The Corrugated Packaging Sector, excerpts from PRIMIR Research

I am often asked to give my impressions on various topics around packaging and how it is managed through the supply chain from concept to consumer. The corrugated packaging sector is no different, so to bring some of these insights to the readership of Digital4Packaging we asked PRIMIR if we could pull excerpts from their 2012 study that Karstedt Partners was commissioned to write titled Packaging: Evaluation of Vertical Markets & Key Applications. This study was unique to many industry studies in that it looked at the force being placed on Brand Owners, the originator of packaging orders. Taking this focus a step further the study looked in-depth at the major vertical markets of food, beverage, household, personal care and healthcare to see what will be driving packaging demand in these verticals and thus driving the supply chain. Following are some of what we brought to the readers surrounding the corrugated packaging sector.

In that study the food and beverage vertical was identified as the largest end-user of corrugated boxes of all segments in North America, accounting for 51 percent of shipments in 2010. Corrugated for the food vertical is forecast to continue increasing at an average annual rate of 2.4 percent through 2015.

Demand for corrugated boxes traditionally fluctuates with the growth of a wide range of consumer products including both durable and non-durable manufactured goods. General macroeconomic conditions such as changes in real GDP, consumer spending, international trade, industrial production and factors that affect manufactured goods markets are the drivers behind volume shifts in corrugated shipments.

The report notes the high percentage and volume of corrugated cartons used for shipping containers has historically insulated the corrugated industry from volume fluctuations caused by material substitutions. Corrugated cartons are valued for their low cost, durability and strength. By industry estimates shipping containers account for 75-80 percent of corrugated volume.