There is no doubt the past couple of years have presented challenges many have never experienced before. It is during times like these we naturally turn to self-reflection and examine our – and our company's - place in the scheme of things. Throughout the past two years, SunDance has remained open as an essential business and committed to our core purpose of existing to solve problems for our clients, employees, and partners, and continuing to live up to our core values every day. We're still facing unprecedented challenges as we look ahead this year and remain committed to our core value of "doing whatever it takes to get the job done".
Current Challenges
The Supply Chain Situation
Like many other industries, the printing industry is facing a supply chain crunch for paper and raw supplies. Right now, over 100 ships loaded with cargo containers are waiting to unload cargo – including supplies critical to the printing industry - off the coast of Southern California. As more dock workers, truck drivers, and delivery workers return to work, the backlog of supplies and raw materials should begin to ease. However, research indicates even if the backlog is cleared, the price of the shipping containers themselves will remain elevated into 2023. This translates into higher prices for ocean freight and affects pricing for the products in those containers, including paper, ink, and chemicals needed for commercial printing and packaging.
In light of these supply chain interruptions, there’s a new push to develop domestic manufacturing and create a degree of independence in the supply of essential goods. North American paper suppliers are stepping up their production to meet the needs of the printing and packaging industry. According to Damien Bradley, Senior VP of Print and Wide Format at Spicers Paper & Kelly Paper, domestic paper mills are full and their operating rates are at all-time highs. Demand is predicted to remain strong and mills are looking at the possibility of increasing capacity. Paper mill Domtar announced they will restart a paper machine at their Ashdown, Arkansas, facility in early 2022 and bring 185,000 tons of uncoated freesheet into the market. Even with this increased capacity, the current supply chain woes are expected to persist well into 2022 and possibly beyond.
SunDance identified potential challenges early on in Q3 of 2021 and began steadily increasing paper inventory for common products. “We are fortunate to be in a position to purchase and inventory paper, film and label products for our clients and minimize the supply chain impact on their business. Our raw goods inventory is up over 200% in just 6 months, and we are continuing to search and purchase stock as it comes back on the market. Some suppliers have enacted allocations based on previous purchase history and then other suppliers won’t even take on new customers. We don’t want to turn away new customers and we are taking the necessary precautions to safeguard SunDance as well as our clients,” explains JohnHenry Ruggieri, President, SunDance.
Continued Sustainability Initiatives
Moving into 2022, the trend for sustainability initiatives is expected to grow. Pushed by consumer demand, companies from the food and beverage, cosmetics, CPG, and other industries are looking for ways to reduce waste and promote more sustainable packaging options.
A recent survey regarding sustainable packaging revealed that millennials feel it’s “extremely important“
or “absolutely essential” that product packaging has a sustainable lifecycle, is manufactured with less energy, and is transported efficiently. In light of this, many brands are moving away from glass, metal, and rigid plastic containers to lightweight packaging materials like paper, cardboard, and flexible packaging. These lightweight packaging materials may be manufactured with less energy and transported more efficiently than glass, metal, and rigid plastic. One drawback to flexible packaging has been that they are harder to recycle. To combat this problem, companies like Hefty® have started recycling initiatives of their own. Thus far, the Hefty® EnergyBag® program has diverted over 1300 tons of hard-to-recycle plastics from local landfills since April of 2021. Programs like these demonstrate that sustainability is a growth industry and not a fad.
Personalization Is On the RISE
As millennials step into a buying role, they want to connect on an individualized and more personal level with brands in a meaningful way. Any marketing materials, such as direct mail and packaging, that can offer a more personal customer experience will take front and center. Companies like Coca-Cola and Ford Motor Company have used personalized marketing campaigns with great effectiveness. In 2012, the Coca-Cola Company created the wildly successful “Share a Coke campaign.” and encouraged people to seek out personalized Coke cans. This drove sales, encouraged a “scavenger hunt” and created a social media buzz driven by the customer. More recently, Ford Motor Company took personalization to the next level and boosted their extended service contract sales by more than 35% when they targeted a direct mailing campaign to specific users with pinpoint accuracy. The direct mail piece they created went beyond the customer’s name and included targeted images to create a hyper-personalized direct mail piece unique to each recipient. Successful, personalized campaigns like these are expected to continue into 2022 and beyond.
Looking Ahead
Moving forward into 2022, SunDance believes the printing and packaging industry - along with most other sectors - will continue to face both challenges and opportunities for success. While parts of the transportation situation will improve, ocean freight and shipping delays will continue to negatively impact the supply chain. With the push to develop domestic manufacturing and create a degree of independence in the supply of essential goods, there may be light on the horizon. We are confident there will be a resurgence in sustainability initiatives for CPGs and other brands on the branding front. And, as brands look to offer a closer, more personal customer experience, hyper-personalization with marketing materials including direct mail and packaging will take front and center. Forward-thinking printers and converters have processes and supply chains established to provide reliable, fast turnaround with sustainable or very customized solutions and will position their clients for success in 2022.
