Where to Find New Sales Opportunities in the Packaging and Labels Product Category
The past year has been a series of rugs pulled out from under everyone. You’d be hard pressed to find someone whose business wasn’t impacted in some way. But, if you start asking around, you’d find that the ones who came out of this in the best positions were the ones who adapted—the ones who recognized an open window when a door shut.
In the print and promo industry, plenty of doors shut. Windows opened, however, if you knew where to look. And the packaging and labels product category was one such area. As the pandemic changed the way people shopped and the products they were buying, customers that may not have needed packaging and labels before were suddenly calling up distributors asking for help. That created opportunities that should last long after the pandemic ends. Here’s where to find them.
Challenges and Opportunities
The initial work-from-home phase was supposed to be something like two weeks. A year later, there’s probably more than a handful of travel thermoses or phone chargers collecting dust in cubicles and on desks. The idea that this would last more than a year seemed crazy at the time. But that work-from-home revolution created new business opportunities in packaging.
Businesses needed to keep in touch with their employees and not only give them what they needed to execute their tasks from home, but also make sure they know that they’re a valued member of the team, even though they can’t see them face-to-face.
“We found that our pillow boxes in particular were used more than ever because of people working remotely,” said Phil Martin, MAS, national sales manager for Warwick Publishing Co., St. Charles, Ill. “The mothership, or home office, wanted to keep in touch in various ways. They used packaging to get it out to them.”
For new employees who might’ve been hired during the pandemic (after a series of no-doubt stressful Zoom interviews), employers needed to make them feel welcome without being able to physically greet them at the office.
“We saw a lot of increases in what we’d call welcome kits, as well,” Martin said. “During the pandemic, there was still some hiring going on and things happening.”
Other opportunities have emerged, too. Recreational cannabis is, as of now, legal in 16 states. That has become a huge part of the print and promotional products markets, as newly-opened dispensaries need to compete against one another with signage and advertising. These customers need ways to package their products, and everything needs to be labeled properly. In addition to recreational cannabis, the CBD market is booming, as people use it for its recovery properties and non-psychotropic nature.
That continued growth in the CBD and cannabis markets has been a boost for suppliers and distributors who specialize in packaging and labels, with new clients hitting the market all the time. “We’ve seen a lot of increase in the CBD packaging industry,” said Arsi Seradarian, CEO of Pacobond Inc., Sun Valley, Calif.
Products like packaging for oils, jars for cannabis gummies and warning labels on the outside of all of the products have been popular in the industry, both Martin and Seradarian said.
The market to watch, of course, is trade shows. Some states allowed in-person events to continue before others, and an increasing number of shows are set to return in the second half of 2021. But uncertainty and inconsistency—such as varying rules from state to state and constant changes due to the virus—have made it challenging.
“Before the pandemic, it started to pick up for trade shows,” Martin said. “If you promote a client, and they want mints or pens or various promotional items at the trade show, you ask how they’re packaging it. ‘Why don’t you put it in a nice tuck box or pillow box where you get a nice four-color print? You can put all kinds of nice information on there.’”
“I’m seeing a lot of shows coming back,” Seradarian said. “It’s a good sign for us, not only for us to participate, but for us to sell products like packaging for other suppliers to use.”
The absence of trade shows has led to innovation, as suppliers look to provide solutions for companies in need of other ways to get their name and logo out there. Seradarian said that her company has had tremendous success in providing printed e-mailers for self-promos. The product line was so successful, in fact, that Pacobond invested a substantial amount of money in new flatbed printers and cutters.
“It’s a huge amount of money that we invested,” she said. “We’re ready, and now we’ve started doing those e-mailers, and it’s working really, really well. That’s one of the products we introduced at the PPAI show in January. Based on that, we’re getting a lot of orders, not only for products but for self-promotions as well. Marketing companies are ordering boxes to put marketing materials and samples in it with gifts and giveaways and things like that.”
The restaurant and hospitality industries were two of the most visibly impacted markets in the U.S. Restaurants had to do their own pivots by offering to-go drinks, which typically featured some kind of branded label, and to-go food. Because of that, Debbi Ulmer, marketing director for Discount Labels, New Albany, Ind., said that the restaurant industry was a saving grace for her company during the last year.
“From a label perspective, we did see a big increase, especially for food—food and anything social-distancing-related,” she said.
“We did another pillow box, interestingly, where they put a burrito inside of the pillow box,” Martin said. “And then halfway through the box, it’s perforated, where you’d tear it off and use the actual bottom half of the box to hold your burrito while you eat it.”
Since people weren’t going to the bar, it meant they were buying drinks to make and enjoy at home. That led to an increase in label and packaging orders for beer, wine and spirits.
But one of the most surprising purchasing booms came from distilleries that used their capabilities to manufacture hand sanitizer. You probably remember this time last year, when hand sanitizer was more valuable than gold.
“We saw distilleries pivot almost immediately and develop sanitizer, which was very controversial, but we have a couple of customers we work with who did it the right way, who actually went through the FDA approval process and everything, and pivoted their business to start making hand sanitizer,” said Ulmer. “That was probably the most surprising one.”
After a year mostly spent inside, consumer habits are changing. People are ordering online more than ever, and even once bars and restaurants are back open at mostly full capacity, some people might prefer to grab some takeout and stay home.
“I think you’re going to see things go back to normal for people who are more social, maybe who are in the single life, that sort of thing, but I think people have in some ways enjoyed this and it’s changed their lifestyle,” Ulmer said. “I think it won’t completely go back to the way it was before.”
That means that labels and packaging for beer, wine and spirits, and special labeling for takeout cocktails, should remain.
And some companies might have realized that remote work is just as effective as in-person models. But, for the ones that do bring employees back, they’ll probably want to at least acknowledge the happy situation, Martin said—things like a welcome-back gift kit on their desk just to show appreciation.
He also said that the hospitality side of this industry, as it recovers, might skew toward more boutique hotels that can provide a more personal experience—products like hand sanitizer, masks and maybe a tool to open doors or press elevator buttons waiting for you inside of your hotel room.
The pandemic appears to have created opportunities for other label and packaging applications, too. With more consumers buying online and consumer packaged goods sales up, brands want their products to stand out.
“I think premium labels, premium inks, stocks, finishes, I think we’re seeing a lot more of that,” Ulmer said. “People are being a lot more creative with their packaging. So that could be the use of foils, foil simulation, hot stamping, embossing—we’ve got tactile varnishes, so like a 3-D-type varnish, soft touch, which is kind of a peachy. It’s all very tactile but not in the sense that it’s 3-D. I think it’s appealing to multiple senses. “
“I think in our industry we’re realizing that we’re missing out on an opportunity to have more advertising to go along with the item you’re sending,” Martin added. “It jazzes it up, and it also adds a little [more] perceived value than just a tumbler in a plain white box.”