As we begin 2024; the upcoming year appears to have similar packaging hot topics from 2023. This makes Pack Protocols skeptical for the future of packaging advancements. It indicates these items are high level talking points to appease their customers. Businesses are aware that achieving packaging goals are a “heavier lift” than previously believed. Pack Protocols has highlighted important business hot topics for packaging industry professionals or anyone dealing with packaging in 2024.
- Large Packaging firms continue to acquire smaller firms resembling to what was found in 2023 Packaging Foresight. Expect this movement to continue.
2023 continued to see an uptick in mergers and acquisitions in the packaging industry. The most notable corporate coupling was WestRock (formerly MeadWestvaco and Rock-Tenn) purchasing Smurfit-Kappa (formerly Jefferson Smurfit, Stone, Kappa Packaging). If two pre-existing merged companies have to combine to form one mega company, it may indicate the packaging industry is in an unhealthy situation.
From a business perspective, firms are acquiring other firms for a variety of reasons. These include trying to stay competitive with other large packaging organizations, tax write-offs or to compliment other business objectives.
For some customers these acquisitions may align with their needs. Conversely, it could result in customers finding alternative suppliers. Clients who do want to be treated as customer 987654 will use hyperlocal packaging firms. This leads to the subsequent trend of..
- Shipping packaged products via logistic carriers are resulting in standard shipping and freight costs increases once again. This year carriers are targeting price increase by zone and service types.
It appears most carriers larger percentage increases are for long transit shipments. The behemoth’s of the logistic world are trying to stay competitive by encroaching on regional markets. Does this approach sound familiar from the previous bullet point?
A few carriers have gone to dynamic pricing model programs similar to ride sharing services where the shipper will inflict more price pain if they wait until the last minute to ship. This model may try to alleviate the glut of shipping that normally occurs in Q4, but it could also be another revenue driver for logistic carriers.
- Packaging companies are continuing to offset their costs by attempting to use new technologies.
Packaging companies like all business has had to pay more for highly skilled labor. To offset costs, firms are looking to automation, robots, artificial intelligence (AI) or machine learning (ML) to fill the gaps to replace human workers. These technologies make sense to use for a few human jobs that are dangerous or do not attract an applicant pool. If companies try to replace a majority of human work with a fully automated workforce, these strategies may backfire. Without employees the number of customer’s to buy and support companies product decreases.
- Packaging Sustainability remains a hot topic or a lot of hot air.
Companies continue to push for sustainability efforts publicly, to make their customers who value the environment overly satisfied. Select firms are producing sustainable packaging, but may have made concessions in doing so. This could result in impacts to product quality or overall cost, which is not always sustainable long-term.
Additionally, organizations can produce packaging where they think it’s sustainable, but is not. This is due impart to challenges to regulations or infrastructure. If businesses want to continue the sustainability push, they need to invest in programs and capital across the board. This means continually improving their packaging after it is “sustainable”.
In short, sustainability is not straightforward and can be complicated. To be successful with sustainability, firms need to address all facets.
From Pack Protocols perspective, these hot topics will continue to be important for the packaging industry in the near future. These hot topics will continue to persist as firms continue to navigate the “ever-changing” packaging landscape.
Prioritizing all of these topics can be exhausting. Pack Protocols LLC can help alleviate these challenges. Contact us at 657-204-6093 or [email protected]!