How inflation and customer concerns are influencing the packaging industry

If you’re going to be successful in the packaging industry, it’s imperative that you stay in tune with your customers’ needs, industry experts say.

Customers are concerned about packaging for two reasons, said Karen Reed, global director of marketing for Yakima, Wash.-based Kwik Lok Corp. They want to be sure their package is efficient, and that it gets their products to market as safely as possible.

“They are also facing a variety of perceptions and emerging regulations that require them to look at their packaging to see where they can eliminate waste or change out difficult-to-recycle materials while still assuring the safety of the product and a good consumer experience,” she said.

People are also worried about the environment.

“Public concern about the environment has been amplified in the past few years, with alarming news of climate change and oceans swimming in discarded plastic waste,” said Rachel Kenyon, senior vice president for the Itasca, Ill.-based Fibre Box Association. 

“Today’s consumer understands how important it is to plan for the future and start making changes not today, but yesterday,” she said. 

Related: Kwik Lok says new Enviro-Lok has less plastic, less water and less carbon emissions

The corrugated industry has spent decades striving to reduce its environmental impact and provide the most sustainable packaging possible with new technology, clean energy and a highly productive recovery/recycling infrastructure, Kenyon said.

As a result, industry members have substantially lowered the carbon footprint of the average corrugated box, she said.

The results of the corrugated industry’s efforts to protect the environment are measured in regular life cycle assessments by third-party scientific experts, Kenyon said.

“These studies document continuous improvement and demonstrate the magnitude and longevity of the effort needed to effect positive change,” she said.

The latest report will be issued in the fall.

Environmentally friendly packaging solutions are gaining momentum as many organizations seek ways to reduce their carbon footprints and meet stakeholder and consumer expectations related to sustainability, said Jason Adlam, vice president of new business development for Alpharetta, Ga.-based CHEP USA.

The inflation factor

Inflation is another challenge the packaging industry must face. As customers look for ways to cut costs during inflationary times, they’re finding that cheaper does not necessarily mean less expensive, said Reed of Kwik Lok.

“If you factor in downtime, product waste and poor consumer experience, cheaper products are quickly seen to be costly to the brand overall,” she said.

Kwik Lok options are known for their reliability, ease of use and durability, she said, all of which minimize risk at a time when companies can’t afford to have downtime or waste.   

“We know customers need solutions that help their bottom line and meet sustainability goals and regulatory requirements,” Reed said.

“As brands prepare for all three, they are looking for reliable solutions that they can count on to work seamlessly with their current equipment,” she said. “They also need science-based information and support in navigating the complex regulatory environment that is emerging globally.”

Inflation continues to challenge businesses across the supply network, said Adlam of CHEP USA.

As material and labor expenses rise, CHEP is increasing its collaboration with customers, partnering with suppliers and investing in artificial intelligence and digital solutions “to help build end-to-end supply chain agility and resilience to weather ever-changing customer and market dynamics,” he said.

For example, over the past five years, CHEP invested $200 million in automating its facilities and improving its ability to serve customers by 20% year-over-year, Adlam said.

Companies also are taking a hard look at their packaging as they deal with e-commerce trends, increased consumer, investor and regulatory pressures regarding sustainability, and lingering concerns around health and safety in a post-COVID world, Adlam said.

“As a result, retailers and manufacturers continue to emphasize price, functionality, safety, sustainable sourcing, availability and loss avoidance in their packaging value chain,” he said.

More on this topic: Packaging