“Made in USA”, “Proudly made in America,” “Rendez-vous en France”, “Origine France Garantie”: brands certifying the origin of manufactured products have mushroomed over the past 10 years, like so many signs of a growing worry, as much on the part of those struck by mass unemployment as of manufacturers threatened by international competition. In France, the so-called “Minister of Industrial Renewal” has launched a software making it possible to calculate the benefits of inshoring. The software is made available, free of charge, to companies through the Invest in France Agency (Agence Française pour les Investissements Internationaux).
The irresistible rise of Asia
These initiatives, however, seem insignificant in view of a movement that, for years, has gradually extended on from the technological progress of Asian suppliers.
Today, even products with a very high added value are affected.
“A few years ago, few luxury packaging suppliers claimed to have production lines in Asia,” explains Yannick Vermorel, president of Le French Cosmetic Workshop, a company specialized in the supply of “made in France” solutions for cosmetic private label brands. “Today, it’s the opposite that strikes you.”
Actually, the increase in quality of Asian beauty packaging suppliers is impressive. Technology transfers from Japan to Korea or from Europe to China have facilitated the dazzling increase in know-how in emerging countries. The impressive growth of the Cosmoprof Asia tradeshow - 2,000 exhibitors and 55,000 visitors in 2012 - demonstrates that Asia is now a key area for the beauty industry. The de-industrialization movement has reached such levels in Europe and North America that some products and accessories are practically only available in Asia. “That’s the case, for example of standard makeup boxes and multi-material accessories like brushes,’’ explains Mr. Vermorel.
Sustainable development
However inshoring no longer seems exactly utopian and several cosmetics players affirm that it is indeed happening. “The thinking of managers of major brands in Germany or France is that consumers are increasingly aware of the social consequences of their purchasing acts,” says Marie-Laure Viellard, in charge of marketing and communications at Leoplast, an Italian manufacturer of packaging and technical pieces in injected plastic for cosmetics products and a specialist of eco-designed products.
Obviously, this concerns, in priority, the ethical segment. “Certified organic brands in Germany or distributers such as DM are getting more and more questions from consumers on this subject,” adds Ms. Viellard. Aware of the contradiction between calls for environmental friendliness, on the one hand, and supplies in Asia, on the other hand, these brands have updated their guidelines for good practices by imposing that a minimum percentage of packaging products be made in Europe.
Quadpack, a group until now exclusively centred on quality packaging sourcing, notably in Korea, has recently acquired the Spanish maker of wood ingredients, Technotraf. For its first manufacturing site, Quadpack chose Europe. Of course this involved guaranteeing that its customers would have access to innovative products of very high quality. But the acquisition can also be explained by “Quadpack’s desire to diversify its supply sources to ethical products: made in Europe from sustainable materials.”
Quality, flexibility and innovation
But are ethics and generosity enough? Other factors promote the inshoring movement: higher transport costs, delivery schedules that are too long, difficulties coordinating with teams located at a great distance, problems of quality, non-compliance and the risk of knock-offs. “Asia is synonymous with huge quantities and unpredictable quality,” according to Vermorel.
“Reliability and innovation are essential to success and are intimately related to proximity to customers,” thinks Olivier Salaun, CEO of PSB Industries, whose subsidiary Texen, the world’s 4th-ranked supplier of cosmetics and fragrance packaging, has sites in France and the
Americas.
Proximity also makes it possible to streamline flow, shorten delivery schedules and thus customer stocks. In addition, the tightening of European regulations, with REACH and the new cosmetics regulations, is not neutral. For Laurence Mulon, an independent consultant, “these texts make it necessary for brands to get new information from their suppliers or even to modify some manufacturing processes, which Asian companies haven’t always anticipated.”
But players agree on the fact that the growth, or not, of the phenomenon will necessarily be accompanied by adaptation on the part of European and North American suppliers. This is because costs don’t explain everything, notably in view of the Korean competition that is not necessarily very cheap but which has proven to be very flexible and creative.
Towards a multipolar world
This is all the more so, as emerging markets are continuing to develop and the technological transfers required to serve these new customers will continue as a result. New factories will thus open in Asia and Latin America, new partnerships with local suppliers will be made and new competitors will gain power.
A shift that Abléa has chosen to anticipate. Following the buyout of Rexam Personal Care, the group now has a network of 46 sites in 14 countries and is present in four different trade segments. Albéa is showing itself to be both local and global. And the strategy is certainly well adapted to the new challenges of a world that is more multipolar than ever, provided it serves also to maintain the group’s capacity for innovation, which remains the key to success for all players, whatever their size.
