Whether you’re shopping online or taking your weekly stroll at the grocery, corrugated cardboard box packaging is a total yes for all of your items. Who would not love the protection that this packaging offers, right? Nothing can give you peace of mind more than knowing that your items are all safe inside a cardboard box. You can sit back and relax while waiting for them to arrive at your place and open them.
Retail stores have been using corrugated cardboard box packaging for shipping products. Some even come with functional packaging that shoppers can use even after the purchase. This packaging solution provides a versatile material that brands can take advantage of. Maximizing advanced and fresh designs, cardboard packaging can offer multi-function material or create forms never thought possible.
Cardboard box packaging is the number one choice of material for packing and shipping products. This year, the demand for cardboard box packaging has significantly increased, resulting in a price hike. Wondering how this situation affects the promotional products industry? Let’s have a closer look at this pressing issue through this case study.
What Are the Advantages of Corrugated Cardboard Box Packaging Material?
Notably, cardboard can provide a sustainable material for businesses no matter which industry they belong to. Depending on the amount of protection that a product requires, manufacturers can produce corrugated cardboard in different sizes and thicknesses.
Consequently, businesses can reuse these cardboard materials after use. They can also easily dispose of this material and don’t need any extra process to get rid of it. Worn-out cardboard can still be profitable as it can be easily transformed into new cardboard pieces. Recycling cardboard allows us to save energy that can be used in manufacturing other resources.
To cite an example, this custom cardboard packaging by Fundador notably displays sustainability. It doesn’t diminish the brand visibility, and the production cost is fair enough.
As corrugated cardboard thickness can be adjusted, this feature definitely makes it a perfect fit for any product. This material can receive different coatings and adhesives to become more sturdy and suitable for branding. A cardboard box packaging can come in different sizes and can be folded smoothly to fit in any industry. It also provides a massive room for exploration and brand positioning. There are many printing methods that brands can choose from to incorporate their brand elements into this packaging solution.
This example of cardboard packaging design by Ferrero shows how brands can value creativity. They can come up with different customization options with cardboard material.
Unlike other packaging materials available in the market, cardboard is definitely the most viable of them all. They don’t require high labor costs or costly tools to manufacture and produce bulk supplies. Recycled raw materials for producing cardboard are definitely abundant and can be sourced anywhere.
By ordering cardboard material in bulk, businesses can save considerably on their packaging costs. Moreover, as cardboard box packaging is usually shipped flatpack, they can order in bulk and still have the space to store it. They can easily keep stocks but do not need an excessive amount of storage room.
This honeycomb cardboard display exhibits how convenient a cardboard material is. Its lightweight feature makes it perfect for moving in different high traffic areas. It will not also take up much space and will save shipping costs.
The pandemic brought mixed fortunes in the packaging industry. Even though the price of cardboard stayed fairly flat last year, it surely didn’t last. As brands and businesses focused on e-commerce, the demand for cardboard box packaging saw a significant increase.
As companies relied upon cardboard box packaging in delivering their merchandise, the demand increased. It clearly became the go-to packaging for their virtual events and celebrations. Ironically, Covid-19 also reduced paper consumption as we all spent our days cooped up in our homes.
Moreover, the skyrocketing transportation cost adds up to this packaging price increase. Materials and manufactured products need to be allocated to different locations. However, the swelling price for transportation caused a tougher situation for the industry. As the price of diesel fuel goes upward, the packaging materials and output have to keep up as well. Transportation protocols during the pandemic also cause disruption in supply.
How Does the Cost Increase Affect the Promotional Products Industry?
The promotional products industry is an essential part of integrated marketing. It involves the conceptual packaging and distribution of promotional products imprinted with its message to targeted audiences.
To stand out and provide a wonderful customer-centric experience, a reliable packaging solution is needed. But what happens when the cost of sustainable packaging increased? Here are some repercussions that we see.
First, it may cause extended lead time. As the pandemic happens, it may be harder for manufacturers to outsource raw materials. The ASI Central reported that the demand for corrugated cardboard packaging is going up. In line with this, cardboard packaging factories notice that the price for raw materials is increasing as well. On top of that, materials will have to undergo a sanitation process for protocol purposes. These factors have a strong impact to lead time and can negatively affect sales. This may result in prolonged production lead time for manufacturers and delayed operations for businesses.
Second, there may be an unmanageable increase in demand. The inflation that the packaging industry experiences will certainly produce discontent on different sides of the market. An increase in demand pushes the manufacturers to escalate the price of cardboard to keep up profit margins. However, businesses cannot afford to pass this on to their consumers. This will make it tougher for the industry to recover.
Lastly, it might result in a supply shortage. The increasing demand for corrugated cardboard will definitely generate scarcity. The challenging accumulation of raw materials will reduce productivity and output. Businesses will have to come up with a backup plan in regards to their packaging solution.
This pressing issue might look small-scale at first. But as we dive deeper into it, this might cause massive problems to the promotional products industry. Adjusting to the consequences that it might cause will not be easy for manufacturers, distributors, and consumers. The industry should have a plan that will help it recover through these challenging times.
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Frequently Asked Questions:
Who Are the Most Affected of this Price Increase?
The corrugated or brown box manufacturers are the most affected by this price increase. They are the ones who mainly use recycled raw materials for their production.
What is the Impact of this Pressing Issue to the Consumers?
Apparently, it will result in spending more on any branded product and goods that they will purchase. This might also lead to complaints and discontent from their side.
What are the Options for Businesses in Handling this Situation?
First, they can shoulder the added cost for their packaging solution and take a hit on their profit margins. The second is to pass the added cost or percentage directly to their consumers.