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Management Side
2022 in Review: The Label Industry

I know you're supposed to take time at the end of the year to reflect on everything that happened. The good, the bad, what have you. But for the labeling industry, 2022 was in a league of its own.

Anything that could go wrong, did go wrong. And in spectacular fashion, too (Yes, Murphy's Law was a reality, ask anyone dealing with paper).

The dismal availability of key raw materials left paper mills scrambling just to get by (and unfortunately, not all of them did).

Here's a look back at the 2022 events that left the label industry hoping for a better new year:

The UPM Strike

Ringing in the new year is meant to be an optimistic time. This event...was not that. The UPM strike kicked off January 1, 2022 and set out to be the longest strike in Finnish workmen's history. Did we mention it subsequently put the global paper market in immediate panic mode over supplies?

Email warnings of shortages were welcomed about as much as spam. Coverage of the ongoing unresolved negotiations was being watched with the same energy as the World Cup finals. We came so close to a global paper shortage catastrophe that a group of national label associations had to step in like referees.

And the effects were ongoing! We felt the ramifications from this strike trickle down throughout the entirety of 2022. Yikes!

Looking to read more? Click here.

A Paper Shortage on the Way?

The UPM strike was like the song that never ends. It went on and on and on for 112 days of grueling anxiety until the world (well, at least the paper industry) could breathe again.

But it wasn't all champagne bubbles and party poppers after things settled down. Some of those machines hadn't been run in months. Think about it: you're not gonna race your car after not starting the engine for 4 months straight.

And without production operating at top speed (like paper mills kinda have to), supplies went down the drain fast. Even with machines starting operations the day the strike ended, it would take months to bounce back from the devastation of not having product.

What's an industry to do but expect a paper shortage from that?

Looking to read more? Click here.

The State of Paper Mills

If you've been paying attention to anything going on with paper mills over the years (I'm not expecting many to nod their heads to that), you'd know things have not been great. Alright, alright, they've been downright awful.

It makes sense, though.

But it's not just one or two issues. Several major changes have all contributed to supply problems and they've been ongoing for decades:

  • Price increases
  • Demand fluctuations
  • Low profits
  • Mill closures
  • Difficult barriers of entry

Whoever said workers in the paper and label industries had it easy was dead wrong. Oh wait, no one said that? Okay, good.

Looking to read more? Click here.

Pixelle's Devastating Announcement

It wasn't the Beatles splitting up. Or One Direction (or maybe both, your music tastes can be eclectic like that). But it still had us crying, "No, say it isn't so!"

When Pixelle announced they would be closing their Androscoggin mill in Jay, Maine, it sent a shockwave through the North American market. I mean, losing 20-30% of paper release liner will do that.

The mill's pulp digester exploding in April 2020 can lend some insight to why things went south for the once vertically integrated paper mill. Yeah, it's hard to come back from that, especially when you don't rebuild such key equipment.

The only reprieve from this news is that the mill will remain open until April 2023. I guess we have to accept small victories? (If you can call it that)

Looking to read more? Click here.

Paper Release Liner Shortage

If you read the above section (I'm hoping you did, this would go a lot easier if you did), you won't be surprised to know the Pixelle mill closing is exacerbating the shortage of paper-based release liners.

If being short on paper material was a new trend, we all would've been seated at the popular kid's table this year. So what's an industry to do in such dire conditions? Look for something else, of course! (Spoiler alert: there aren't many options here)

As paper became harder to obtain, what material did we thank for coming to save the day? PET release liner.

Thank goodness PET is the closest alternative to paper liner; that's why it became the go-to option. Plus when you have companies like Avery announcing PET liner is more readily available to buy, you know you better take this paper liner shortage seriously.

Looking to read more? Click here.

Market Shift from Plastic to Paper

Rounding out 2022 for events, we can't skip over the makeover paper mills have been giving to themselves. And all for the sake of money, too!

It's because of sustainability - it's everywhere nowadays. And hey, I'm not knocking it! It's good to consider how we impact Mother Nature. As a direct result of greener initiatives, paper mills have been getting in on the action.

Converting machines to handle sustainable materials might take months to complete and millions of dollars to invest, but paper mills are going all in. And why wouldn't they do this? Mills have been dealing with the worst conditions:

  • Low profits
  • Price increases
  • Fluctuations in demands

Gotta follow the money trail, I guess.

Looking to read more? Click here.

2023 Predictions

In a nutshell, 2022 was a dumpster fire that the label industry is still trying to put out.

Do we even want to make predictions for 2023? Sure, let's talk about it!

While supply chain issues are still occurring, their impact has been dwindling to fewer and fewer instances. We should continue to see things continue to resolve as we keep running toward the finish line of pre-pandemic conditions.

However, don't be surprised if some situations stay the same or worsen for products like paper release liners in the later part of the year.

On a brighter note, we all might be 'green with sustainability' as it continues making waves throughout industries around the globe.

And remember, the label industry dealt with some serious, impactful issues this year and still managed to continue trudging on.

In the words of Paul Rudd, "Hey, look at us. Who would've thought? Not me!"

Alaina D'Altorio is the Content Marketing Specialist at Smith Corona Labels. She explores topics relevant to the paper and pulp industry, including mill closures, material shortages, and supply chain issues. Smith Corona Labels is located at 3830 Kelley Ave, Cleveland, OH 44114. Alaina can be reached by email at daltorio@smithcorona.com or by phone at 216-426-5611.

This article was originally published on the Smith Corona blog. You can find it here.


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