Regional review

  • EMEA
  • APAC
  • Americas
Flexible and innovative offer

Successful go-to-market strategies

  • 755 m

    Core revenue 2018: €733m

  • + 2.8 %

    change at constant currency

Introduction

SIG’s aseptic carton packaging business originated in Germany and Europe remains the largest region globally for aseptic carton packaging. Our largest sleeve production plant is in Linnich, where we also assemble filling machines and conduct R&D and consumer trials.

Our presence in the Middle East and Africa is led by our 50/50 joint venture SIG Combibloc Obeikan. Sales of the joint venture are not consolidated but our share of net income is recognised in the group income statement.

Market overview

Increasing share of wallet and winning new customers in Europe

In a mature market for white milk and juice, many food and beverage companies are focused on efficiency and cost. However, there are opportunities for growth from emerging categories such as plant-based dairy alternatives and water. Consumers’ desire for novelty and variety, with an increasing focus on healthy and natural products, is giving rise to a proliferation of SKUs. This means that the value chain has to become more agile and flexible.

In this environment, SIG is pursuing two clear go-to-market strategies. We are not only defending our position but also growing with existing customers by ensuring that we can meet their need for flexible and cost-efficient solutions. We are winning new customers and entering into and growing in new categories, while at the same time expanding our European reach. Our progress is supported by our filling capabilities and our unique offer in terms of size and format flexibility.

Our strategies are underpinned by our core strengths of operational excellence and advanced after-sales service. We have upgraded our solution offering and portfolio as well as our sales tools and processes. Moreover, the strength of our packs’ environmental credentials is an increasingly important differentiator in our discussions with customers. Our sustainable product innovation enables us to help customers respond to new regulatory requirements and meet their own targets for sustainable packaging.

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Growth through partnership in Middle East Africa

SIG Combibloc Obeikan’s geographic territory spans 70 countries in Middle East Africa (MEA), with revenue currently generated in 17 countries, the most significant of which are Saudi Arabia, South Africa, Egypt, Algeria and Iraq. There is further potential for expansion in selected markets.

The diversity of MEA means catering to the needs of a wide variety of consumers and customers. The Gulf states and South Africa are more sophisticated markets, with relatively high incomes and demanding consumers and customers. Sub-Saharan Africa generally is more focused on affordability, with growth driven by rising incomes and urbanisation.

Favourable demographics

Fast innovation cycles

  • 667 m

    Core revenue 2018: €598m

  • + 6.0 %

    change at constant currency

Market overview

Millions of new consumers create multiple growth opportunities

Most countries in the Asia Pacific region continue to show positive macro trends, with economic growth bringing higher living standards. Across many markets in South East Asia and India, millions of people are only now starting to consume packaged food and beverages. This rise of these new consumers, driven by rising disposable income, urbanisation and new consumption habits, represents a huge opportunity for our industry.

At the same time, young and growing populations are adopting modern lifestyles, with a focus on convenience and more on-the-go consumption. Consumers are also increasingly aware of health and wellness issues and are looking for premium and higher quality products, with sustainability credentials also of growing importance.

The liquid dairy market – which accounts for most of SIG’s business in Asia Pacific – continued to expand in 2019. In China, ambient high-viscous drinking yogurt remains the fastest-growing product category and is benefiting from the ongoing trend towards premiumisation.

Regional Tech Centre in China attracts customers from across the region

In November 2019, we were proud to officially open our new Asia Pacific Tech Centre in Suzhou which will cater to the faster innovation cycles in Asia Pacific and Oceania. Here we are testing innovative structures, shapes and product formulations. We are also driving the expansion of combismile into new and growing categories such as vegetable protein drinks and ambient flavoured milk.

Customers have been visiting the Tech Centre since the end of 2018, in order to test for themselves our total solutions offering comprising upstream, downstream and formulations. The Tech Centre also has a world-class facility for machine assembly and training services.

Diversity in dairy

From affordable to premium products

  • 330 m

    Core revenue 2018: €297m

  • + 9.7 %

    change at constant currency

Market overview

A vast array of consumers with different needs

The region covers a vast array of consumers with different needs, demanding appropriate go-to-market strategies in each area.

Carton represents over 70% of total ambient packaging in our key South American markets. In Brazil, the world’s second-largest aseptic carton market, there is a focus on meeting the key consumer trends of affordability as well as naturalness and authenticity. The flexibility of our filling lines is a key tool when it comes to affordability, as customers can rapidly switch between sizes and products depending on consumer spending power.

Digitalisation is also playing an increasing role as consumers seek a customised experience and assurance on the origin of the product they are drinking. And, as elsewhere in the world, consumers in South America are increasingly mobile.

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2019 in review

Offering affordability and authenticity

Sales growth in 2019 was robust across the region.

We were able to achieve growth in Brazil despite continuing uncertainty in the macro-economic environment. We continue to demonstrate our strength in enabling customers to fill high-viscous products such as sweetened condensed milk. These products are benefiting from a return to cooking at home, including the preparation of home-made desserts.

Catering to the need for affordable on-the-go consumption, we launched 150ml formats for still fruit drinks and flavoured milk with two of our key Brazilian customers.

With the rising trend in South America towards naturalness and authenticity, consumers are seeking products and brands with values to which they can connect. They want to know what they are buying and where it comes from. Dairy producer Languiru has launched Origem Milk, a new premium milk which uses end-to-end traceability to track the milk from selected farms to the shelf. By scanning a QR code printed on the package, consumers can identify the farm at which the milk was produced and the time of collection, and can follow its path all the way through to packaging.