Beverage Multipackers Lose ROI When Choosing a Board Contract OEM
Emerging trends in the beverage industry are influencing customer's packaging habits and, in turn, affecting their purchasing behaviors when it comes to equipment buying. As the industry moves away from plastic sleeves, wraps, and rings, and towards new materials, manufacturers are looking for new ways to maximize their buying power. Rather than purchase new equipment outright and shopping independently for material suppliers, manufacturers may look to carton suppliers who loan out their equipment to customers that enter into bundled and long-term contracts with them. These suppliers provide the proprietary equipment and carton materials used to package the product and make back their money on each carton. For instance, if a company is manufacturing a package of 12 soda cans, that is what the carton suppliers will earn revenue on. Contracts such as this are a major risk for most customers as they limit their manufacturing flexibility, minimize return on investment, and could potentially reduce their revenue stream and limit their growth.
Beverage manufacturers and co-packers, in particular, are motivated to partner with carton suppliers because of the low up-front costs associated with their contract, but these relationships come with high long-term risks attached. When a customer chooses not to purchase their equipment outright, they are forfeiting the ability to make adjustments that meet their specific packaging and business needs. Whereas, R.A Jones has a longstanding commitment to quality and personalization that sustains and grows with our customers. Additionally, if the carton supplier determines that a particular carton run is too costly for them to manufacture, they have the ability to deny material costs to the customer, leaving them without manufacturing options. In other words, a supplier may price a customer out of potential opportunities as they can dictate carton costs—especially on smaller orders. In a similar situation with a competing OEM, the customer has the freedom to shop around and make their decisions for themselves based on their bottom line, as opposed to their carton suppliers.
This exact situation happened to a new R.A Jones customer that manufactures and distributes product for leading soft drink and carbonated beverage brands. Their recent partnership with a competing OEM that operates based on carton contracts ended abruptly at the completion of their contract term. The OEM carton supplier determined that the value of the board contract they were getting from the customer was no longer conducive for their business. The customer was left without a material supplier and in need of immediate equipment support. R.A Jones was able to refresh their business and supply them with the equipment they needed to sustain their current operation and allow them to grow in the future. While the short-term benefits of partnering with a carton supplier OEM was what initially drew our new customer to them, they realized that if they had purchased their equipment outright, they would have had the ability to choose from any carton supplier they saw fit and not be at the mercy of the board contract OEM’s business decisions. The overall return on investment is higher for companies that choose multipacking equipment from companies such as ours. By factoring in the quality of R.A Jones, and our history of long-running machinery, it is clear that companies who invest in high-end equipment get more for their investments as their companies grow. Our new customer was so pleased with the working relationship with us, that they have plans on ordering multiple machines over the next 10 years. Below is an example of one of our popular high-speed beverage multipackers, the Meridian XR MPS-300 running plastic bottles.
When settling on an OEM to partner with, choose the one with high customer retention rates and a long-standing history of high-quality equipment and customer service. R.A Jones has proudly worked with manufacturers of all sizes for decades and can help your business meet their specific packaging needs for years to come. We have the experience and long history of high-end quality machinery and customer experience to support customers who have had negative experiences from past supplier relationships.
To learn more about our beverage multipacking machines and what R.A Jones can do for you and your production lines, reach out to one of our specialists at firstname.lastname@example.org or fill out the form below.