COVID-19, sustainability add to packaging costs, marketers say
Look for packaging costs to go up as the COVID-19 pandemic persists, packaging marketers say.
“The cost of raw goods has seen a steady increase over the past year due to COVID and we anticipate that to continue throughout 2021,” said Jeff Watkin, graphic and marketing manager with Collinsville, Ill.-based packaging manufacturer Sev-Rend Corp.
New products “in the sustainable field” tend to have higher costs, because that area of the industry is still developing, Watkin said.
“As that gains more widespread use, we can see it stabilizing somewhat, but with the COVID factor, we anticipate the cost of raw goods pricing to continue to rise,” he said.
The breadth of current “tamper-evident” products will continue to allow for packaging options to meet the market’s evolving needs, “with limited additional cost impact,” said Cindy Blish, associate brand and communications manager at Shelton, Conn.-based Inline Plastics Corp.
“As more traditional packaging evolves into tamper-evident packaging, this may result in packaging options that are at a slight premium over the conventional offerings — and let’s not forget the impact of raw-material pricing variations, especially when it is in high demand,” she said.
Innovation does bring higher costs, said Karen Reed, director of marketing and communications for Union Gap, Wash.-based closure maker Kwik Lok Corp.
“Today, the solutions available are all more expensive than the status quo,” she said.
“Any solutions must still deliver the same functionality.”
Cost is always an issue with any packaging, especially if it’s sustainable, said Jeffrey Brandenburg, CEO of Greenfield, Mass.-based JSB Group LLC, which operates QFresh Lab in Salinas, Calif.
Where costs ultimately will go is “anyone’s guess,” but a bit of perspective would help, Reed said.
“As a percentage of the total selling price of a product, the packaging is still a relatively minor piece,” she said.
There are ways to fight spiraling costs, marketers say. Stockton, Calif.-based Onions Etc. has found a way with its sleeve pack bag, said Derrell Kelso, CEO.
“We pack this in a special netted package and have designed our own special packaging technique to keep costs equal to other 2-pound-package offerings,” Kelso said.
“Organic sleeves and sweet onion sleeves are now the mover.”
Bags should convey value to the consumer, particularly in lean economic times, Kelso said.
“You’d better have the same price per pound or better in a bag, and it’s best to have a different size in the bag,” he said.
“Meaning, if a retailer is selling jumbos bulk, sell mediums in a bag; if you are selling mediums bulk, sell prepacks in a bag.”
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