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Surge in demand for carton packaging How to deal with the opportunities and challenges faced by carton factories

  • Categories:Industry News
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  • Time of issue:2022-02-22
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(Summary description)Manufacturers of corrugated packaging have been actively capitalizing on e-commerce trends to grow their businesses in recent years, but the outbreak has spurred them to grow even further. Forced closures of brick-and-mortar stores over the past year, coupled with continued consumer concerns over personal safety during the pandemic, have led to a massive shift to online purchases, meaning e-commerce sales have been booming. As a result, carton packaging manufacturers are also being asked to provide the volume of packaging needed to ship products to stores and consumers.

Surge in demand for carton packaging How to deal with the opportunities and challenges faced by carton factories

(Summary description)Manufacturers of corrugated packaging have been actively capitalizing on e-commerce trends to grow their businesses in recent years, but the outbreak has spurred them to grow even further. Forced closures of brick-and-mortar stores over the past year, coupled with continued consumer concerns over personal safety during the pandemic, have led to a massive shift to online purchases, meaning e-commerce sales have been booming. As a result, carton packaging manufacturers are also being asked to provide the volume of packaging needed to ship products to stores and consumers.

  • Categories:Industry News
  • Author:
  • Origin:
  • Time of issue:2022-02-22
  • Views:0
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Manufacturers of corrugated packaging have been actively capitalizing on e-commerce trends to grow their businesses in recent years, but the outbreak has spurred them to grow even further.

Forced closures of brick-and-mortar stores over the past year, coupled with continued consumer concerns over personal safety during the pandemic, have led to a massive shift to online purchases, meaning e-commerce sales have been booming. As a result, carton packaging manufacturers are also being asked to provide the volume of packaging needed to ship products to stores and consumers.

Ron Sassin, director of retail packaging consultancy Hudson Windsor, pointed out that the increase in demand was not caused by the epidemic alone. Back in 2018 and 2019, the e-commerce merchandise channel has seen rapid growth. “Major retailers are predicting a lot of growth in the future of e-commerce, so they are working hard to make sure their fulfillment centers, delivery systems and supply chains are compatible to eventually make that happen.”

The corrugated box industry is already doing well, Sasin said. He said: "There will be even greater growth in e-commerce in the future, which will foster a larger market for carton packaging, we have no doubts about that." Of course, it is important to point out that in the past this particular one In the middle of the year, this growth has grown exponentially.

01. How are carton packaging manufacturers affected

In their 2020 financial results, Sassin said, Walmart, Amazon, Target and Kroger all reported that they achieved the equivalent of the previous three-quarters of the time last year when it comes to e-commerce sales. year's performance. "We found that some of these businesses had annual economic growth rates of around 70 percent, while Target reported sales growth of over 100 percent."

When the new coronavirus first emerged, there were concerns that it would negatively impact the demand for products and services from carton packaging manufacturers. Such concerns have proven largely unfounded. As Justin Stacey, VP of E-Commerce at Fantastapack points out: “By April-June last year, concerns about sales performance had dissipated and were replaced by a wave of market demand. Q3 and Q4 2020 The rapid growth in sales has created a lot of opportunities for us to take advantage of this growth and implement many processes that have not been load tested."

Stacey said the pandemic has led to increased demand for digitally printed packaging as brands are forced to turn to e-commerce to stay afloat. "This wave of demand has created constraints in supply chain, product output and lead times," he said. This demand has affected not only carton packaging manufacturers, but upstream equipment and service providers as well.

02. Unexpected obstacles and challenges, and new opportunities

Sharon Chesler is the Marketing Manager for HP's PageWide Industrial Corrugated Box Division. "Today, the packaging market is experiencing strong trends across the entire value chain, including consumers, brands and processors," she said. HP's customers are also seeing increased demand for high-graphics corrugated packaging. “E-commerce is the main factor contributing to this growth, but not the only one. Overall, customer demand for HP digital printing equipment has increased, as HP digital printing technology has shown great performance when traditional printing operations cannot continue. Resilient power."

Stacey said the surge in market demand has also led to longer delivery times. At Fantastapack, he said, "We've been educating our customer base, and longer lead times are now the new normal." Additionally, Fantastapack has made significant investments in factory capacity and expanding locations to meet increased demand . We installed the first laser die-cutting equipment from Haike with the aim of greatly increasing the order capacity. We also acquired a digital printing company and will be breaking ground with them on a new building, doubling our operational output by the second half of 2021. "

Rapid continuous improvement has become a way of life. This is necessary both to meet emerging challenges and to take advantage of new opportunities. E-commerce has created opportunities for companies to reinvent themselves, rather than go out of business. "We've launched some new products for e-commerce sales that directly target the current market environment," Stacey said.

Chesler noted that during the pandemic, the unboxing experience has also become more important, creating an opportunity for manufacturers of high-quality corrugated packaging. “Consumers appreciate the unboxing experience when ordering a carton-packed product online, and the plain brown carton becomes a marketing tool for companies to promote themselves and offer more sub-value sales products. Personalization, customization, has become part of the e-commerce business, And seasonal products, etc., are available through digital printing technology.”

Sassin noted that what people order has also changed, increasing the demand for carton-packed products. “There is a very important distinction between what we used to buy in e-commerce and what we buy now. Previously, the purchases were usually higher-value items and high-density products, which were DVD sets, expensive books, etc. Stuff. Whatever we buy, while expensive, is very easy to ship and not subject to shipping damage.” Ordering a pair of shoes on the internet, for example, doesn’t pose a huge risk of product damage, he said.

But that's not the case with the grocery, health and beauty products consumers buy online today. These tend to be less expensive to buy, but larger items can end up costing $100 for groceries, requiring more geometric space than spending the same $100 on three books, Sasin said. "It's not just that consumers are buying more, it's that they're buying differently. Differences are what drives all these additional markets," Sassin said. "

03. How should enterprises respond

Sasin believes that the industry as a whole has responded well to new challenges and increased demand. In part, that's because many have made investments and process improvements to address the increased demand that had been predicted before the pandemic.

Chesler said that by 2020, the carton standards industry has fully understood the new opportunities in digital corrugated printing technology, emphasizing the need for strict security and encouraging sustainability measures at every step of the manufacturing process. "HP is focused on developing innovative and sustainable technologies for printing presses, and despite the challenges posed by the COVID-19 pandemic, their customers remain focused on growing their businesses.

Meeting demand, Stacey said, required "speeds of service not available in the traditional analog packaging world." In addition to expanding factory capacity, Fantastapack has also invested heavily in automation to speed up front-end procurement and back-end production processes, allowing the company to scale new customers, as well as the number of orders received, but the process is challenging . “Digital printing presses and die cutters have a maximum speed limit and there are only 24 hours in a day, whether you are a brand or a supplier, it is important that we all understand the fundamentals of the problem and acknowledge that the challenges have come at an unforeseen level. way to appear."

His advice: “Be kind to each other and be compassionate as we realize supply chain disruptions, overcapacity, and demand waves that are pushing delivery times beyond what we were used to with the pandemic. Normalcy, and your business plan really needs to take that into account.” The new normal is likely to move forward even if fears of the pandemic subside.

04. What will happen in the future

Chesler believes the growth of e-commerce is a nascent trend. "Many processors are starting to offer online packaging ordering services to small and medium-sized, and even large, companies competing in the e-commerce space to reduce costs and serve brands," she said.

Stacey agrees. "We are confident that e-commerce packaging will continue to be our largest growth area, either directly or through our trading partnerships. All indications are that this trend will continue to be adopted rapidly," he said. What they are slowing down is the limitation of market capacity.

As Sassin points out, consumer shopping patterns have changed, and may have changed in the long term. Many consumers in 2020 and early 2021 are beginning to understand how easy it is to buy groceries online, and they won’t be able to buy back immediately just because they can go into a store without a mask sometime this year, but the convenience factor that consumers experience appears to be very important.

Data and analytics are key to understanding when these changes are happening, and it is too late to be at the forefront of this digital revolution, but to see how market leaders are addressing these challenges without being afraid to follow their lead. E-commerce is not going away, so business operations should move toward capturing the changing needs of customers. Automation efficiency is the real key to maintaining this growing demand. 2021 is likely to be another banner year for carton packaging manufacturers.

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