Four Trends Shaping the Future of Corrugated

The corrugated market is experiencing a robust period of growth, fueled by a surge in e-commerce, sustainable packaging solutions, and manufacturing innovations. Amidst this flourishing landscape, the corrugated market is facing unique challenges that require the industry to leverage new technologies and implement new strategies.

Through interviews with leading box makers, OEMs, and stakeholders, we have identified and highlighted several key trends heading into 2024. These trends are not only influencing the industry today, but are setting the stage for the industry’s next wave of innovation and growth.

THE SILVER TSUNAMI: INVITING THE NEXT GENERATION OF PROFESSIONALS

The corrugated industry, like many sectors within manufacturing, is grappling with the challenge of an aging workforce. The 2023 Annual Manufacturing Wage & Salary report by the Manufacturers’ Association highlighted that one-third or more of the manufacturing workforce is expected to reach retirement age within the next five years. A significant portion of skilled workers are nearing retirement, creating a knowledge and skills gap that needs to be addressed to ensure the continued growth and innovation in the industry.

To actively address the issue of an aging workforce and attract young talent, companies are implementing a variety of innovative strategies. They are investing in educational programs and internships, partnering with universities and technical schools to provide hands-on experience and a clear pathway into the industry. They are partnering with associations like TAPPI and AICC to help connect them at student events and to student chapters. By promoting a culture of mentorship and knowledge sharing, seasoned professionals are able to pass down valuable skills and insights to the younger generation, fostering a sense of community and continuity.

John McQueary, VP of sales at CST Systems and delegate for AICC’s Emerging Leaders Program, insists that the key to retaining young professionals is to demonstrate a clear path of growth. “I think younger generations still seek out workplaces that value collaboration, where they have clear and realistic goals and a clear path to future promotions,” says McQueary. “My generation doesn’t want things to be easy, but they want things to be clear. If they’re going to be stuck in the same position for years without a clear path up or at least in a different, positive direction, they won’t stay. We want to feel like we’re moving forward and not just treading water. Companies that are serious about hiring and retaining younger workers should have clear job paths for the future, assuming employees hit their relevant metrics.”

This demographic shift is also prompting companies to adopt advanced technologies and automation to not only augment the productivity and efficiency of existing employees, but also to make the industry more appealing to the newest generation of professionals. The integration of digital tools, automation, and Industry 4.0 technologies is playing a pivotal role in transforming the work environment within the corrugated sector. By automating routine and physically demanding tasks, companies are creating safer and more engaging workplaces, which are key factors in attracting younger employees.

RESHORING OPENS DOORS FOR BOX MAKERS

In recent years, there has been a significant shift toward reshoring in manufacturing. Exacerbated by the pandemic and new geopolitical tensions, companies are looking to bring operations closer to home to navigate supply chain uncertainties, avoid international tariffs and transportation costs, cater to regional consumers, and maintain better control over quality standards and production processes. A 2022

Kearney’s Reshoring Index Survey revealed that 96 percent of CEOs considered reshoring, started the process, or had already reshored some operations, which is an increase from 78 percent in 2022. As industries shift their operations domestically, box plants find themselves in an advantageous position to form closer collaborations with these manufacturers. This reshoring movement enables box plants to offer more customized packaging solutions that align with local market preferences, a shift from the one-size-fits-all approach often seen in international operations. The proximity of these plants to manufacturing sites also streamlines supply chains, reducing logistical complexities and costs while enhancing sustainability efforts through shorter transportation routes. Box plants are thus positioned not just as suppliers, but as key partners in the manufacturing ecosystem, contributing to a more resilient, efficient, and responsive supply chain.

THE RISE OF ARTIFICIAL INTELLIGENCE

Amidst global supply chain disruptions, rising inflation and resource limitations, corrugated manufacturers are also using AI’s predictive capabilities to navigate these uncertainties.

The advent of artificial intelligence (AI) is poised to revolutionize corrugated manufacturing, bringing about unparalleled efficiency, precision, and innovation. According to Precedence Research, the global market for AI in manufacturing is expected to hit around US$68.36 billion by 2032, growing at a staggering annual rate of 33.5 percent over the forecast period of 2023 to 2032. By integrating AI algorithms and machine learning models with their existing Industrial Internet of Things (IIoT) software, box plants can truly capitalize on their machine data to optimize various aspects of the production process.

Through predictive analytics, manufacturers can anticipate demand fluctuations, optimize inventory levels, and enhance delivery schedules, ensuring that the right amount of materials are at the right place at the right time. The creation of smarter, more responsive supply chains with AI allows companies to not only mitigate risks from these disruptions, but also to adapt to the shifts in consumer behavior and market dynamics.

AI is being used on the production line to optimize efficiency and minimize downtime. By analyzing machine and plant floor data from an existing IIoT database, AI can anticipate equipment failures before they occur, enabling predictive maintenance, which can save box plants hundreds of thousands of dollars annually. “Unplanned downtime is one of the costliest issues box plants face,” says Greg Jones, executive vice president at SUN. “AI is enabling manufacturers to identify problems before they arise and schedule downtime in a controlled and timely manner. Through machine learning, predictive algorithms continuously improve, leading to larger and larger cost savings over time.”

SOLVING FOR SUSTAINABILITY

The importance of sustainability will continue to grow in the corrugated industry, driven by increasing environmental awareness among consumers. A recent McKinsey & Company survey revealed that about half of US consumers are willing to pay more for sustainable packaging. “Natural paper is increasingly becoming the preferred choice for eco-conscious consumers, driving a trade-up preference within the market,” comments one representative from a large independent packaging company.

Corrugated has long been regarded as a sustainable, eco-conscious packaging choice due to its high rate of recyclability and renewable material sourcing. To further establish themselves as environmental leaders, corrugated manufacturers are increasingly adopting sustainable production processes, focusing on reducing energy consumption, minimizing waste, and implementing more efficient and eco-friendly operations throughout their manufacturing lifecycle.

To accomplish this, box plants are implementing technologies that not only work to protect the environment and appeal to consumers, but are also economically advantageous, as they often lead to significant cost savings over time. For example, numerous corrugated manufacturers are now integrating advanced technologies like automated process control systems and efficiency analysis into their production lines. These systems enable real-time monitoring and optimization of manufacturing processes, leading to significant reductions in energy and water usage. By using smart sensors and predictive analytics, manufacturers can precisely adjust machinery to operate at peak efficiency, minimizing energy waste.

CONCLUSION

The corrugated industry is experiencing an exciting period of transformation. Although there are challenges ahead, corrugated companies are embracing new technologies and innovations to address these challenges and propel the industry forward.

This type of innovation will be on display at SuperCorrExpo^® 2024. SCE is set to be a pivotal event for the corrugated industry, offering an immersive platform to delve into the transformative developments that are currently reshaping this dynamic sector.