Finding Your Niche Equals Success
Strategize and focus on your niche market to ensure survival in the folding carton industry.
March 2007 by Chris Mc Loone
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The state of the folding carton industry is hard to pin down. Walking up and down the supermarket aisles reveals no shortage of folding carton containers. But as we all know, there’s far more to the folding carton market than just food packaging. The majority of large consumer electronics items come in corrugated or paperboard packaging. These items, however, are often manufactured in foreign countries, and are therefore packaged there as well. So the North American folding carton market takes a hit. Couple this reality with changes in the supply chain, and some might consider the North American folding carton market in difficult straits. The answer, though, according to some, is to find your niche market and focus on it; stay away from consumer electronics packaging if that’s hurting you.
To some converters, the threat of offshoring manufacturing and packaging to China is of the greatest importance, while to others, consolidation is. Still others find supply chain issues as the most significant problems for converters in America. The northwest North American mills that used to sell paperboard to the Middle East now face stiff competition from China, and in some cases are going out of business. The paperboard industry in general could be in for difficult times, but there’s no reason to fear just yet.
Folding carton market
There are a variety of indicators that measure the health of the folding carton market, including supply chain costs, markets using folding cartons, threats from alternative packaging options, consolidation, and so on.
According to The Freedonia Group study titled, Paper Versus Plastic in Packaging, paper packaging is expected to post marginal advances or continue to decline in most competitive markets through 2010 due to inroads from plastic. That said, the study predicts above-average opportunities in food service, dairy, and soy milk applications, with organic milk as a growth niche. The study states, “While most dairy applications for paper are mature, heightened demand for ice cream novelties, especially reduced-fat and bite-sized varieties, will support folding carton opportunities. Solid prospects for paper in soy beverage packaging will result from the ongoing movement of soy beverages into the mainstream marketplace and the general preference for paperboard containers in promoting a natural image.”
During February’s Packaging and Label Gravure Association Global (PLGA Global) Tenth Annual Operational Conference, Michael Nowak, president, Coating Excellence International, stated that the North American paperboard market is being impacted by globalization. Northwest mills have lost their position in the Far East, resulting in many mills shutting down during the past ten years. According to Nowak, paper growth has gone to the Far East. China and India are the fastest growing markets for paper demand. China is expected to have the most advanced paper making machinery, with paper mills producing 100 million tons and exporting 50-60 percent of their total output. Nowak stated that the U.S. is set to see massive imports, with the North American paper market becoming less competitive. “U.S. converters will need to start looking at foreign suppliers to stay competitive,” he says.
To some converters, the threat of offshoring manufacturing and packaging to China is of the greatest importance, while to others, consolidation is. Still others find supply chain issues as the most significant problems for converters in America. The northwest North American mills that used to sell paperboard to the Middle East now face stiff competition from China, and in some cases are going out of business. The paperboard industry in general could be in for difficult times, but there’s no reason to fear just yet.
Folding carton market
There are a variety of indicators that measure the health of the folding carton market, including supply chain costs, markets using folding cartons, threats from alternative packaging options, consolidation, and so on.
According to The Freedonia Group study titled, Paper Versus Plastic in Packaging, paper packaging is expected to post marginal advances or continue to decline in most competitive markets through 2010 due to inroads from plastic. That said, the study predicts above-average opportunities in food service, dairy, and soy milk applications, with organic milk as a growth niche. The study states, “While most dairy applications for paper are mature, heightened demand for ice cream novelties, especially reduced-fat and bite-sized varieties, will support folding carton opportunities. Solid prospects for paper in soy beverage packaging will result from the ongoing movement of soy beverages into the mainstream marketplace and the general preference for paperboard containers in promoting a natural image.”
During February’s Packaging and Label Gravure Association Global (PLGA Global) Tenth Annual Operational Conference, Michael Nowak, president, Coating Excellence International, stated that the North American paperboard market is being impacted by globalization. Northwest mills have lost their position in the Far East, resulting in many mills shutting down during the past ten years. According to Nowak, paper growth has gone to the Far East. China and India are the fastest growing markets for paper demand. China is expected to have the most advanced paper making machinery, with paper mills producing 100 million tons and exporting 50-60 percent of their total output. Nowak stated that the U.S. is set to see massive imports, with the North American paper market becoming less competitive. “U.S. converters will need to start looking at foreign suppliers to stay competitive,” he says.
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