Packaging disruptions: Supply chain pressures force design changes in US as e-commerce grows

13 Jul 2023 --- R.R. Donnelley & Sons Company (RRD) has released its 2023 (Un)Packaging Reality Report, revealing that supply chains and market conditions in the US are stabilizing despite recent challenges. Following last year’s edition, this second release of RRD’s annual report investigates how brands navigated last year’s market pressures and supply shortages to meet consumer demands.

Lisa Pruett, president for Packaging & Labels at RRD, tells us that while brand decision-makers have seen market conditions improve since the COVID-19 pandemic, they have still faced continued supply chain hurdles that impacted how they selected their packaging and labels. 

“What’s specific to packaging is that 72% of organizations were forced to make changes to existing package design. Of those, nearly three-fourths of respondents made selections to minimize cost and 60% altered designs for efficiency and cost reductions in transportation, which was a common response to supply chain issues.” 

Ongoing supply chain issues
Respondents reported easing concerns around products, packaging materials and transportation in the latest study, as well as other signs of improvement in market dynamics. Concerns regarding staffing challenges, capacity demands and market speeds also decreased compared to 2022 reporting.

Ninety percent of respondents agree that sustainability is key for packaging and label decisions. But supply chain conditions – compounded by other market pressures – faced challenges. Down slightly from 2022 figures, the vast majority (87%) of respondents still said that disruptions to the global supply chain caused their organization to change how they sourced packaging and labels. 

Due to continued supply chain hurdles, more respondents plan months ahead while fewer plan just weeks in advance compared to 2022 figures.

E-commerce fuels demand
The number of respondents seeing increased e-commerce orders increased slightly compared to last year’s report. Of the 60% of decision-makers citing an increase in e-commerce orders over the past year, the proportion who saw an increase in packaging needs (92%) remained consistent year-over-year. Additionally, 86% reported an increase in labeling needs. 

Pruett explains that e-commerce customers have fewer touchpoints with a brand than the in-person shopping experience, making it important to maximize the impact with packaging that makes an impression. 

“One trend that’s grown out of e-commerce is the adoption of the ship-in-own-container (SIOC) concept, which helps brands and online retailers eliminate the need for secondary packaging with a shippable, branded container,” she says.

“With SIOC packaging, a single box is used to protectively store and display the products, which reduces waste from secondary packaging. Not only is this a win for sustainability, it centers the unboxing experience by maximizing the branded real estate of the package.”

Furthermore, the majority of packaging and labels specifiers had to adapt their selections to meet shifting consumer needs. Among the most reported responses, 74% changed materials based on availability for packaging, up 22% from 2022, and 64% did the same for labels. 

Up slightly from last year’s report, the report finds that 37% of respondents developed e-commerce-specific package design and structure. Half responded by increasing inventory and 39% boosted support from external vendors. 

Designing for sustainabilityPruett highlights that when designing packaging for sustainability, the goal is material reduction to avoid landilling. 
The report also reveals that the vast majority (90%) of respondents agree that environmental sustainability is a key consideration in packaging and label decisions. 

Pruett highlights that when designing packaging for sustainability, the goal is to minimize material that will end up in landfills, without negatively impacting product protection, branding and manufacturability. 

“Compromising those factors will only result in more post-consumer waste. A majority of respondents (72%) prioritized reduction of material waste while 66% prioritized material recyclability and half prioritized inclusion of recycled material,” she asserts.

“At RRD, we often consider if the size of packages can be reduced and if we can lower the weight of the material. Losing just 5-10% of material weight in the package can equal a significant, positive impact across an entire truckload of incoming and outgoing material.”

The company predicts that “more progress may be on the horizon,” with two-thirds reporting they will likely make sustainability-led changes in the next two-to-five years. While 49% of respondents said they are measuring environmental impact – a decline over last year – 38% acknowledged they are not currently but plan to in the future. 

Also, less than half (48%) strongly agreed their brand’s packaging could be easily and widely recycled across the US, making the prioritization of recyclability an important factor to watch.

By Natalie Schwertheim