Food manufacturers

Packaging shortages will impact food manufacturers through 2022

Packaging shortages are fueling persistent fluctuations in pre-holiday food and drink availability as many manufacturers source materials from overseas – and there is no clear end in sight.

“Supply chain disruptions continue to affect the food and packaging industry, with limited supplies of packaging materials, mainly glass, containerboard, cardboard and aluminum.” , Neil Coole, Food and Retail Supply Chain Director for the Americas at BSI, Recount The Food Institute.

Combined with ongoing labor issues and a shortage of freight containers to move bulk materials, “these challenges will continue to put pressure on manufacturers and suppliers to meet growing demands,” added Coole.

Paper-based materials

The intense demand for corrugated cardboard, cardboard and paper is causing challenges, in large part due to the increase in shipping activities of major e-commerce retailers. In addition, the rise in take-out food in restaurants is exacerbating shortages of items like coffee mugs and take-out containers.

At the end of October, International Paper – a manufacturer of corrugated cardboard packaging and pulp – said it absorbed an additional $ 50 million in supply chain costs for its export operations in its final quarter, a reported CNBC. (November 6)

Rick Williams, Operations and Supply Chain Practice Leader at JPG Resources found a shortage of cardboard and some film structural components as factories were limited in establishing new business. “Some of the shortages we are seeing could take about a year to resolve,” he said. The Food Institute.

Plastics

In addition to corrugated cardboard, sourcing plastic bottles and caps has been a recent challenge for Mitch Dingwall, Senior Director of Product Innovation at Golden State Foods, “although the situation has improved and is no longer a major concern,” he said. The Food Institute.

Resins – the key building blocks of a variety of plastic products – have been scarce since a rare ice storm in Texas earlier this year destroyed a significant chunk of production capacity and pushed prices up to 30- 50%, reported Dive into the supply chain. (September 2)

Global supply chain issues also make it difficult for companies like Procter & Gamble to obtain recycled plastic for more sustainable packaging initiatives.

“There is simply not enough recycled plastic available to meet the commitments that have been made not only by P&G, but also by our peers and the industry,” said Jack McAneny, vice president of Global Sustainability. Reuters. (Dec 3)

Aluminum

The aluminum shortage still echoes the peak period of the pandemic in 2020, when the storage of good canned goods intensified, dark breweries switched from kegs to cans and closures catapulted the popularity of ready-to-eat products. drink like hard salt.

With demand – and costs – continuing to rise, Ball Corporation is increasing the minimum order for its preprinted cans by a factor of five, effective January 1. , reported CNN. (November 27)

“The shortage of aluminum cans is an indicator of the packaging consolidation allowed by the financial sector as well as the costs and complexity of setting up production plants,” said David Pring-Mill, consultant in technological start-up. The Food Institute. “The most negative impact is being felt by emerging food and beverage brands that have mastered their digital channels and are poised to grow. “

Glass bottles

A shortage of glass bottles is also putting significant pressure on the wine and spirits industry. Like The Financial Times reports, a central cause – beyond manpower issues and logistics issues – is robust demand.

Spending on alcohol increased nearly 13% for wine and 14% for spirits between the first quarter of 2020 and the third quarter of 2021, according to data from the Bureau of Economic Analysis.

The shortage is forcing some winemakers to age wine in wooden barrels for too long, which can lead to the drink tasting “like a sawmill,” said Phil Long, owner of Longevity Wines. Business intern. (October 19)

The cost of the glass is up 45% from 2019, along with the prices of almost all of the products needed to bottle wine.

Many wineries have held up to the price hike so far, but it’s unclear how long the winemakers can hold out. “Glass is a primary ingredient for bottling wine,” Long said. “Imagine you are a cookie company and there is no flour. “