The following excerpt was featured in the FlexPack Voice publication – November / December 2021, Volume 2, Issue 6. The piece, Sudden Storms: Turbulence Defined 2021, Industry Leaders Seek Stability in 2022 was written by Joel Berg and features insights from Nosco President, Craig Curran, and other industry leaders.
Craig Curran expected prices to rise faster than normal in 2021, but the rapid pace at which price increases advanced caught him off guard. The president of Midwest-based Nosco, Inc., a full-service packaging solutions provider, says, “It was just a perfect storm.”
The storm was touched off, in part, by a release of pent-up demand for products as the U.S. began to emerge from strict COVID-19 lockdowns. But it was an actual storm that set prices jumping. A winter ice storm hit Texas in February and knocked out manufacturing plants that make plastic resins, a key ingredient in the supply chain for flexible packaging.
“The first price increases started in late March,” Curran says. “And then it got rolling pretty heavily from late March through June.”
Customers pushed back initially, Curran says. But as awareness of supply chain problems grew, customers largely absorbed the increases, which have ranged between 10% and 20%. He had initially forecast price increases this year of between 5% and 10%.
Flexible packaging has been going along with the general roller-coaster ride, though the industry has experienced its own unique dynamics based on the diversity of packaged products.
Inflation was just one sign of turbulence for a U.S. economy rebounding sharply from the contractions of the COVID-19 pandemic over the past year. Other signs included labor shortages and pinched supply chains.
Growth next year is expected to fall closer to pre-pandemic levels. While the pandemic may be more or less in the rearview mirror, it will have wrought some lasting changes, such as a reliance on virtual communications and a turn to eating more at home.
Read the full article at: Nosco.com/Voice-21