With the demise of glass manufacturing for the perfumery in the UK, many suppliers now act as agents and concentrate on the secondary processes. Michael Herson of the Strategy Works has spoken to some of those affected.

Recent years have seen a shift in buying power by the major branded perfumery houses away from the UK and towards Paris and New York. "Avon, Elizabeth Arden, Estée Lauder, L'Oréal - most of the decision taking - if not all - is taken outside the UK", says Stölzle Flacconage's sales and marketing director, Neil Robson.

Perhaps as a result, Stölzle Flacconage is the only glass manufacturer in the cosmetics sector left in the UK, after Waterstone went into receivership in early February. Most of the companies that previously manufactured for the cosmetics houses now act as distributors or agents for the major glass manufacturers in Europe. And they tend to serve the own label brands owned by the major supermarkets, drug store chains or new brands such as Virgin.

The growth areas for such companies are toiletries and aromatherapy products, and the distributors have therefore forged stronger relationships with the contract manufacturers who develop the new products on behalf of the major retailers. However, it is the contract packer that acts as the main conduit to the retailer within the three-way relationships that subsequently evolves.

One such glass packaging distributor is Roma International. Managing director Stephen Excell says that the new business environment means that proactivity is more important than ever. "Our particular strength is looking around, being prepared to spend money on an idea and take it to the marketplace in model form", he says. Excell also believes that it is important to offer the one stop shop: "anything from developing the tool through to decorating", he says. Roma, which has a turnover of just under £10m, built a plastics plant in 1997 - now a key part of its growth strategy - and is currently looking to double capacity.

Excell confirms the importance of the relationship with contract packers. "Our main strength is through the likes of Peter Black, Lorien Dewhirst and Julius Meller, rather than the retailers", he explains. He admits that his customer base has shrunk, saying "Our core business is probably 25 customers, in terms of the major players". Because buying decisions are now so concentrated, none of the distributors need a large sales force - Roma has just two full time field salesmen, while Stölzle has three.

But if the customer base is shrinking, the number of launches and rapid product turnover are helping to maintain sales volume. Robson says that product lifecycles now average about two or three years. This means that trends move very quickly and consequently Stölzle makes a point of keeping in close contact with the design and packaging development engineers of its clients, Boots and The Body Shop.

But because the product lifecycle is briefer, orders tend to be smaller. Fully automatic bespoke production is not economical below runs of 50,000, and with only a handful of semi-automatic manufacturers left in the world, demand for smaller quantities has tended to switch to stock items produced fully automatically, which are then differentiated by the cap or the decoration.

This is where the distributors can come into their own. Many are linked to one particular European supplier. Roma, for example, is linked to Saint Gobain Desjonquères (SGD), although it will source from other companies where required, and has access to SGD's extensive stock lines. This also allows it to fulfil smaller orders. The Stride Group has links with Bormioli Rocco and Wisthoff, while the International Bottle Company (IBC) has a strong relationship with Dutch glass group NVM.

The SGD connection has helped Roma move away from its traditional base of nail polish bottles and colour cosmetics and into the aromatherapy market. Stride has also moved into new product areas through its strong relationships with contract packers such as Potter & Moore, Burlington Toiletries, Swallowfield and Julius Meller. "Two years ago, I would not have predicted the substantial volume of orders for room fragrances", says sales manager, Humphrey Lattin. "The first range we supplied was for Tesco, but most of the retail groups have now developed home fragrance products. It's a completely new growth area".


EXTRA INVESTMENT

With competition fiercer than ever, the UK companies are under pressure to offer as complete a service as possible. Some now offer turnkey management for both home and export markets as buyers seek a single supplier for an entire pack. "We recognise that, as the market changes, we need to be even more flexible in the solutions we offer", says Lattin. "That's why we continue to work as closely as possible with our customers to ensure we provide exactly what they want, not just what we have available".

Stride offers a one stop shop solution via its multiscreen plant in Yorkshire. Here, it can supply a wide range of printing and decorating options, including colour-coating and frosting, to turn a standard bottle into a complete pack, with caps, valves and pumps also supplied.

IBC says it takes an active role in establishing design trends through product development and its design department. The company has a substantial decorating business in the UK, with three factories including a screen printing factory. In total, it has nine fully automatic machines with multicolour capability, as well as semi-automatic machines.

Ceramic decoration adds value to any design concept or product range, providing a quality finish which is instantly recognisable. According to IBC's joint md, Mark Devonald Smith, the company's ability to provide product design and quality ceramic decoration, within an ever widening standard range, enables it to maintain a competitive advantage in the marketplace.

Stölzle Flacconage, now a division of the Stölzle Oberglass Group, owns five manufacturing sites in Europe. Robson says that fully automatic manufacturers like Stölzle have side-stepped the need to have semi-automatic facilities. "There's a lot of growth in the use of standard containers which are secondary processed or presented in various different ways so that they don't appear to be standard. They are sprayed organically or ceramically and decorated in different ways, in some cases acid etched". If they require a smaller, semi-automatic run, Stölzle has those facilities through its parent company in Austria.

The company is said to have one of the most advanced decoration facilities in the industry, with 18 semi-automatic silkscreen printers, three tampo machines, a six-colour automatic printer, ceramic and organic spraying and powder coating, plus transfer application. Stölzle has also invested in a £750,000 fully automatic acid etching plant, Euro-Etch - advanced technology that has extended its decoration capability still further. It can also produce almost any colour of glass with its forehearth colouring process, which creates special colours without needing to fully convert the furnace. In a market that has undergone change, European original equipment manufacturers now have very little direct sales representation left in the UK. Most have closed or downsized their UK offices and rely very much on the preferred relationships they have established with their distributors, who in turn reach their retail customers by working through the contract manufacturers. The UK cosmetics glass industry may have had to renvent itself, but it is clearly buoyant.

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