Many millions of food products today come packed in a tray with a cardboard sleeve/wrap. Our machine replaces the cardboard with a film sleeve, applied automatically, saving money and waste.
We believe there are technical and food hygiene drawbacks to all the current packaging solutions for tray-packaged products. For example products with stick on labels cannot be placed into microwaves without removing the label.
Our system would give food manufacturer/packagers what we feel to be very substantial savings in production costs. Plus savings on transport/storage costs and waste taxes, and labour cost savings (at present, most card sleeves are manually fitted).
Substantial accomplishments to date
The practical deliverability and cost efficiency of Flexowrap have been independently confirmed by a report commissioned by the Waitrose supermarket in spring 2012. In September 2012 a senior executive from Waitrose announced at a packaging industry event that Waitrose were ‘committed to’ trials aimed at adopting the Flexowrap system across their ready meals range, beginning with their Essential Waitrose (“value”) range. We have a video that shows our first production model in operation.
Our current Flexowrap sleeving machine is aimed at the “ready meals” market. Further variants of the machine would be developed for other sectors of the food packaging market, such as meat and dairy products.
Our business model is multi-tiered, with primary revenues from the manufacture and sale of machines PLUS secondary user licence revenue derived from the cost savings the system offers to the supply chain.
Use of proceeds
We are seeking an investment of £50,000. The funding would be used to:
(i) to complete production of further Flexowrap 401 machines;
(ii) to create a stock of up to 3 additional machines to allow us to get more customers trialing the system, then ordering machines and
(iii) to begin the design & manufacture of a second generation Flexowrap machine.
Flexowrap has already
(i) received interest or enthusiasm from all the main UK supermarkets;
(ii) secured clear interest from several major food manufacturers and
(iii) held serious discussions on cross-marketing arrangements with several large packaging and film print suppliers.
Large customers for our machines could include names like Kerry Foods, HJ Heinz, Bakkavor, Quorn, Samworths, Oscar Mayer/Ferndale. We have had early inquiries from Europe, and estimate the non-UK market to have significant potential for the company.
Characteristics of target market
The UK ready meals market is valued at £1.85bn in 2011, up 6.6% on 2010. According to Mintel, seven in ten UK consumers use ready meals.
We believe producers face significant cost pressures from the power of the supermarkets, creating a need to reduce packaging, environmental, storage and transport costs. The UK ready meal market is forecast to grow by 35.2% between 2012 and 2016 to a value of £2.71bn. We feel the markets for packaged products from the meat, dairy, multi-pack and fruit & vegetable sectors are each greater in value than ready meals – and the Flexowrap solution could be easily extended to the supply chain in those sectors.
Estimates by an independent research company show a single Flexowrap machine creates annual savings up to £160,000 compared to card sleeving.
The next step would be to fund production trials with ‘early adopter’ food manufacturers as possible, with support from a retail brand and a printed film supplier. Given the capital cost of each machine we are not yet able to meet the demand for trials, nor to continue to produce machines ready to satisfy resulting orders. This is where the additional investment would be used.
We are not aware of any other machine capable of delivering a reliable automated film sleeve wrap for tray-packed food products. Some machines offer traditional food labelling - predominately using paper labels or more recent so-called ‘stick-on’ (“linerless”) labels.
We believe that the average cost of linerless labels (material, print etc) is significantly more than Flexowrap film sleeving. We therefore estimate the potential market for Flexowrap machines in the UK to be at least the same size as that currently using card/paper, as the cost savings would impel manufacturers to transit across to our technology.