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2022

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How to deal with the opportunities and challenges faced by carton factory


In recent years, corrugated packaging manufacturers have been actively taking advantage of e-commerce trends to develop their business, but the outbreak of the epidemic has prompted them to get more substantial development. The forced closure of brick-and-mortar stores in the past year, coupled with consumers' continued concern for personal safety during the pandemic, has led to a massive shift to online purchases, which means that e-commerce sales have been booming. Therefore, carton packaging manufacturers are required to provide the amount of packaging required to ship products to stores and consumers is also increasing.

In recent years, corrugated packaging manufacturers have been actively taking advantage of e-commerce trends to develop their business, but the outbreak of the epidemic has prompted them to get more substantial development.

The forced closure of brick-and-mortar stores in the past year, coupled with consumers' continued concern for personal safety during the pandemic, has led to a massive shift to online purchases, which means that e-commerce sales have been booming. Therefore, carton packaging manufacturers are required to provide the amount of packaging required to ship products to stores and consumers is also increasing.

Ron Sasin, head of retail packaging consulting firm Hudson Windsor, points out that the increase in demand is not caused by the outbreak alone. As early as 2018 and 2019, the e-commerce commodity channel has achieved rapid development. "Large retailers are predicting a lot of growth in the future of e-commerce, so they are working hard to ensure that their logistics centers, delivery systems and supply chains can be matched to finally achieve this goal."

Sasin said the corrugated box industry has performed well. He said: "In the future, there will be greater growth in e-commerce, which will cultivate a larger carton packaging market. We have no doubt about this." Of course, it is important to note that this growth has been exponential over this particular year.

How Carton Packaging Manufacturers Are Affected

In 2020 financial results, Sasin said, Walmart, Amazon, Target and Kroger all reported that in e-commerce sales, they achieved results equivalent to the previous three years in 3/4 of last year. "We found that some of these companies are experiencing annual economic growth of about 70 percent, and Target's performance reports point to sales growth of more than 100 percent."

When the new crown virus first appeared, there were concerns that it would have a negative impact on the demand for products and services of carton packaging manufacturers. Such fears have proved to be largely unfounded. As Justin Stacey, vice president of e-commerce at Fantastapack, noted, "By April-June last year, the industry's concerns about sales performance had dissipated and were replaced by a wave of market demand. The rapid growth in sales in the third and fourth quarters of 2020 created a lot of opportunities for us to take advantage of this growth and implement many untested processes."

Stacey said the pandemic has led to increased demand for digitally printed packaging in the market as brands are forced to turn to e-commerce to stay afloat. "This wave of demand has created constraints in terms of supply chain, product yield and delivery time," he said." This demand not only affects carton packaging manufacturers, but also affects upstream equipment and service providers.

Unexpected obstacles and challenges, and new opportunities

Sharon Cessler is the marketing manager for the industrial corrugated box division of Hewlett-Packard PageWide. "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 it is not the only factor. In general, customer demand for HP digital printing equipment has increased, because when the traditional printing business cannot continue, HP digital printing technology has shown extremely resilient power."

The surge in market demand has also led to longer delivery times, Stacey said. In Fantastapack, he said, "we 've been educating our customer base that longer delivery times are now the new normal." In addition, Fantastapack have invested heavily in plant capacity and expanding locations to meet the growth in demand. We installed the first laser die-cutting processing equipment from Haike, with the purpose of greatly increasing the order capacity. We have also acquired a digital printing company and will break ground with them on a new building that will double our operating output by the second half of 2021."

Rapid continuous improvement has become a way of life. This is necessary both to address emerging challenges and to take advantage of new opportunities. E-commerce creates opportunities for companies to reinvent themselves, rather than shut down. Stacey said: "We have launched some new products for e-commerce sales, which are directly aimed at the current market environment."

Cessler points out that unpacking experience has also become increasingly important during the pandemic, which provides an opportunity for manufacturers to make high-quality corrugated packaging. "Consumers will appreciate the unpacking experience when ordering carton packaging products online, and ordinary brown cartons have become a marketing tool for companies to promote themselves and provide more side-value sales products. Personalization and customization have become part of the e-commerce business, and seasonal products, etc., are available through digital printing technology."

Sasin pointed out that the goods people order have also changed, thereby increasing the demand for carton packaging products. "There is a very important difference between what we used to buy in e-commerce and what we buy now. Previously, what we bought was usually higher value goods and high-density products. They were DVD sets, expensive books and the like. Whatever we bought, although expensive, was very easy to transport and not affected by transportation damage." He said, for example, ordering a pair of shoes on the Internet does not pose a great risk of product damage.

But that's not the case with the groceries, health and beauty products consumers buy online today. Sasin said that the price of buying these things tends to be lower, but the items are larger and may end up paying $100 for groceries, which requires more geometric space than spending the same $100 on three books." It's not just that consumers are buying more goods, it's that they're buying goods in different ways. "The difference is the driving force behind all these additional markets," Sasin said."

03, how companies should respond

Sasin sees the industry as a whole responding well to new challenges and growing demand. In part, this is because many have made investments and process improvements to address the increased demand that had been predicted before the pandemic.

Cesler said that by 2020, the carton standards industry has fully understood the new opportunities of corrugated digital printing technology, emphasized the need for strict safety, and encouraged the implementation of sustainability measures in every step of the manufacturing process." HP is focused on developing innovative and sustainable technologies for printing presses, and their customers are focused on growing their business despite the challenges posed by the new crown epidemic.

To meet demand, Stacey said, requires "service speeds not available in the traditional analog packaging world". In addition to expanding factory capacity, the Fantastapack has invested heavily in automation to speed up the front-end procurement and back-end production processes, allowing the company to scale new customers and the number of orders it receives, but the process is challenging. "Digital presses and die-cutting machines have a maximum speed limit and only 24 hours a day, whether you are a brand or a supplier, it is important that we all understand the problem from the root and acknowledge that the challenge has emerged in unforeseen ways."

His advice: "Be nice to each other and be compassionate when we are aware of supply chain disruptions, overcapacity and waves of demand, which have made delivery times beyond what we were previously used to with outbreaks. There is a new normal in the market, and your business plan really needs to take that into account." Even if concerns about the outbreak recede, the new normal is likely to move on.

04 What the Future Will Be

Cesler believes that the development of e-commerce is a trend that has just begun. She said: "Many processors have begun to provide online packaging ordering services to small and medium-sized, and even large-scale companies that compete in the e-commerce field to reduce costs and serve brands."

Stacy agrees. "We are confident that, directly or through our trading partnerships, e-commerce packaging will continue to be our largest growth area. All indications are that this trend will continue to be adopted rapidly," he said." The only thing that will slow them down, he said, is the limitation of market capacity.

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

Data and analytics are key to understanding when these changes are taking place, it's too late to be at the forefront of this digital revolution, but see how market leaders are addressing these challenges without fear of following their lead. E-commerce is not going to go away, so businesses should move their operations toward capturing the changing needs of their customers. Automation efficiency is the real key to maintaining this growing demand. For carton packaging manufacturers, 2021 is likely to be another iconic year.

Keywords: printing machine