Wrapped up: Even paper is caught in the holiday season's supply-chain fiasco

Paper prices shot up by 50% YoY this August.
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Artifact Uprising

· 4 min read

Most shoppers right now are focused on finding gifts, worried that the perfect present might not be available a few days from now. Wrapping is an afterthought. But that doesn’t mean paper hasn’t been plagued by the same supply-chain issues taking over the holiday season.

“Raw materials such as wood and paper are continuing to be materials that we have to order early and often to stay ahead of our needs,” said Anna Westerholm, chief experience officer at Artifact Uprising, an online retailer of photo books, photo cards, prints, and gifts. “Anything ordered from overseas has had long delivery times.” She added that the company started ordering materials like paper back in April this year to stay ahead of potential delays.

  • Ocean shipments across all goods took an average of 73 days to get to the US from China in September 2021, 83% longer than in September 2019, according to digital global shipping marketplace Freightos.

Better watch out: Wisconsin–based Waldan Paper Services has been manufacturing gift wrapping paper and other paper products for 30 years. While the company saw a slowdown in its business last year, largely due to the uncertainty around the pandemic, this year, retailers were placing orders months ahead of time, Kristin Manteufel, the company’s director of sales, told Retail Brew. “We’re anticipating a rebound,” she said. “This year, we did more wrapping paper than we have in the past two years.”

That doesn’t mean all retailers are prepared.

“I’ve already had some inquiries from clients we don’t normally work with, saying, ‘Hey, I’m looking at a program for next year already. What would you be able to do for us?’” Manteufel said. She also anticipates last-minute orders in the coming weeks with retailers offering to pay a “rush fee.”

“We usually see [these kinds of requests] around Black Friday, where we get people that are just beside themselves, asking ‘Can I pay extra? I don’t have enough, or I don’t have what I need,” she said. “I’m anticipating some more of that rush here in the next few weeks as well.”

As it goes with high demand and short supplies, not only is securing wrapping paper going to be difficult, but anything available is going to be $$.

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While bigger businesses may be able to absorb the hit, smaller ones will have a tougher time, said Matt Britton, CEO of market research platform Suzy.

“It’s really going to impact small businesses because they’re either going to not have the product, or they’re going to be exorbitantly expensive and [they’re] not even going to be able to come close to competing with these large companies,” he said.

Meanwhile: Many companies have also relied on outsourcing paper from overseas. One reason is that it’s cheap(er), but another is that there aren’t enough “capabilities” for production stateside.

“Not a lot of companies have reinvested into manufacturing wrapping paper in the United States,” Manteufel said. “It’s one of those markets where there’s less and less capability in the US than there is in China or India. And that’s mainly because of costs.”

But...that might change. With supply-chain disruptions likely to carry over to the next year, some manufacturers might consider bringing the production back to the US, Britton said.

“When you have inflationary conditions, it means that it’s harder to get things as quickly as you want, because your dollar doesn’t go as far, especially on a global basis,” he explained. “You’re going to start to see a lot of American manufacturers create products within the country. That’s going to come at the cost of the prices of those products being dramatically higher.”

Moving production to the US is not a solution that can be applied overnight. So, to deal with the paper shortage in the interim, companies will have to get creative in terms of sourcing.

Artifact Uprising, for example, said it has been able to avoid major issues by switching to working with multiple suppliers and placing inventory orders in advance.

“We just need to keep doing what we are doing—checking in with vendors every day, ordering early and often, finding substitute materials or replacement products,” Westerholm explained. “When we go out of stock in something, we have a plan B and C to handle it so that it impacts the customer as little as possible.”

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.