Email Jim at jim.thompson@ipulpmedia.com

Or, in other words, would significantly improved quality make for higher profit margins in the pulp and paper industry? Can we make a paper company into the equivalent of Christian Dior or Estee Lauder through quality improvements?

For years, I have stated that the first demarcation when considering the overall paper industry is as follows: papers used for their communications properties and paper (and paperboard) used for its physical properties.

In the former category, we find fine paper, newsprint and other such grades. In the latter, there is tissue, containerboard and packaging.

Back in the heyday of communications papers, my friend George Mead's Consolidated Paper reigned supreme among the high-volume grades. But even George saw the writing on the wall and sold out at the peak of the market to Stora Enso. Newsprint reached its apex with the "USA Today" quality standard.

This is all history.

Today, the one grade that is attempting to differentiate itself with quality is tissue--facial, toilet and kitchen roll towels. There are some other products in this category that strive for higher quality, namely restaurant napkins, but they are made of non-wovens.

The challenge is in the containerboard and packaging areas.

I think the ultimate in packaging today is the packaging used by Apple. It is exquisite, but so are its products (think of the iPhone).

There are opportunities to use Apple-quality packaging if it can be proven cost effective. And by cost effectiveness, I mean the increased cost of packaging results in an increase in revenue stream for the retailer.

Take for instance, chicken pieces at your local grocery store. Typically, they are packaged in a shrink-wrap film with a Styrofoam base. Styrofoam has lost its popularity along with all plastic packaging. Rethink chicken packaging in a quasi-"Apple packaging" creation. Would it sell more chicken at a higher price? Research would need to be done to ascertain the answer.

How about that rugged, humble, workhorse--the corrugated container? It is durable and inexpensive. Could it be produced in color without going to the expense of bleaching the fiber? A parallel may be the Financial Times whose salmon newsprint is known the world over. What if, for instance, red potatoes growers started packaging their product in red corrugated containers? What if watermelon producers used green lugs?

In the packaging and container sectors, the long-term trend has been to drive down prices, after all the product is seen as a commodity. Perhaps a foray into serious creativity could move the needle on the value of these products.

Be safe and we will talk next week.

If you would like to dig a little deeper, [click here].

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