Tetra Pak offers innovative packaging solutions

Chris Kenneally, president of Tetra Pak Korea / Courtesy of Tetra Pak Korea

Head of Korean operation

says ‘hallyu’ makes

local foods and beverages

popular in Asia

By Lee Hyo-sik

Tetra Pak, one of the world’s leading food processing and packaging solution providers, has established a strong presence in Korea over the past three decades by forging a strong partnership with local food producers. The company provides beverage and dairy firms with a variety of safe, innovative and environmentally-sound products to enable them to meet the rapidly-changing needs of Korean consumers.

Tetra Pak, headquartered in Switzerland, has recently begun offering state-of-the-art aseptic packaging solutions to Korean firms that export milk, juice and other beverage products to China, Japan and Southeast Asia. “Hallyu,” or the Korean cultural wave, has helped boost the consumption of made-in-Korea food and beverage products in recent years.

In an interview with The Korea Times’ Business Focus, Chris Kenneally, president of Tetra Pak Korea, said hallyu has created lucrative business opportunities abroad for Korea’s food and beverage producers, stressing that his company can help ensure the safety of export products.

“The outlook for the country’s food and beverage industries is bright. In particular, there is a tremendous opportunity for many Korean companies in China as hallyu has a large audience there who are looking to purchase Korean products,” said Kenneally, who came to Korea in June 2012. “Opportunities exist across multiple categories, including food and beverages. I think our aseptic packaging plays a key role in increasing the competitiveness of our Korean customers, enabling them to export large volumes and cover broader geographies.”

Binggrae, a major confectionary firm, recently began shipping its best-selling product “Banana Milk” to China, thanks to Tetra Pak’s aseptic drink packaging. Earlier, Jeonju Makgeolli, a small makgeolli producer, began exporting Korea’s traditional rice wine to Japan, also using Tetra Pak’s aseptic packaging.

Tetra Pak employees plant a tree in Cheorwon, Gangwon Province, during the company’s Eco-Tree campaign on March 28, 2013.

The Australian native also said the emergence of the middle-class in the developing world has presented enormous opportunities for Korean food makers.

“We have seen the rise of the middle class in countries where the middle class did not previously exist. This brings a new consumer group that will spend more money to buy high-quality food and beverage products,” Kenneally said in his office in Itaewon. this regard, Korea has made the right move to create a large-scale food industry cluster by 2015 in order to tap into the growing middle-class in China and other parts of Asia. The so-called K-food will continue to receive a growing international spotlight.”

Long-term commitment to Korea

Tetra Pak opened its Korea office in 1983. The company provides packaging solutions to 22 local firms, including Dr. Chung’s Food, Maeil Dairies Products, Yonsei Milk, Namyang Dairy, Lotte Chilsung Beverage, Seoul Milk, Dongwon F&B and Korea Yakult. It also helps 150 food and beverage producers improve their processing procedures.

Tetra Pak opened a plant in 1988 in Yeoju, Gyeonggi Province, but closed it in 2007 due to a militant labor union. It currently employs 65 people and operates a technical service center in Icheon, Gyeonggi Province.

“Under the motto of ‘Protect What’s Good,’ Tetra Pak has been operating in Korea for over 30 years. We celebrated our 30th anniversary last year,” Kenneally said. “Our long history here suggests that we have been able to achieve sustainable growth over that period of time. We have been fortunate to do business with leading Korean beverage and dairy customers. Tetra Pak is here for the long term.”

Its revenue grew 7 percent in 2013 from the previous year, according to Kenneally, but he refused to provide a sales figure.

Tetra Pak employees participate in the company’s Eco-Love campaign in western Seoul, on Sept. 10, 2013. It organized the event to raise public awareness in the importance of environmental protection.

The company provides beverage and dairy firms with many solutions, ranging from packaging materials to processing systems, and technical and marketing support, the president said. “We have many competitors in our fields. No matter how fierce the competition may get, what we are trying to achieve is to provide the best possible products at the best possible price at the right time. We will always work closely with our customers and strive to be customer-oriented.”

He said Tetra Pak’s aseptic technologies, which went into use in the 1960s, ensure that foods and packaging materials are free of harmful bacteria, making it possible for foods to be kept for many months without the need for preservatives or refrigeration.

Since Tetra Pak does not have a plant in Korea, it brings in all the packaging products from plants in China, Japan and other countries.

“We don’t have a packaging material factory in Korea as part of our global supply chain strategy. We have 42 strategically located production sites around the world. Where we source from varies, depending on what is the best solution for each individual customer. We believe that having a range of sourcing options actually helps serve Korean customers better,” Kenneally said, indicating that the company has no plan to open another plant in Korea.

Some beverage packaging products manufactured by Tetra Pak / Courtesy of Tetra Pak Korea

Changing business environment

The president said the food and beverage industries are undergoing rapid changes in accordance with consumer preferences and social trends, adding that Tetra Pak has been working closely with its customers to develop next-generation packaging and processing technologies.

“I often say ‘change is a constant.’ It is particularly so in Korea amid the rapid population aging, the increasing health awareness and the food-on-the-go trend. We are ready to embrace these and other changes taking place in the country,” Kenneally said. “We operate in over 170 countries, and have eight product development centers specializing in a range of specific categories and technology development. This global network of expertise enables us to bring new ideas from around the world in order to tap into emerging trends in the local market.”

The company’s major focus here is to help food and beverage makers capture shares in Korea’s rapidly growing on-the-go market, which is the second-largest after Japan’s, according to Kenneally.

“One of our innovative products is the Tetra Prisma Aseptic DreamCap packaging, designed to be the best on-the-go packaging for busy Korean consumers. Households are becoming smaller so we are very focused on developing packaging for single-member households that has the right combination of functional attributes such as enhanced handling, pouring, resealing and storing,” he said.

The aging population is another trend in Korea, although not unique to the nation, Kenneally said, adding that this creates an opportunity for Tetra Pak to be the first to develop products to satisfy the needs of an increasing number of senior consumers. matter what changes occur, I think as long as we move fast to capitalize on the trends and work with our customers in developing the right products for consumers, we will continue to have opportunities for growth in Korea.”

The company also has an innovative processing business, the president said, adding that it has introduced leading processing systems to the Korean market, such as ultra-high-temperature plants for dairy and beverage products, and advanced infant formula processing solutions, to increase productivity, utility savings and food safety.

“In 2013, we installed a new ice cream cake production line here for Baskin Robbins, which is the most advanced ice cream cake production technology. This shows that we leverage our expertise to offer our customers the best solutions. We grow as our customers grow,” Kenneally said.

Open communication and active in CSR

The president stressed the importance of open communication among all members of Tetra Pak Korea.

“Open communication is the key to our organization. To promote it, we hold a companywide event on a regular basis to ensure all employees are on the same page. Each of the functional units, such as marketing, sales, technical services, human resources and finance, talk about what we need to execute to achieve our goals,” Kenneally said. “The important thing is to know how we work together as one and how we work together with our customers.”

He then said Tetra Pak has a significantly low turnover rate, averaging 3 to 4 percent in recent years. “I believe that the figures are lower than the industry average. This shows what our corporate culture represents. Tetra Pak has a culture that fosters loyalty and promotes high levels of customer engagement.”

To become part of local communities, Tetra Pak has been implementing a wide range of corporate social responsibility (CSR) activities over the years.

The company has been focusing on two areas of community engagement; organizing educational programs on environment protection for students and addressing the concerns of working mothers.

“In cooperation with Seoul City, we initiated a campaign in 2013 to turn the capital city into a leading environmentally-friendly one. To do so, our employees have been collecting used beverage packaging, and raising awareness of recycling and climate change in local communities, among others,” Kenneally said. “We also organized a summer student camp to nurture Korea’s next-generation leaders with a strong environmental mindset, as well as launched the ‘Eco Love” campaign to educate the general public.”

The company has also partnered with nongovernmental organizations to increase the quality of life for married women and young girls.

“We are working with civic organizations to address the concerns of working mothers and young women facing financial difficulties. Tetra Pak will continue to actively engage in the community to help improve the livelihoods of the underprivileged,” the president said.