State of the Industry: Corrugated

Fresh off explosive growth, the corrugated printing and converting industry is primed for evolution. To gain perspective on the state of the industry and what’s to come, Packaging Impressions spoke to leaders in the corrugated packaging market. Here are some of the trends and insights shared.

Supply Chain Eases

Corrugated packaging printers and converters are gradually experiencing a welcome respite from supply chain shortages. “As COVID fades and the stimulus dries up, we know that some commodity prices will fall as will demand,” Greg Tucker, chairman and CEO of Bay Cities Packaging and Displays, Pico Rivera, California, says. “We are experiencing this now as we close 2022. I did not expect this drop in raw material prices until the first quarter of 2023.”

Corrugated converters that nurtured supplier relationships did well during the tightest supply chain constraints and continue to benefit. “The supply chain issue with getting board was a big issue for both sides,” Jana Harris, president of Harris Packaging Corporation in Haltom City, Texas, says. “Thankfully, we’ve gotten very good relationships with our vendors. And we’re one of the largest sheet plants in Texas, and [we] paid in 10 days or less, so they like us a lot.”

Harris Packaging General Manager Matt Bivens adds, “We really leaned on our 45-year track record that was started by Jana’s dad and has continued on for 45 years of just being a good customer. And because we’re a good customer, we pay quickly. We’re able to get more board than most people, and we’re able to get it in a timely fashion.”

Strategic, Consistent Investment Pays Off

Another factor that enabled Harris Packaging Corporation to keep tight turnaround times despite supply chain challenges is the corrugated packaging converter and printer’s agility.

“The equipment — the investing in equipment — is the biggest thing when it comes to getting things done,” Bivens says. “When we look at other facilities, we noticed that a lot of them haven’t reinvested in their businesses like how the Harris family has always reinvested in their business. That reinvestment paid dividends over the last two years.

“In 2007, they bought a Martin 924 Medline 38˝ flexo four colors,” he adds. “In 2010, they bought a 66˝ Ward diecutter six color with JB dryers and UV systems on it. In 2011, they bought a Bobst flatbed diecutter. In 2017, they bought a J&L Mark 5 specialty folder/gluer, and in 2019, they bought a prototype 38˝ Flexo folder/gluer from Ward that runs 21,000 an hour and is four color.”

When discussing how well Harris Packaging Corporation overcame supply chain challenges, Bivens replies, “The best way to say it for the corrugated side is: From an allocation standpoint, post-allocation, we ran 50% more volume than we did pre-allocation.”

Bay Cities Packaging and Displays used the silver linings in the recently turbulent times to further bolster its printing and converting capabilities and ensure a prosperous future.

“During the explosion of government stimulus funneled into the U.S. economy during COVID, Bay Cities Packaging and Displays continued to expand our fleet of machinery, strengthened and automated our process using technology rather than headcount, kept client and employee retention as our center point, and added another 150,000 sq. ft. of pack-out and fulfillment space,” Tucker says.

The company, he adds, invested in digital printing, and large-format inside-outside flexo printing and diecutting. “The installation of another high-speed, single-pass, large-format digital printer has aided to further facilitate retail packaging and complement our other large-format digital printer that caters to the point-of-purchase display segments of our business. We nicknamed them ‘Thunder’ and ‘Lightning’ due to their immense size and speed. One is very large in format, with six-color UV ink, and the other is a bit smaller footprint with water-based inks and prints with much finer resolution.

In addition to its traditional corrugated packaging products, Bay Cities produces point-of-sale displays. | Credit: Bay Cities Packaging and Displays

“On our traditional printing side, the installation of a 145˝, five-color (three inside and two outside) large-format flexo printer and rotary diecutter accommodates our display business by efficiently printing and diecutting large sheets to build our point-of-purchase displays,” he continues. “This eliminates inventory, reduces set-up times, and even speeds up the assembly of displays in packout. The inside-outside print feature solves for our e-commerce and subscription business by printing and diecutting on two sides in one pass to accentuate the unboxing experience desired by the consumers and the brands that serve them.”

Michael D’Angelo, president of AICC, The Independent Packaging Association, notes, “There’s a solution for every challenge in this industry, and it could be flexo printing, digital printing, traditional steel-rule diecutting, rotary or platen diecutting, or laser diecutting.”

Automation Enables People-First Strategy

In recent years, much of the conversation around automation technology has focused on the potential to supplement labor during shortages. This perspective has been driven by the recognition that automation could bolster organizational efficiency and productivity, particularly in roles where human labor might be prohibitively costly or difficult to source. Bay Cities Packaging and Displays have begun to explore more elevated uses of automation and artificial intelligence technologies.

“Bay Cities [has] automated processes that tie the order input, scheduling tasks, and manufacturing reporting together into a seamless workflow,” Tucker says. “This effort reduced, or eliminated, the manual employee touchpoints needed, and increased the speed and accuracy of task completion so we could get orders out the door faster for our customers. We put our first toe in the water by utilizing AI to help us make routing decisions prior to plant scheduling. This will even replace scheduling as we know it and incorporate machine learning to support a more efficient plant and improve our speed to market. All of this development is to move our employees away from inputting data, and position them towards a customer-facing focus with the goal of bringing ultimate customer service back to our clients.”

One of multiple digital presses at Bay Cities. | Credit: Bay Cities Packaging and Displays

Honoring Values Helps Retain Employees

According to D’Angelo, while AICC members saw their businesses grow double-digits, and high double-digits in some cases, they also saw challenges that existed pre-pandemic exacerbated by the event. “Staffing being the biggest one,” D’Angelo says, “because it’s a manufacturing industry and getting people to come to manufacturing as blue-collar workers. Getting these young people, especially as folks that look like me tend to retire from time to time, into manufacturing operations is a challenge.”

To that aim, the association is working with its members to improve its messaging. D’Angelo explains that the group’s goal is to “show corrugated for the high-tech industry it is.”

“I talk to people who haven’t really thought about the box,” he adds. “When you get them to think a little bit deeper about the box, I can show them just how forward-looking the industry is because it had to be agile enough to be part of whatever the next trends are in how consumers want to buy. These can be food trends, shopping trends in retail or e-commerce. I explain the difference between getting something delivered by a drone versus being dropped on your doorstep by a human being is a challenge for the brand owner and the brand owner’s partner in packaging.”

A commitment to innovation in multiple arenas is not optional for packaging converters; it’s a must.

“Another reason why whether there’s a recession or not, the corrugated industry is in a good place,” D’Angelo says, is working in corrugated is doing work that significantly positively impacts society — a fact that isn’t always clear to those with limited exposure to converting and printing businesses.

Looking back at the pandemic, D’Angelo says he often had to explain how essential the corrugated industry is to people with even highly educated backgrounds. “I’d call a Secretary of State’s office to say, ‘You closed down one of our member’s businesses, and they’re a box maker.’ The response would be, ‘They’re a box maker, and that’s not an essential industry,’” D’Angelo recalls. “My response would be, ‘How do you think pharmaceuticals get to the pharmacy or food gets to the supermarket? It comes in a box.” Usually, the bureaucrat would say, ‘I’ll call you right back.’” On three occasions, D’Angelo reports, he received a call back in less than 10 minutes with the news that the converter’s business was reclassified as essential.

Most packaging- and print-related industries also have long engendered an ethos of environmental steward in their corporate cultures, but this is not a widely known fact.

“We need to continue to sell our sustainability story to the general public,” Bivens says. “The next generation of workers is more environmentally conscious than prior generations, and they need to understand that our industry has a sterling track record of taking care of the environment. I don’t think we do a good job of educating people on that.”

Harris is on a mission to generate this greater understanding of the corrugated industry’s commitment to eco-friendly practices by visiting high school and college campuses, and developing an affinity for the industry among the workers of the future. Whether speaking at elementary schools to explain the concept of sustainable forestry and responsibly managing trees as a crop, or at the University of Texas Arlington to explain how a position in the package converting and converting industry is a job in sustainability, she starts by directly addressing and knocking down students’ misconceptions and explaining how the industry values and their own align.

Eager to Pursue Possibilities

“For the last two years, everybody just needed product,” Bivens remarks. “So, the R&D and innovation side of things slowed down a lot. It was just get us what you can get us when you can get it, and not so much vision and looking into the future about what is going to come two, five, or 10 years down the road. We’re slowly getting back into that.”

Harris agrees, noting that much of this trend was customer-driven because they just needed boxes and “they didn’t have time to reinvent what they already had.”

Luckily, the world is shifting from a survival-oriented approach to one more focused on possibilities. “Our evolution in the packaging and point-of-purchase world is blossoming to meet the next challenges we see in our economy,” Tucker says. “The next three to six months will be choppy. Our goal is to continue to focus on employee growth, drive processes with software innovations — including AI — bring about digital print offerings, and flex our pack-out strengths while designing innovative experiences in the vehicles we sell to bring clients’ products to market in the retail packaging world in store and online, or via our retail display program campaigns.”

Corrugated converters and printers, D’Angelo explains, are primed for that change. “Our members’ plants are filled with all kinds of very creative people — older people to younger people,” he says. “There’s tremendous talent!”