patients and Angel says has gotta represent a market worth at least $100 billion.
Major brands in various industries have shed all but their deepest core competencies. For the largest U.S. and global brands, this has typically led to a major offloading of manufacturing, packaging and distribution- and logistics-related functions. The reason is simple; for many if not most brands, much of those functions are commodities, whereas the real and profit-adding value to the brand is the brand itself. When the product can be manufactured and otherwise acted upon using standard equipment, processes and services that meet the brand’s specifications, even the sales function can be outsourced.
Sales is so closely linked to marketing in the Big Brand wheelhouse, it may surprise you to learn that sales, even in the highly specialized life sciences business, is often outsourced. How much of the Big Pharma sales force is outsourced depends on lots of product variables, but the use CSOs, or contract sales organizations, has been mainstream for many years.
How do pharma firms and their CSOs manage the ebbs and flows of the market and tenor workforces? In part, CSOs have been busy scooping-up experienced sales reps as brands reduce their headcount. CSOs area also laying the ground work for global growth through enhanced IT competency, broader service offerings and international partnerships and acquisitions. Online and mobile app use and the resulting collaborative capabilities of sales force software has only hastened the integration of in-house and outside contractors in communicating to customers, in this case healthcare providers. (See article linked below for an explanation of the graphic.)
For this outside the company’s biopharma orbit, Zevacor Molecular based in Fishers, In
d., the company’s 70-MeV (as in million electron volts) commercial cyclotron is reportedly to be the first and only 70-MeV unit dedicated to medical use in the United States. Upon startup, which is planned for the fall of 2016, it’ll primarily produce Strontium 82 (Sr-82), which in turn produces Rubidium (Rb-82) injected into patients for cardiac imaging. Start-up is planned by the fall of 2016.
The big deal, John Zehner, COO of Zevacor told me, is that national labs from Brookhaven and Los Alamos to those in Canada, South Africa, Russia and elsewhere produce much of the needed supplies only “when they have time” leading to an impossible situation by healthcare providers to “keep the supply even so the product is available day in and day out.”
Until the fall of 2016, here’s wishing the patients in your life a stable supply of isotopes.
Ever see one of those red boxes with blinking LEDs offering cents-off coupons for Oreos in the cookie aisle, or Tide in the detergent aisle? Ever see a video display that springs to life when you pass by?
In the prescription drug business, where drug-makers are looking to compete with OTC (over-the-counter) remedies that treat similar ailments, the same kind of promotional gizmos are NOT coming to a retail pharmacy aisle near you. Why not?
Because they’re already here.
A brand selling prescription Restasis eye drops can now buy promo space and locate one of the point-of-sale (POS) boxes next to OTC Visene, in the process, lifting branded prescription sales an average 10-percent for mature products (vs. much higher for new-drug launches), with ROI of $6 for each dollar spent.
These kinds of promos are common across consumer goods, with companies like Valassis and News Corp’s News America Marketing going head to head hawking soap, cookies and in cases, OTC remedies. Another firm, Rx Edge Pharmacy Networks, East Dundee, Ill., specializes in the prescription stuff, which is “much, much more complicated” to promote in terms of regulatory due diligence, Jim O’Dea, CEO, told me, adding that the need for black-box warnings, patient information and other requirements appears to be on a trajectory to keep ballooning as leaflects (shown here) turn into whole booklets.
To state the obvious, contract packaging is rapidly evolving. The core outsourced-packaging function is easily understood, but the form and function of the contract packaging organization is a moving target. Decades ago, a co-packer was defined by the machines the company had on the floor.
Packaging-specific services remain a much needed, much in-demand core competency. Consumers want the benefits of the latest primary containers, pouches, blisters, pillows, stick packs, and/or the latest secondary innovations in POP, club packs, multi-packs and the like.
It’s why, to cite one of innumerable examples, Salt Lake City-based Northstar Labs has steadily upgraded its injection molding, liquid filling and four-color digital label printing capabilities. And it’s why Fairport, NY-based LiDestri Food & Beverage, for instance, leveraged its contract manufacturing and packaging smarts to develop a new multi-compartment flexible pouch format and expand into pharmaceuticals.
Brands, too, find themselves in the co-packing game. Toad-Ally Snax, Bristol-PA, which markets its own brand of chocolate-covered goodies, nets new business through additional contract and private label work—something even the largest brand marketer-manufacturers do whenever company-owned production assets sit idle for so much as a shift a week—just to keep capacity at 100% and feed the bottom line.
Those for whom co-packing is the core focus are doing much more these days to give a brand anything it can, from upstream package development and manufacturing to downstream warehousing, fulfillment and logistics.
Fave Juice, for example, outsourced just about everything but product development and marketing to The Scoular Company, which manages everything from ingredient and material procurement to manufacturing, logistics and contract packaging—even finding and managing day-to-day operations and growing a nationwide network of co-packers.
One day, it’ll be hard to define the very term “contract packager,” because the overarching industry trend isn’t on four-walls production, but on the supply chain. Whereas co-packers were once seen as a “stop-gap” solution, tomorrow’s contract packagers are “sophisticated logistical specialists,” says Chris Nutley, president of MSW Packaging Services and Contract Packaging Association president.
This reality is reinforced by Industry consolidation, notes Lisa Shambro, executive director of the Foundation for Strategic Sourcing, in her latest column. She points to private equity firm Wind Point Partners’ merger of Hearthside Food Solutions and co-packer Ryt-way Industries, which has created a $1-billion contract food and consumer goods manufacturer-packager with 19 facilities across seven states.
Likewise, Coregistics, itself a merger of co-pack and supply chain firms, just acquired Chicago’s Cano Packaging to offer food brands “increasing operational efficiency while significantly reducing their total supply chain costs,” according to CEO Eric Wilhelm.
As contract manufacturers and packagers broaden their horizons, large logistics firms are also deepening their packaging capabilities. GENCO, for instance, has formalized its contract packaging operations into a new, dedicated business unit. Dave Mabon, president of the business, says that brands are seeing savings into the millions of dollars due to tight partnerships aided by data visibility, or integration, across the “functional silos” present in large organizations.
The savings in purchasing, packaging, logistics and other “silos” need to be seen in cumulative form. Managers who ask, “What’s in it for my department?” need to recalibrate their attitudes and put on their cross-functional thinking caps.
Contractors need to maintain tight communication but also remember that big brands will continue to outsource as well as take work back in-house as the spreadsheet dictates. What should they do? “Enjoy the ride while you have it—and build other business for when you don’t,” advises Tom Bacon of Aaron Thomas Co., in the latest Personal Best profile.
Perhaps the hardest job in any co-pack relationship is finding the right fit in the first place. Online tools can help, from “Find a Contract Packager” link on the CPA’s homepage (www.contractpackaging.org) to Sealed Air’s Co-Packer Connection (www.copackerconnection.com), a matchmaking database service that now boasts more than 1,000 facilities indexed down to their machinery, financials, certifications, and more—as we’ve covered in the news.
Come to think of it, everyone and everything I’ve mentioned here, and more, is detailed in this July/August Contract Packaging, in print and online. Read on!