Lubricant Packaging Sells; What the Lubricant is in Can Be More Important Than What is in the Lubricant
21 December 2000
Lubricant Packaging Sells; What the Lubricant is in Can Be More Important Than What is in the Lubricant
LITTLE FALLS, N.J., Dec. 21 While e-commerce, GF-3, PC-9,
hydrocracking, globalization, megamergers, and other "hot" issues are stealing
the spotlight in the lubricants business, packaging is quietly yet very
effectively providing lubricant marketers with a genuine opportunity to gain
market share, improve margins, and grow their business.
According to a study currently being marketed by Kline & Company titled
THE OUTLOOK FOR PACKAGING IN LUBRICANTS, 2000, the rapidly growing importance
of packaging in North America is partly due to the reality that it is
increasingly difficult to differentiate lubricants based on performance.
To understand this paradigm, Thomas F. Glenn, associate with
Kline & Company, notes that "Performance specifications continue to level the
playing field in the lubricants business and challenge marketers to find ways
other than performance claims to differentiate products." It is increasingly
difficult to make meaningful claims about performance advantages in such
products as passenger car motor oil (PCMO) and heavy-duty motor oil (HDMO)
because these products must meet very stringent performance specifications in
order to gain approval from the American Petroleum Institute. Although
blenders can exceed these performance specifications, the costs to do so are
relatively high, and consumers tend to be indifferent to improvements that can
only be realized in laboratory testing and long-term durability.
Performance specifications are also leveling the playing field in such
products as automatic transmission fluid (ATF), hydraulic fluid, gear oil, and
several other industrial lubricants. Like it or not, Glenn says, "Some
segments of the lubricants market are being commoditized, and in these
segments, it is not necessarily about what is in the package that sells
lubricants; rather, it is about the size, shape, color, and what is on the
label that makes the difference." Glenn points to four-color,
consumer-oriented cases; label technology and quality; Quaker State's clear
motor oil bottles; Valvoline's niche marketing to high-mileage vehicles
(MaxLife); Texaco's label makeover; Pennzoil's addition of a silver bottle to
its signature yellow bottles; and others as examples of how packaging alone
can capture market share in motor oil.
In the commercial and industrial market, one needs only to look at the
growing demand for industrial bulk containers (IBCs), multiwall bags, pail
liners, 5-quart jugs, and steel and plastic drums to appreciate the importance
of packaging. In addition, Glenn notes that "Smart packaging choices can
result in reducing the cost of goods sold and improved margins." Most
importantly, he points out that we are really just at the beginning of what
can be done with lubricant packaging, and packaging manufacturers have only
recently started to "think outside of the drum and bottle."
Glenn cautions, however, that it would be wrong to paint too positive a
picture of packaging in the lubricants business. Overall demand for
lubricants in North America is relatively soft, and the industry is facing
several market developments that could have a very significant negative impact
on lubricant demand. Kline's study, THE OUTLOOK FOR PACKAGING IN LUBRICANTS,
2000, will also examine these issues, including fuel cells, extended drains,
hybrids, and others, and their likely impact on the quantity and quality of
bottles, drums, IBCs, and other lubricant packages used in the future.
THE OUTLOOK FOR PACKAGING IN LUBRICANTS, 2000 is designed to provide
subscribers with the information and insights required to capitalize on
packaging trends in the lubricants market and grow their business. According
to Lynn A. Gillette, Sales and Marketing Manager of Kline & Company, "the
study will be a highly valued planning and business development resource for
lubricant marketers, packaging material suppliers, contract blenders, and
others in the lubricants business." The study will examine the following:
* Packaging material suppliers
* Demand for lubricants by package type
* Forecast demand for lubricant to 2005 by package type
* Market development and agents of change influencing demand for packaging
* Business opportunities in lubricant packaging
For information on how to subscribe to this study, contact Lynn Gillette
at Kline & Company, Inc., Overlook at Great Notch, 150 Clove Road, Little
Falls, NJ 07424, at (973) 435-3448, or via e-mail at
Lynn_Gillette@klinegroup.com.