Folding Paperboard Boxes, Including Sanitary

SIC 2657

Companies in this industry

Industry report:

Establishments in this industry are primarily engaged in manufacturing folding paperboard boxes from purchased paperboard, including folding sanitary food boxes or cartons (except milk cartons). Products include folding paperboard boxes such as cereal boxes; folding cartons; frozen food containers; ice cream containers; folding sanitary food pails, such as those used for takeout food from restaurants; and paperboard backs for blister packages.

Industry Snapshot

In the late 2000s, the folding paperboard box industry was recovering some of the ground it had lost in earlier years of the decade. According to the U.S. Census Bureau, the value of folding paperboard box shipments in 2007 reached $11.3 billion, a considerable improvement from the figures that ranged from $8.0 billion to $8.6 billion in the early to mid-2000s.

Plastic continued to be a strong competitor for the paperboard box industry. Some industry experts predicted, however, that a backlash against disposable plastic products could revitalize the use of paper products in the future.

Organization and Structure

Folding box manufacturers have expanded production of high-quality, high-whiteness boxes suitable for four color process printing. Better visual appeal of such packaging often translated into higher impulse purchases by consumers, and folding boxboard customers often would pay a premium price for goods so boxed.

However, unlike its corrugated container cousins, the folding paperboard box faced direct competition from alternative materials, principally the bewildering array of plastics. The growth of flexible bags, pouches, and wraps, as well as rigid carriers and containers made from plastics, created a serious challenge to the dominance of the folding paperboard box in the packaging marketplace.

Folding paperboard boxes also faced competition from other paperboard products. In some retail applications, corrugated products and carded "blister packs" (paperboard backings that hold a molded plastic insert) were used as a substitute for paperboard boxes.

Sales in the folding carton industry are traditionally seasonal. The industry typically starts the year strongly after a slump in sales during December. Sales usually slow down slightly from April to July and then rebound from August to November before slowing down again in December.

Improved strength and lighter weight folding boxboard helped to raise the competitive position of folding paperboard boxes in the packaging marketplace. Folding paperboard boxes also benefited from the fact that they were recyclable and contained recycled fiber. Both of these attributes were actively promoted on retail packages.

The growth of food-related packaging and other retail applications helped expand the retail market for folding paperboard boxes. The increased use of folding boxes as beverage carriers helped fuel growth in folding paperboard box sales. Both beer and soda bottlers began using 24-can "cases" as promotional vehicles in the mid-1990s. As a result, more of those products were sold in folding paperboard boxes and fewer in the traditional six-packs held together by plastic carriers. In addition, boxed wine enjoyed a resurgence in the mid-2000s, driven in part by the container's ability to withstand oxidation and remain fresh, a characteristic lacking in bottled wine. According to ACNielsen, boxed wine was the fastest-growing segment of premium wine, with sales that skyrocketed 70 percent between 2005 and 2006.

Starting in the mid-1990s, the use of paperboard packaging (and other forms of packaging) was criticized as being inherently wasteful. Manufacturers were encouraged to reduce or eliminate packaging for their products. The folding boxboard industry and other sectors of the paper and paperboard industry responded by increasing the amount of recycled fiber used in their products. This successful campaign led to the paper industry recovering 47 percent of the paper and paperboard produced in the United States in the late 1990s, up from just 28 percent in the mid-1980s.

Production of the raw material for folding paperboard, or folding boxboard, boxes grew steadily in the late 1990s, when the United States produced 6.66 million tons of folding boxboard annually. There are three grades of U.S. folding boxboard: solid bleached sulfate (SBS), which is bleached white for high brightness; unbleached kraft, which retains the natural brown color of paperboard; and recycled. Of the 6.66 million tons of folding boxboard produced in the late 1990s, 2.86 million tons were recycled folding boxboard (43 percent); 2.14 million tons were SBS (32 percent), and 1.66 million tons were unbleached kraft (25 percent).

SBS is favored by manufacturers of folding paperboard boxes for the packaging of cigarettes, frozen and wet foods, meats, nonprescription drugs, bakery foods, and cosmetics. These manufacturers appreciate its superior visual and performance characteristics. After falling out of favor in the early 1990s, SBS staged something of a comeback later in the decade, when production of SBS grew to 2.14 million tons, while recycled boxboard was steady at about 2.85 million tons. Growing demand for SBS can be attributed to demands by domestic packagers for better graphics on their packages and growing export demand for SBS.

Recycled folding boxboard, which was the leading folding boxboard grade, was an environmental success story for the industry. The success of this grade was due to several factors, including the tremendous interest in recycling. Nevertheless, most industrial users were unwilling to accept an inferior product simply because it was more environmentally friendly. Better recycling procedures and improvements in strength, formation, and surface coating have allowed quality recycled clay-coated board to compete in several markets from which it was previously excluded.

In 2005, the U.S. folding paperboard box industry was made up of 438 manufacturers, down from 582 in 1997. By 2007, only 526 firms participated in this industry in the United States, according to U.S. Census Bureau figures.

Current Conditions

In 2009, Dun and Bradstreet reported that New York led the nation in sales in this industry, with $135 million. Ohio had $123.6 million in revenues and California, $96.7 million. California also had the highest number of establishments in the industry, with 33, followed by Illinois with 22 and New York with 21.

Plastic continued to outsell paper products in the late 2000s. Although the U.S. demand for food containers was projected to reach $23.5 billion in 2011, plastic was expected to grow faster than its counterparts. The Freedonia Group projected that U.S. demand for plastic rigid food containers will reach $4.5 billion in 2011, an annual growth of 11.1 percent from $1.9 billion in 2001. Paperboard food containers, on the other hand, were expected to climb only moderately, increasing roughly 1.5 percent per year.

Increased interest in environmental sustainability, however, may suppress the growth of plastics. By the late 2000s, several municipalities in California had restricted the use of plastic and polystyrene foodservice containers by restaurants, and by 2009 several had banned plastic foam packaging. Manufacturers of paper containers eagerly touted the perceived environmental advantages of their products. "Without question, paperboard packaging has distinct advantages over alternate materials when it comes to sustainability," said Jerry Van de Water, president of the Paperboard Packaging Council, in Paperboard Packaging. "Paper is both a renewable and recyclable resource."

The importance of the trend toward recycling in the paperboard box industry was increasingly evident as the first decade of the twenty-first century neared a close. For example, by 2009 more than 150 American companies had signed agreements with the 100% Recycled Paperboard Alliance (RPA-100%) that granted them the right to use the RPA-100% symbol on their packaging. In mid-2009 18 well-known brands, including Nestle' Purina Petcare and Snyder's of Hanover, joined the list of firms using 100 percent recycled packaging for their products. According to Mike Kiepura of the RPA-100%, "This high number of new licensees proves that today's brand owners are increasingly interested in communicating to their customers that the products they are purchasing are packaged in 100 percent recycled paperboard."

Industry Leaders

The folding paperboard box industry is highly integrated, with the leading producers of folding paperboard boxes also producing the folding boxboard used to make the product. According to the Paperboard Packaging Council, the top five firms represented more than 60 percent of total industry volume in 2008. These included Graphic Packaging International (which merged with Altivity Packaging in 2008), Rock-Tenn Corp., International Paper Co., MWV (MeadWestvaco) Corp., and Smurfit-Stone Container Corp. Rounding out the top ten firms in the industry were Field Container Company, Caraustar, Simkins Industries, Malnove, and Specialized Packaging Group.

With 61,700 employees, International Paper Co. of Memphis, Tennessee, was the world's largest forest products company in the world in the late 2000s. Paper and packaging accounted for approximately two-thirds of its annual revenues of $24.8 billion. Likewise, MeadWestvaco's (MWV) packaging division brought in about three-fourths of the company's sales, which reached $6.6 billion in 2008. Based in Glen Allen, Virginia, MWV employed 22,000 workers. Chicago-based Smurfit-Stone Container, which had $7.0 billion in annual revenues and 21,300 employees in 2008, filed for Chapter 11 bankruptcy in early 2009. Finally, although smaller than the other industry giants, Rock-Tenn of Norcross, Georgia, continued to hold its own in the industry, earning more than $2.8 billion in 2008 sales with 10,700 employees.

America and the World

The folding paperboard box industry has traditionally imported more than it has exported, a trend that continued into the late 2000s. According to Supplier Relations US LLC, in 2008 the United States imported $600 million worth of folding paperboard boxes. Value of exports, on the other hand, was only $340 million. Part of the reason for the low export rate in this industry is that it usually makes the most economic sense to export folding boxboard in sheets or rolls and then convert them into boxes locally. Many U.S. folding paperboard box manufacturers operated sites for foreign conversion for this reason.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

News and information about Folding Paperboard Boxes, Including Sanitary

Monthly sector analysis: this sector analysis includes acquisitions and buyouts announced during march. uk public offers completed between these dates are included, whereas new and pending offers are excluded. the transactions are classified according to the us sic code identifying the industry sector in which the target company is principally engaged.(Illustration)
Acquisitions Monthly; April 1, 2003; 700+ words
...00 26-Mar-03 Inc (US) - Manufacture Invest holding company printing, writing paper 2657: Folding paperboard boxes, including sanitary Graphic Packaging Intl Riverwood Holding Inc 430.00 26-Mar-03 Corp (US) (US) - Manufacture...
Monthly sector analysis.(Illustration)
Acquisitions Monthly; February 1, 2003; 700+ words
...wholesale Leverage buyout firm 188.00 17-Jan-03 window units 26: PAPER AND ALLIED PRODUCTS 2657: Folding paperboard boxes, including sanitary Cartem Wilco Group Inc Rock-Tenn Co (US) - (CA) - Manufacture Manufacture recycled folding cartons...
Monthly sector analysis.(Illustration)
Acquisitions Monthly; February 1, 2003; 700+ words
...units 26: PAPER AND ALLIED PRODUCTS 2657: Folding paperboard boxes, including sanitary Cartem Wilco Group Inc Rock-Tenn Co (US) - (CA) - Manufacture Manufacture recycled folding cartons paperboard 65.52 20-Jan-03 27: PRINTING, PUBLISHING...
Monthly sector analysis: this sector analysis includes acquisitions and buyouts announced during march. uk public offers completed between these dates are included, whereas new and pending offers are excluded. the transactions are classified according to the us sic code identifying the industry sector in which the target company is principally engaged.(Illustration)
Acquisitions Monthly; April 1, 2003; 700+ words
...holding company printing, writing paper 2657: Folding paperboard boxes, including sanitary Graphic Packaging Intl Riverwood Holding Inc...Manufacture - Manufacture, paper products; wholesale paperboard holding company packaging 2671: Packaging paper...
Producer Price Indexes-September 2014
PPI Detailed Report; September 1, 2014; 700+ words
...packaging uses Paperboard 0914 Corrugated...0915 products Sanitary paper products, 0915-01 including stock Sanitary paper products...0123 12/99 including stock Sanitary...textiles Paper boxes and containers...83 boxes Folding paperboard...
Producer Price Indexes-April 2014
PPI Detailed Report; April 1, 2014; 700+ words
...packaging uses Paperboard 0914 Corrugated...0915 products Sanitary paper products, 0915-01 including stock Sanitary paper products...0123 12/99 including stock Sanitary...textiles Paper boxes and containers...83 boxes Folding paperboard...
Table 6. Producer price indexes and percent changes for commodity groupings and individual items, not seasonally adjusted.(Part 2)(Statistical table)
PPI Detailed Report; April 1, 2009; 700+ words
...papers 0913-0502 Paperboard 0914 Corrugated...products 0915 Sanitary paper products, including stock 0915-01 Sanitary paper products, including stock 0915...0218 Paper boxes and containers...boxes 0915-0322 Folding paperboard boxes...
Producer Price Indexes-July 2014
PPI Detailed Report; July 1, 2014; 700+ words
...paper & paperboard mills 3221...P Paper, sanitary tissue paper...solid fiber box manufacturing...solid fiber boxes, 322211-0 including pallets Corrugated...322211-S Folding paperboard box manufacturing...Nonfolding sanitary food containers...

Search all articles about Folding Paperboard Boxes, Including Sanitary