Benjamin Franklin said
“By failing to prepare you are preparing to fail.”
Wise words indeed from the founding father of America. As a manufacturer of corrugated boxes for over 40 years, we have learnt how to maintain consistency and a steady supply through challenging periods – albeit with extreme difficulty. One of the most important pieces of advice we impart on our customers, our teams (across our 3 UK sites) and our suppliers is the importance of being prepared.
But how can any of us be prepared if we don’t know what to prepare for? After everything the previous twelve months has thrown at us – Coronavirus, Brexit, and a wedged-in container ship in the Suez Canal – will there be any chance of a return to some sort of normality?
We’ve compiled this Blog with information we’ve read from industry leaders and commentary from our own directors’ expertise, to help you prepare for the next 6 months.
1. Increase in Demand + World Pandemic = Supply Disruption to Raw Materials
COVID-19 caused a huge amount of disruption in 2020. And although it created uncertainty in the UK economy, it actually led to an unprecedented surge in demand for corrugated packaging.
Unfortunately, the consequence of this, combined with supply problems resulted in a shortage of raw materials. Manufacturers were (and in some cases still are) being quoted up to an 8 week lead time by corrugated mills for the delivery of sheet board!
Frustratingly, this had a knock on effect and gave packaging manufacturers’ additional challenges; supplying orders in good time, managing the fulfilment of orders and, managing their own productivity.
2.Material shortages leads to price increases
Economics dictates the rules of supply and demand:
less material available + demand increasing = an increase in costs
At the end of 2020 paper mills across Europe and the UK announced they would be increasing prices. While we were able to absorb some of the cost, our customers inevitably, and regrettably were affected by these increases.
3. A Focus on Intelligent Packaging Solutions
As the price of corrugated packaging increases, streamlining packaging to minimise material usages and, therefore costs is high on the agenda. This has the potential for environmental benefits too.
A few years ago, we saw the value of providing customers with their own packaging design team. The practice has become invaluable. Our Technical Design team will analyse your packaging and look for ways to improve it.
Working directly with a manufacturer who is able to offer innovative designs, ensures that your packaging can be made to work much harder. Bulky, inefficient packaging will make way for streamlined designs that minimise material usage (and therefore costs).
4. Shift to online sales continues
We all knew it was happening and we’ve all been eCommerce customers ourselves. However, there’s no mistaking that the shift to eCommerce was accelerated considerably by the Coronavirus pandemic. eCommerce sales have soared beyond all expectations.
Corrugated packaging plays a massive role in this sector for a number of steps along the eCommerce journey. The beautifully designed branded box to house the product, the delivery and / or postal packaging of that product and the ability to Stock & Serve for just in time orders. We saw existing businesses ramping up their efforts, new businesses entering the eCommerce space and others seriously revaluating their current packs for the first time.
It’s a double edged sword for us. This surge has ultimately meant higher demand for corrugated packaging, which looks set to continue to grow to the end of the year and beyond, but we desperately need to see an end to material shortages!
5.Print and presentation has become more important
Earlier in the year we wrote about never getting a second chance to make a first impression. As clichéd as that sounds, it’s so true.
eCommerce packaging is in many cases the first physical interaction in which consumers will see the business or brand.
At Reedbut, our boxes can be printed both inside and out or simply be plain & discrete; the packaging itself will ensure the final customer enjoys the WOW factor as they open their box. Consequently, there’s an increased focus on print quality and graphic design relating to eCommerce packaging.
Customers’ competitors are looking to gain an advantage and deliver the WOW factor in the “unboxing experience”. The aim will be to surprise and delight customers when they receive their items, cement brand loyalty and generate new customers through recommendation via the power of social media.
6.Thinking out the Box to Solve Fulfilment Pressures
The surge in demand for eCommerce has not only put pressure on packaging supplies, the fulfilment sector has been impacted too. Talking to our friends in this sector, consumers are placing higher volumes of orders and expect next or even same day delivery.
Consequently, fulfilment companies are looking for easy assembly packs and custom sized packaging to avoid the need for fillers and a slowdown of the packing process.
Suspension fittings and divisions also provide simple and effective cushioning for the fulfilment of fragile, delicate and expensive items such as ceramics, glassware, and valuable electronics.
7. Economic Performance Factors
The performance of the economy heavily influences the packaging market.
This was seen clearly after the economic crash back in 2008. If consumers are buying fewer goods, manufacturers are producing less and general activity is declining, then the volumes of packaging required will also drop.
However, despite COVID-19 creating the biggest drop-in economic activity in the UK for hundreds of years, the packaging market has remained buoyant due to the surge in eCommerce, and, economic stimulus from the chancellor.
The great unknown is the longer-term effects of Brexit on the economy and how raw material prices will fare.
8. Environmental considerations to remain a strong factor
Over the years, we’ve observed that environmental considerations tend to be less prominent during times of economic hardship, and when times are good, it moves up the agenda again.
But not this time…
Even with everything else that has happened, environmental concerns remain much more of a focus across our customer base and the industry in general.
We switched to 100% FSC certified raw materials some years ago which has further endorsed our offering and persuades more customers to make the switch from plastics to corrugated materials. Customers like to communicate their green choice. Another key trend we can implement is the use of white and green inks on brown material to demonstrate these environmental credentials.
It’s been interesting! Although “turbulent” could best describe our personal and business lives since 2020, there is some hope that things will return to something approaching normal for the packaging industry.
Time will tell if the surge in eCommerce continues to grow, plateau or fall and whether the challenge of purchasing raw materials will reduce.
Key Take Outs
Hopefully this blog will go some way to help you prepare. The key take out is simply – BE PREPARED! For example, are you “box ready” for the forthcoming key events of 2021 – Black Friday, Cyber Monday and of course, Christmas? Do you need to order now and utilise our Stock & Serve facility for storage and just in time orders, particularly if your own storage space isn’t enough to meet demand?
The Reedbut Group is here to take your enquiry or order and just remember what Benjamin Franklin said:
“By failing to prepare you are failing to fail.”