Opening Lines: Up, Up, and Away
How the packaging industry is combating rising fuel costs.
By Jennifer Kwok, Managing EditorIf you’re like me and everyone else in America, you’ve been having sticker shock each time you pull up to the gas station and realize how much—and how quickly—the cost of fuel has risen. It’s enough to encourage a daily Los Angeles commuter like me to look for other options—options that do not include living out of my office.
How are rising fuel costs affecting the price of packaging? The news has slowly but surely started to trickle in. From suppliers of plastic to paper, companies have begun quietly letting us know that they are raising their material prices. Last month alone, I received several such press releases, including one from plastics giant DuPont announcing a price increase of up to 15 cents per pound for many of its widely used ethylene copolymers, including Surlyn.
These press announcements are often brief—two paragraphs at most. No one is excited to talk about this problem.
It’s common knowledge that higher petroleum costs affect everything down the packaging stream—not only material costs, but also the cost to produce packaging and transport goods and even the price of lipstick at the store. Like all consumer product goods industries, the beauty industry stands to suffer.
But there may be a silver lining. While the beauty industry and the rest of the country grapple with the problem with oil, one entity that stands to benefit from this crisis could be the environment—offshore drilling aside. Demand for hybrid cars has never been higher. People are driving less. And now, the beauty industry is looking for fuel-efficient ways to produce packaging.
As material costs rise, perhaps marketers will look for ways to reduce the amount of packaging that they use. Packaging scorecards may have started this trend, but higher packaging prices will drive the initiative home.
Suppliers are also renewing efforts to reduce shipping costs. MeadWestvaco Health and Beauty Packaging offers its Evolution2 setup box alternative, which ships flat instead of erected, reducing the number of shipping trucks needed.
Suppliers may also reduce shipping costs by sourcing products locally. “On a small scale, we’ve begun to keep things a little bit closer to home, particularly for large, bulky products for which transportation is a larger percentage of the overall cost of goods,” says Scott Kestenbaum, senior account manager for supplier Zorbit Resources. “Certain products that we would have produced overseas a year ago, we may now look to manufacture domestically.”
Another option is using alternative energy, as many paper suppliers are doing. Mohawk Paper Mills uses wind power, while Monadnock Paper Mills utilizes on-site hydroelectric dams. Brands such as Aveda use green energy in their own facilities.
Alternative energy is the way to the future. Due to unwelcome pressure, our industry will find ways to make packaging more sustainable.