World Protective Packaging Report

Protective packaging, such as polystyrene
packing peanuts are projected to rise in
price over the next three years.

Modern Materials Handling reports that Cleveland-based market research firm The Freedonia Group, Inc. has released a report citing an expected 6.3 percent growth in the global demand for protective packaging through 2016.

The report, entitled "World Protective Packaging," outlines the excepted growth in demand for protective packaging (including polystyrene) in six different global regions, North America, Western Europe, Asia/Pacific, Central and South America, Eastern Europe and Africa/Mideast.

Global demand for protective packaging is expected to top $24 billion by 2016 with North American demand reaching $6.9 billion.

What this means to the end user

Well, as Alfred Marshall explained in his 1890 publication of "Principles of Economics," when demand for a product or service goes up - so does the price.

The increase in urbanization and Internet commerce in the coming years will, according to the study, drive the demand for both traditional polystyrene packaging and newer eco-friendly packaging products.

Preparing for cost increases

The old adage, "knowledge is power," still holds true. By understanding the market and planning ahead, business owners can help take the sting out of future cost increases.

Plan ahead for future costs by closely monitoring your packaging needs today and comparing them to your past needs. Take a look at the last three years. How did your needs change?

There is a good chance that you will have similar changes over the next three years. Armed with this knowledge, you can create a plan of action.

How to keep costs down

• Don't wait until you are low on or out of your packaging materials before you order more. If you wait until the last minute, you don't have any time to negotiate for a better deal.

• Buy in bulk. When you find a great deal on a product that you use a lot of, don't be afraid to buy double or triple your normal order. The upfront costs will be higher, but the long term savings will be worth it.

• Talk to your packaging supply salesperson. Since your salesperson is directly involved in the packaging business, he or she can help you look at your needs and develop a solid plan for the future.