PACKAGING INDUSTRY UPDATES BUYERS SHOULD KNOW
Just as the light at the end of the pandemic begins to shine, the global political climate, paper supply and production capacity are causing major upheavals for all things packaging. Luckily, this is when our team excels – finding solutions to the most challenging of problems.
Continue reading for the latest factors affecting supply chains that all packaging buyers should be aware of in the months to come.
WHAT'S HAPPENING WITH PAPER BAGS & SUPPLY CHAINS?
ISSUE #1: PAPER PRICE INCREASES & WHITE KRAFT DISCONTINUATIONS
Over the past few weeks, the cost of US-made paper has increased across the board. This is normal in our industry for occasional price adjustments, but what is causing waves is the cost of recycled white kraft paper, which has skyrocketed. As a result, many domestic paper bag manufacturers have made the decision to discontinue use of 40% PCW white kraft in lieu of virgin white kraft, with production cut-off dates starting as soon as April 1st, 2022. Some factories are even eliminating FSC certification for white kraft papers.
This is a major deal for retailers and restaurants who have locations that are subject to bag ban legislation (requiring a minimum of 40% PCW) or a general commitment to sustainability.
WHAT WE RECOMMEND:
- Option 1: Alter your bag design to be printed on recycled natural (brown) kraft. This option not only saves you money on the cost of the paper itself, but it boosts your sustainability metrics by allowing for more recycled content in your bags.
- Option 2: Change up your bag style. Still interested in keeping US production without disrupting your brand look & feel? Follow in the footsteps of companies such as West Elm, Nautica, Hilton, Eataly, and Walmart who are opting for a new style of bag made here in the US. The factory specializing in this bag still carries 40% PCW white kraft paper and has production capacity available.
- Option 3: Consider shifting your manufacturing overseas. Yes, the wait can be longer, but the growing demand on US factories has created longer than normal domestic lead times, shortening the difference between the two options. Even with the cost of shipping, this option can be competitive and would allow you to keep a recycled white kraft bag.
If your current paper bag program utilizes recycled white kraft, contact us today to discuss your options. We’d be happy to discuss the pros and cons with you and get you on the right path!
ISSUE #2: THE UKRAINE SITUATION
Russia’s invasion of the Ukraine has been weighing heavily on our hearts and minds. As the situation has escalated, we have been tracking the potential fall-out for our customers. One issue we are tracking is the price of oil (with Russia being the #3 producer in the world). The Wall Street Journal predicts the biggest immediate supply chain-related impact to be on ocean shipping. We are also anticipating the cost of resin to increase as well.
With that in mind, we encourage you to plan ahead. This could mean ordering more product, expediting releases, or revisiting your packaging materials and manufacturing supply chain altogether. Our team is ready to talk through the solutions that work best for you.
LET’S GET TO WORK
No matter what challenges lie ahead, our team has the resources and sourcing expertise you need to ensure your packaging is in good hands, from development to delivery. Contact us today!