Q and A with Rachel Kenyon of the Fibre Box Association
The Packer’s Tom Karst in February interviewed Rachel Kenyon, senior vice president of the Chicago-based Fibre Box Association, about industry trends and supply chain challenges in the packaging industry.
The association, founded in 1940, speaks to the issues, trends and technical challenges of the corrugated industry.
The Packer: What are the overall supply and demand conditions like right now for the corrugated industry?
Kenyon: I think we're like a lot of industries, trying to work our way through new dynamics. I was thinking about all the similarities there are between our industry and the produce industry. Like the produce industry, we're fortunate to have most of our supply [come from the U.S.]. North America is one of the world’s 'fiber baskets' A lot of our raw materials are sourced here in the U.S., so that's good for us. Trees are a renewable resource and when harvested and combined with recycled fibers, make boxes.
We do still deal with some difficulties for things like adhesives, for instance. There was a big storm a year ago in Texas and the Gulf Coast region, where most of the adhesives are made. That was an issue for our industry. We've worked through that to make sure that we can get supply because boxes are really essential to everything else getting to where it needs to be.
And a lot of our member companies employ their own trucking services, so whether they have drivers that work for the plants or whether they are contracting (with the plants), they've got some dedicated trucks there. So that has worked out for us, as well.
Then, on the demand side, we continue to have a strong demand for our products. We ended 2021 with record-high shipments. That's the second year in a row of record-high shipments. In 2020, there were 407 billion square feet of production and in [2021] there were 416 billion square feet of product shipped; that’s a 2.4% increase year over year.
The Packer: Those are all-time records, then?
Kenyon: They are. We have been tracking shipments since 1940. The previous record was set in 1999, and that was 405 billion square feet of product. And then, as I mentioned in 2020, we set the record at 407 billion square feet of production, and again in 2021, we've jumped to 416 billion square feet, which is again an all-time record for the industry.
The Packer: What's in the news for (the association)? Is there any current or upcoming research that you are funding?
Kenyon: Currently, the association is conducting a fourth lifecycle assessment [of corrugated boxes]. We continue to work to improve our environmental footprint, and also the performance of the box. The life cycle assessment that we're currently working on should be available at the end of this year. We're also working on some research projects that look at box performance, everything from how much fiber needs to be in the box to how boxes are set up on the pallet so [shippers] can get the most optimal performance.
The Packer: We talk about corrugated and trees being the raw material. Are there boxes made of other natural fiber? And is that a market that's growing?
Kenyon: Not so much here in the U.S; again, because we're fortunate to have those renewable resources available to us. In other parts of the world, they're not as readily available. For instance, in parts of Asia, there aren’t a lot of trees, and so they are looking at using other alternate materials like grasses or bamboo.
The Packer: When you think about opportunities and challenges for the corrugated industry, what comes to mind? What are the headwinds and tailwinds for the growth of corrugated demand?
Kenyon: For the headwinds, similar to the produce industry, labor is a big concern for us. Making sure we have labor to staff our plants is a challenge. I think [labor] will continue to probably be our biggest headwind going forward. There are a lot of people who have found great success in working in our plants, and who have been there for 20, 30, 40 years. But as the [older] generation continues to retire, we need that influx of new labor into the market. Making our industry an attractive industry to people for employment, that's very important to us.
Again, I look at the similarities between produce and what we do; boxes are plant-based packages. Farmers grow trees; mostly privately held tree farms are where the fiber comes from. The plant-based fiber makes up, by far, the largest piece of the packaging, and then you've got starch and moisture.
We're very careful about being stewards of the land and our natural resources. Having that renewable supply is very important to us, along with being able to get boxes back (through recycling).
One of the challenges for us going forward, I think, is making sure that consumers are recycling as much as they can.
For many, many years, grocery retailers have been tremendous partners to us in that recycling stream. Retailers all have balers in the back room, and they'll put their packaging in those balers and then they sell those bales of corrugated back to our industry. And now, as more goes directly to people's doorsteps, we want them to choose the recycling bin.
The Packer: The challenge, then, is for consumers to put [boxes] in the recycling bin rather than just the dumpster, right?
Kenyon: There are places, for instance, in cities and multifamily homes and condo buildings, where it may not be as convenient to recycle. They may have a trash chute, but they may not have a place to put recyclables. And so, you know, we recognize that. And we also recognize that, in some rural communities, they don't have curbside recycling, so they rely on a drop-off program or some other kind of program.
In some cases, it may not be as convenient, but we do know, based on a recent study by the American Forest and Paper Association, that 94% of Americans have access to recycling and corrugated is one of the products that have the highest recovery rate of any product that's being recycled. We’ve hovered around a 90% recycling rate for the last decade or so. We want to make sure that we stay at those very high recovery rates.
The Packer: As far as demand for corrugated, the economy is growing and e-commerce is strong. How do you assess growth for the sector?
Kenyon: Just under 40% of all boxes are used for food and beverage packaging, so that continues to be a very strong segment of business for us. And then, of course, e-commerce, which is growing each year. So those are two markets that are strong. And then, what we've seen in the last couple of years is a lot of opportunities to convert other forms of packaging into corrugated packaging. People are concerned about stainability, and paper, and corrugated is a very sustainable product and packaging choice. It's exciting to see the innovation that's happening around, 'How can we use paper?' and 'How can we change what we're currently using to a corrugated box?' That's been really exciting for us to see.
