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NNZ Case Study

NNZ is a family business that has been active in the field of agricultural and industrial packaging for more than 85 years. The company started out as a trading house selling jute bags, which were the primary packaging material for a large variety of products, such as grain, flour, coal and potatoes. After the Second World War, other packaging materials were introduced, first paper and later plastics, and in the 1960s NNZ started to manufacture its own plastic packaging. Although the firm had its roots in the agricultural sector, it also started to sell

to industry. In the 1990s, both trading and manufacturing demanded substantial investment and management made the strategic decision to focus on trading and outsource manufacturing. NNZ invested primarily in growth by acquiring small local firms. Around 2000, the firm decided to consolidate its acquisitions by streamlining its operations, creating several new departments and building the corporate brand. In 2010, NNZ

has grown into a company with 160 employees and 18 offices in 12 countries.

The company has its headquarters in the northern part of the Netherlands, with branches in Europe, the US and Canada. Annual sales are approximately %100 million, 90 percent of which is still realized in the agricultural sector. Products NNZ offers its agricultural and industrial customers a wide range of products. Agricultural customers require just-in-time deliveries, freshness, efficiency and responsible use of raw materials. Agricultural customers are served with products such as films, trays, net packaging, bio packaging, paper and cardboard packaging, PP sacks, jute bags, flexible bulk containers, transit packaging and various accessories (such as labels, clipping wire, strapping, seals and buckles). Industrial markets are faced with the challenges of increasing scale, globalization, cost control, quality demands and limited stock. These customers are served with a range of flexible bulk containers, paper bags, PE packaging, PP sacks and bags and transit packaging. NNZ and innovation. Even though NNZ is a trading company, it does have a Marketing and Innovation department. NNZ always believed very strongly in innovation and formulated the goal of introducing at least two new packaging per year.Marketing and Innovation collects factual information about markets, products, raw materials, packaging

NNZ is a family business that has been active in the field of agricultural and industrial packaging for more than 85 years. The company started out as a trading house selling jute bags, which were the primary packaging

material for a large variety of products, such as grain, flour, coal and potatoes. After the Second World

War, other packaging materials were introduced, first paper and later plastics, and in the 1960s NNZ started to manufacture its own plastic packaging. Although the firm had its roots in the agricultural sector, it also started to

sell to industry. In the 1990s, both trading and manufacturing demanded substantial investment and management made the strategic decision to focus on trading and outsource manufacturing. NNZinvested primarily in growth by acquiring small local firms. Around 2000, the firm decided to consolidate its acquisitions by streamlining its

operations, creating several new departments and building the corporate brand. In 2010, NNZhas grown into a company with 160 employees and 18 offices in 12 countries. The company has its headquarters in the northern part of the Netherlands, with branches in Europe, the US and Canada. Annual sales are approximately %100 million, 90 per cent of which is still realised in the agricultural sector. Products NNZ offers its agricultural and industrial customers a wide range of products. Agricultural customers require just-in-time deliveries, freshness, efficiency and responsible use of raw materials. Agricultural customers are served with products such as films, trays, net packaging, bio packaging, paper and cardboard packaging, P sacks, jute bags, flexible bulk containers, transit packaging and various accessories (such as labels, clipping wire, strapping, seals and buckles).

Industrial markets arefaced with the challenges of increasing scale, globalisation, cost control, quality

demands and limited stock. These customers are served with a range of flexible bulk containers, paper bags, PE packaging, PP sacks and bags and transit packaging. NNZ and innovation Even though NNZ is a trading company, it does have a Marketing and Innovation department. NNZ always believed very strongly in innovation and

formulated the goal of introducing at least two new packaging per year.

Marketing and Innovation collects factual information about markets, products, raw materials, packaging through its line of kopack products, made from renewable resources such as potato and corn starch. NNZ also uses the latest technologies to reduce the materials used in the production of packaging while maintaining or even improving their properties. Other innovations focus on improving the functional characteristics of packaging for consumers, such as better product protection, hygiene, convenience, presentation and shelf life. Introducing concept packaging The most recent development concerns the development of concept packaging. In the automotive industry it is common practice to develop concept cars: prototypes that showcase the latest features and technologies. In 2008, during a brainstorming session someone suggested borrowing this idea and developing

concept packaging that shows the future of packaging. The basic idea is as follows: 'Over millions of years nature has perfected systems to package and protect its living organisms. What can we learn from her and can we mimic her designs to come up with the best possible packaging for various natural products?'1 Fruit peel and potato skins are designed to protect fruit and potatoes. Similarly, NNZ thought it could imitate nature's packaging techniques (biomimetic packaging) to develop packaging that protects products from threats such as mechanical damage,

dehydration, oxidation, greening, premature sprouting of tubers, bacterial and fungal infections and premature (over-)ripening of fruit. In addition, it should regulate gas exchange, indicate the ripeness or freshness of the product (for instance, through a series of colored dots, similar to the battery indicator on a mobile phone), allow the product to be visible, but at the same time protect it from the influence of light. This concept is illustrated in the nearby figure for a film. The outer, water- and gas-permeable layer (1) is filled with various aromas (for

instance, the smell of strawberries) that are released when the customer grabs or opens the packaging. In

the case of strawberries, the sweet smell of the packaging will also reduce the consumer's need for sugar in the packaged strawberries, which results in a healthier final product. The inner, water-impermeable layer (3), connected with glue (2) to the outer layer, is filled with essential oils that limit the growth of micro-organisms; for

instance, carvacrol from oregano protects potatoes. Measured diffusion of essential. oils from the bubbles of the inner layer slows down spoiling of the packaged product.

Pores in the packaging (4), filled with hydrophobic grains,allow the exchange of oxygen, carbon dioxide and water vapour, but prevent the transport of liquid water. It took NNZ four months to develop the concept packaging, which

was introduced to great acclaim and interest during Fruitlogistica in February 2009. NNZ has contacted a business partner who is able to manufacture the developed innovative film and hopes to conduct the first tests with a finished product within two years.

Questions

1 Which criteria might NNZ use to select the first application to be tested?

2 Since NNZ is a trading company, it relies on business partners for manufacturing.

List a number of criteria that NNZ could use in selecting suitable manufacturing

partners for this new product.

3 While NNZ decided in the 1990s to outsource all manufacturing to strategic partners, there may be circumstances that make manufacturing of this product attractive. Discuss the advantages and disadvantages of bot outsourcing manufacturing to partners and manufacturing the new packaging

themselves.

4 Should NNZ stick to its outsourcing strategy for this innovative new packaging? What are the main reasons that would cause NNZ to start manufacturing the new packaging?

5 What are potential barriers that may prevent or limit the new packaging's success?

6 Develop a concept packaging strategy for NNZ that describes the key activities and decisions for the next five years.