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Forward Focus

By AICC Staff

January 23, 2020

“Ask industry veterans about their outlook for the next 12 months, and you’ll likely hear a wide range of predictions based on their respective markets, products, and company goals. Yet, for 2020, there was a surprising amount of agreement among corrugated, folding carton, and rigid box producers across the country.

Jay Carman, president of StandFast Packaging Group and AICC chairman, says, “We’re positive for the coming year,” summing up the general attitude. “I don’t anticipate a huge jump in business, but we are looking for some steady growth.”

“2020 will be a good year in the corrugated business,” says Greg Tucker, chairman and CEO of Bay Cities, although he believes the year may not take off immediately. “It will start slow through the first quarter, then boom in the next three due to the election-year lift that we should see.”

“I’m not seeing anything earth-shattering on the horizon,” Carman adds. “I don’t see any of the current markets being on the way out. The food and beverage market seems to be pretty strong. And,” he says, “I see continuing growth with e-commerce.”

In that, Carman is not alone.

E-commerce Impact

For many boxmakers, e-commerce will continue to make an impact on the industry, contributing to steady growth and even innovation.

Based on what she is hearing from customers, Cassi Malone, strategic account manager with Corrugated Supplies Co., says, “I think e-commerce will continue to be huge. I still see meal-plan boxes everywhere, and subscription plans like Stitch Fix are still growing.

“Overall, I would say that e-commerce is a driving force in our industry,” she continues. “It’s continuing to help us evolve, improve delivery time, and become more inventive and proactive to add value for customers. When Amazon is shipping anything from a baseball to furniture, it helps to maximize packaging and cost. We’ll continue to see innovations in that area that help save on freight, fillers, and waste, and emphasize sustainability.”

Sustainability will continue to be a key selling point in the coming year. Tucker notes, “E-commerce packaging will get a few headwinds from plastic packaging substitutes. However, due to the lack of sustainability with plastics, this will get both consumer and governmental blowback. There is nowhere to go with plastics when we look at recycling; yes, they are recyclable, but they are not recycled. The solution is for consumers to return the used plastic packaging back to the store.

“Corrugated is the foremost recycled package,” he says. More can be done to promote that fact. “I see our industry getting the word out by printing ‘Recycle This Box’ on these wonders of shipping. We will then take back what the plastic world has attempted to steal from us.”

While an explicit sustainability message may appeal to some markets, Tucker understands that more will be required for boxes that hope to deliver customer value as well as products. “E-commerce is here to stay, and it’s growing. We will see that growth become 20%–25% of all retail purchases in the next few years. At the same time, more highly decorated packaging will be required to serve this growing trend. From the Bay Cities perspective, we see the use of experimental packaging finally catching wind. This will include a mix of augmented reality, near-field communication (NFC), QR codes, text to play, and Digimarc—utilized by both large and small brands looking for that personal touch of individualism to drive the experience.”

Malone agrees, noting, “Consumers are loving the unboxing experience. When I think about corrugated in 2020, I think we’ll still be dealing with trying to beautify boxes.”

That applies just as much—if not more—to the rigid box and folding carton segment of the industry. Cynthia Calvert-Copeland, owner of Professional Image Packaging, says, “With distributors such as Amazon encouraging secondary packaging, e-commerce businesses can now utilize great product packaging for in-store displays while at the same time designing them to aid in product protection during transit. The ‘first-touch’ experience is not lost with e-commerce. Packaging will only become more important to maintain a sense of ‘full value’ for customers buying online.”

Even so, Calvert-Copeland believes rigid box and folding carton business may experience more market fluctuation than corrugated over the next year. “As we look ahead into 2020, there are distinct shifts in the industry, specifically in the wants and needs of our customers,” she says. “As their products adapt with the market and customer trends, so too do their expectations for packaging. The next 12 months will likely see fluctuation in rigid box pricing as companies prioritize their packaging being manufactured in the United States and emphasize affordability. Folding cartons will continue to rise due to their versatility and cost-effectiveness when manufactured domestically.” She believes this will be especially true in the natural-food market, a segment that is still showing growth.

Digital’s Year?

For years, boxmakers have been watching digital printing increase in popularity to become an important adjunct to flexo presses for sample printing and economical small runs. And every year one question arises: Is this the year digital printing reaches its tipping point, achieving the high quality and lower costs that would set it on equal footing with traditional methods?

“I know everybody’s talking about digital, but we’re just not there yet,” Carman says.

“Digital printing will play a big part in e-commerce,” Tucker believes. “The advent of digital printing has allowed converters a new avenue to go to market. Large, single-pass printers are popping up everywhere. As these machines evolve, we will see better reproduction, lower consumable costs, higher speeds, and high resolution.”

Although its time has not yet arrived, Carman points out, “We’re always looking at digital printing. It’s not a matter of if; it’s when the critical mass will happen. We’re monitoring it, investigating it, utilizing it. But when it comes to investing in digital printing—it would be premature for us to do that at this point. So we’re partnering more than we have in the past for production runs, samples. Right now, partnering makes more sense.”

Calvert-Copeland is in a similar situation, noting that, while increasingly popular, the technology still needs time to mature. “While we don’t currently utilize digital printing, adoption will only continue its exponential growth as the technology becomes more and more affordable. Overall, the challenges of digital—mainly format size and quality—will still need to be resolved.”

Malone, however, suggests that perhaps a winner-takes-all approach to the digital-versus-flexo question could be set aside in favor of a more utilitarian view. In other words, the answer need not be digital or traditional. Perhaps the best solution is simply choosing the right tool for the job. “I think digital and traditional printing can co-exist with one another and complement one another,” she notes. “I don’t think it will be the competition people thought. So I think we’ll continue to see more graphics and digital-printing improvements, as well as traditional printing.

“I think digital printing is a very hard thing to adapt to,” she adds. “It’s a huge undertaking for companies to take on. So I believe we’ll see more box companies partnering up with digital providers to capitalize on the market without needing to purchase and hire or train their own people. That would be a smart move.”

Final Thoughts

“I don’t think I see any great new technology or machinery coming to boxmaking,” Carman says, “because, honestly, there’s already really great machinery out there, no question. If anything, we have an abundance of great equipment. It’s just very expensive.”

Noting the way the industry has contracted over the last decade, he adds, “I think there’ll continue to be some consolidation, but I don’t foresee anything major. I think a lot has already happened—and will continue to—but I think it’s going to slow down. For me, a bigger concern is that we’re seeing a number of new mills and new companies. I just hope there’s enough demand to support the capacity coming online.

“At StandFast,” Carman continues, “we’ve been expanding, adding equipment. Business has been good. Lead times have been stretched, though, and the business has been a little bit volatile in terms of overall volume. It’s like it’s been too much or not enough. We’d like to see more consistency and steadier business across the board. And, of course, we’d like to see steady growth.”

“Prices are always going up, and we’re always trying to add more value to service,” says Malone. “People are expecting more now. For one thing, customers want everyone to model Amazon’s two-day delivery, which puts pressure on everyone up the supply chain. So I’m most excited to see how we can do even better with focusing on the customer experience as a whole—improving each of the touchpoints for customers.”

Calvert-Copeland adds, “Looking into 2020, I am incredibly hopeful for the continued growth of economical and environmentally friendly paper options over plastics and nonrecyclables.”

Tucker echoes that. “I would like to see our industry embrace the many opportunities our substrate brings as a sustainable solution for a growing, consumer-driven market. We need to be proud of our accomplishments with this medium.” In addition, he says, “I would like to see us employ [more] young people and women in our facilities.”

Considering the future of the industry in general, Carman says, “I’m excited about AICC and my new role as chairman. The Association is doing a lot of good things for the industry. It’s a dynamic organization and a dynamic industry. There’s a lot of innovation happening among the independents that’s cool to see. There are challenges, of course. But the independents are thriving.”

Robert Bittner is a Michigan-based freelance journalist and a frequent BoxScore contributor.