Pack Protocols recently attended Pack Expo International in Chicago. While tromping through the massive McCormick Place Center and talking with various individuals, this year was unlike in years past. For those of you who could not attend; Pack Protocols wanted to share the insights we picked up while at the show.
There is widespread uncertainty of where the industry is heading
When talking to multiple sources from various companies both large and small, it appears there is no straight forward path where the packaging industry is heading. Large companies still feel uncertain about the future and sustaining profits. Firms are concerned that their products will not be profitable in the future from decline in use or due to regulations. These manufacturers are diverting by attempting to buy other smaller firms to improve their bottom lines or to prolong their dominance within their specific market.
Mid-sized and smaller businesses are either flourishing or struggling. Certain mid and small businesses (SB) have had an uphill climb in the years past due to the US Government enforcing payback of PPP money. Large corporations that accepted PPP loans had them forgiven with no questions asked. Small companies had to contend with the onslaught of larger companies and private equity firms attempting to divest or takeover business. These larger companies tend to use strong arm tactics and strategies to force the SB’s hands.
Conversely, several mid and small firms have been able gain an upper-hand on competition by being nimble and creative as most of these firms can maneuver much easier compared to a larger entity.
Sustainability push continues
This year a good portion of packaging suppliers at Pack Expo were touting sustainability as in years past. When walking the floor this year there was not much change. A few companies “upped their game” in the material world by deriving mono-layer materials with sustainable coatings. These actions addressed their previous recyclability issues. No other sustainability progress will take place until there’s improvement and progress with recycling collection and infrastructure. Institution of required regulations and rules for all parties to adhere to is necessary to be successful.
Automation is dominating manufacturing
Pack Protocols LLC discovered a lot of companies have ramped up automation efforts. The influx has increased over the pandemic to offset labor shortages. Looking at the latest Warn Letters; many packaging manufacturers exhibit a trend that employees are being let go. These findings are contrary to other articles written about the state of Packaging Industry Employment such as Packaging Dive’s Review of Pack Expo.
While brands and companies are proceeding with the narrative that companies have to go to automation because of labor shortages, that’s not the case. The firms need to justify their expensive automation investments. Businesses require employees to thrive, but worker headcounts are slashed dramatically with automation introduction. Employees supporting automation lines are paid less with more responsibilities. How are employees supposed to afford elevated product prices?
External factors having impact on industry and the labor market
The US Presidential Election definitely impacted the industry. A lot of companies were hesitant of making any moves until 2025. From an employment perspective there appears to be a standoff between workers and firms and it’s getting a bit ridiculous. While there are firms hiring, some employees are requesting absorbent amount of a compensation and remote work only. For other industries 100% remote work may be possible, not in the packaging industry. On the other hand, employers with available work are requesting workers either go to undesirable locations permanently or live in a large metropolitan area without a compensation package to sustain.
Side Note: The labor market for various industries is a coin toss as well. Some companies in specific industries are hiring rampantly while others are frantically laying off employees and shutting down manufacturing facilities.
The points above are compounded from the overall world economic state. In the US the cost of housing, food, transportation, and health care has soared and has not receded. This impacts the labor market directly. For example, employees who were going to retire stay working. This results in potential back fills or new hires being put off. No elected world leader can directly impact this issue. The only resolution to these challenges from Pack Protocol’s perspective is compromise by working with each other with varying opinions collaboratively!
Pack Protocols LLC can provide future trends and research in the packaging industry that may be critical to your business. Contact us today at +1 657-204-6093 or info{at}packprotocols.com