What we know:
- The paper bag industry over the past 40 years has steadily shrank due to the uptick in plastic bag usage. The decline saw many companies either shrinking their businesses, selling to larger companies, or just closing their doors.
- For many years, the industry was on a level playing field with supply being just a bit higher than demand.
- Just like it took some time to come to this point, it will take time for the industry to bounce back.
- Demand is outweighing available supply throughout the country. This Increased demand is impacting all major paper bag manufacturers.
Why has the demand for paper bags grown?
- Negative image of plastic bags resulting in customers seeking cost effective disposable alternatives.
- Markets where paper bag usage was small to none, have grown.
- Growth in retail and foodservice sectors.
- Manufacturing/equipment issues – lead time on new machines to create new product is more than 1 year.
- Increased and/or implementation of taxes/ fees and bans on plastic bags globally. According to an ABC News report:
- 3 states with plastic bag bans take effect 3/1/20. (California, Hawaii (all counties), New York)
- Approximately 200 US municipalities have banned or taxed plastic bags.
- 4 states (Delaware, Maine, Rhode Island, New York) have mandatory recycling or reuse programs.
- 32 countries have passed plastic bag banning laws.
How we are working to solve this problem?
In 2019, Duro expanded capacity and shipped 20% more product to address increased demand. Now, in 2020 there was a review and streamlining of production which is gaining another 5% from existing equipment, as well as an addition of 6 more bag making machines are coming on stream in the weeks ahead. Additionally they are adding new machines, increasing labor force, developing manufacturing efficiencies, running their existing machines round the clock to keep up with demand, and not selling product to those customers who have not been regularly buying product over the years in an effort to support their loyal customer base.
RJ Schinner is working to establish new partnerships with suppliers who can fill the gaps left by our domestic partners for the above-mentioned reasons. Our top priority is to ensure we are meeting our customers’ needs and are providing them with a product that is equal to or better than what we have been able to previously offer through our current suppliers.
Sources: ABC News, Drew Weems, Director Commercial Paper Sales Midwest: Bagcraft, Duro, De Luxe Packaging, Novolex