Substrate Review: Paperboard Cartons
by Sharon P. Derbyshire

Light at the End of the Tube
The start of the new millennium has not been cause for celebration at most U.S. carton manufacturers. For the last three years, the industry has struggled with overcapacity, plant closings, reduced profit margins, and increased pressure from imports. Smurfit-Stone Container Corporation (SSCC), the world’s largest integrated producer of paperboard and paper-based packaging products, reported a net loss of $208 million, or 85 cents per share, for 2003. The poor results were attributed to price erosion, restructuring charges, and foreign exchange losses.

The good news is that relief for the industry may be in sight. The general health of the U.S. economy is improving, resulting in increased demand and higher prices for paperboard cartons. Integrated companies are addressing overcapacity through consolidation and elimination of idle and underutilized equipment. SSCC alone has shut down 25 packaging facilities in the past five years. Manufacturers who responded to poor market conditions by streamlining their operations and aggressively cutting costs are poised to capture the full benefit of their increased productivity. The weakening of the U.S. dollar should also ease pressure from imports and offer renewed opportunities for exporters in foreign markets.

Little snap in folding
The carton business is usually segmented between food and non-food applications. Many in the food segment share the sentiment of Richard Garber, vice president-sales of Green Bay Packaging (GBP). Speaking about 2003, Garber commented, “Overall, folding carton markets did not grow much. However, customers that we serve did increase their market share, allowing us to grow.” GBP is a privately owned, diversified manufacturer of paperboard primarily involved in packaging food.

Jorma Sahlstedt, president of M-Real USA, which focuses its paperboard applications on high-end of non-food consumables like cosmetics and pharmaceuticals, added, “There are signs that 2004 will be better. We expect further success with our new products, thanks to their appealing visual properties and excellent convertibility.” With higher value comes higher expectations, especially for buyers of upscale items with high price tags and perceived value—a portion of which is fulfilled with a fancy box.

Fighting back vs. film
It is no secret that plastic films are eating up many new product introductions. Paperboard cartons have taken a direct hit from stand-up pouches in the dry foods (snacks, cookies, crackers, dry mixes, and pet food) and non-food (Ag/Chem products) categories. Although the trend is primarily cost driven, no one can argue the significance of flexible packaging as a means of source reduction. In some cases, source reduction can even be viewed as a preferred alternative to recycling efforts. Generally speaking, conversion of rigid packaging to flexible equates to a 70 percent reduction in weight and 90 percent reduction in landfill space.

Paperboard cartons still offer many advantages that ensure their continued success in retail markets. Cartons, and their corrugated first cousins, are easy to ship, stack, store, and display—and they act as billboard advertising for shoppers. Paperboard is valued for its rigid, yet relatively lightweight qualities that protect products from damage. Graphics and printing on paperboard are bold and vibrant. Its strong construction permits enhanced visual effects such as embossing, foil stamping, and holograms. Flat carton surfaces aid in bar code scanning, and optional fold-out panels offer more surface area to disseminate information.

Ease of recycling is another characteristic that makes paperboard a substrate of choice. Approximately 70 percent of the fiber used to manufacture folding cartons, setup boxes, trays, tubes, and carded packaging comes from recycled material. Absolutely! Food, manufactured by Strathcona Paper (SP), is made of 100 percent post-use recycled waste paper fibers and is approved for direct food contact by both the U.S. Food and Drug Administration and Canadian authorities. SP, based in Canada, specializes in the manufacture of medium to heavyweight boxboard. Manufacturers have overcome performance issues to allow the use of recycled fiber in packaging of bakery and frozen food, with emerging usage in over-the-counter (OTC) products, prescription drugs, and health care items.

Innovations in high-margin segments
Boosting and sustaining profitability are critical to the long-term health of the paperboard industry. Manufacturers are actively seeking value-added products that promise greater returns. A new offering from SSCC combines the strength and durability of a fluted substrate with superior printing and laminating technologies. SSCC has transformed plain brown corrugated into a substrate for upscale containers with unlimited graphic possibilities. Lithoflute is a versatile product that is particularly well suited to specialized packaging of health and beauty products and point-of-purchase displays.

MeadWestvaco (MWV) is promoting Forte, a smooth, high-gloss substrate with excellent print capabilities. It has the high-strength brawn for protective packaging, yet is a less expensive alternative to small flutes. Says Steve Pohlman, director of packaging and specialty marketing in MWV’s Packaging Resources Group, “Forte is part of our ‘sturdy packaging line’, which may not sound fancy, but defines products that fit desires in both graphics and toughness. For example, few corrugated products can stand up to embossing or stamping (they tend to crush), whereas Forte, at a similar price point, can withstand that demand and result in a great box for retailing.” Pohlman adds that Forte outperforms mini-flute substrates on press and in production, while running on conventional converting equipment.

M-Real is Europe’s largest producer of fine papers with concentration in cartons for beauty products, healthcare, branded food, consumer electronics, and cigarettes. When asked about new innovations for paperboard in high-margin segments, M-Real’s Sahlstedt commented, “There are clear improvements in the number of new launches of high-class cosmetics and pharmaceutical products packed in folding cartons and fluted cartons which are based on E, F, and N flute. Fluting and blister packs are relatively new technologies for paperboard producers.” As a result, many manufacturers are working toward achieving superior performance and economy for designers seeking new package solutions for upscale customers.

Opportunities in high-growth segments
OTC drug and pharmaceutical packaging are the highest-growth markets in North America for folding cartons and fold-over blister packs, based on a new study from the Freedonia Group. In response to this market opportunity, MWV has developed, Printkote EasySeal, a patented extrusion coated paperboard with excellent graphic reproduction and reliable seals for high barrier blister packaging. Printkote EasySeal delivers tamper-evident, fiber-tear bonds at low temperatures and short dwell times. It can be designed into child-resistant and senior-friendly blister cards ideal for pharmaceuticals. International Paper (IP) offers a similar product, Everest Seal-Pak, capable of bonding to all blister materials (PVC, PVdC, PETG, and Alcar) typically used to package pharmaceuticals, cosmetics, toiletries, food, and hardware products.

Although frozen food has slipped from the No.1 growth market for folding cartons, it continues to offer opportunities for paperboard. Several companies, including SSCC, MWV, and Gulf States Paper, offer substrates coated with proprietary materials that are designed to resist oil, grease, and moisture; meet FDA requirements for direct food contact; and offer easy release of frozen foods, refrigerated meals, and bakery items. Containers can be formed with gusseted corners or thermoformed into pressed trays designed for distribution, storing, cooking and serving—all out of the same box. With the proper coating, containers can be designed to be “dual-ovenable”: they can be heated in a microwave or a conventional oven, competing favorably with aluminum foil and plastic trays.

Total packaging solutions
The paperboard industry understands packaging requirements and designers’ expectations. Board manufacturers are developing products and offering services with total packaging solutions in mind. In the beverage industry, plastic barrier bottles are credited with preserving the Vitamin C content of juice. The nutritional value and taste of juice declines over time as the product is exposed to light and oxygen.

IP has found a way to preserve the Vitamin C content of juice packaged in gable top cartons without sacrificing freshness or flavor. IP’s patented Barrier-Pak technology prevents oxygen and light from entering through the carton walls. This unique lining uses multiple layers of high performance polymers, including EVOH as the primary oxygen barrier, nylon for durability and a thin contact layer of low-density polyethylene. According to Beverage Marketing magazine, for the last six years gable top juice cartons have maintained market share relative to plastic barrier bottles. IP’s Barrier-Pak technology has had a significant impact on retaining this market for paperboard

To complete the renovation of their gable top carton, IP created a novel screw top, known as the Spout-Pak, making the package easier to open, pour, and reseal. IP has combined its Barrier-Pak technology with Spout-Pak innovation and high impact process graphics to create the Tru-Taste Gold beverage packaging system, a total package solution for beverage gable top cartons.

IP goes the extra mile for its customers by manufacturing and selling complete beverage packaging systems. The systems include packaging, high-speed carton filling machinery, and the service required to keep customer operations running smoothly. IP’s Evergreen Packaging Equipment group is the world leader in gable-top-filling machine technology. IP’s Total System Solution focuses on providing technology in three key areas: paperboard, converting/packaging, and machinery, while supplying the technical service to back it up.

The paperboard industry continues to be a challenge for manufacturers. Those who have taken steps to reduce cost and align their operations to meet the needs of their customers are in a better position to capitalize on the improving economy. Paperboard, offering a unique mix of qualities not satisfied by any other substrate, will continue to be a dominant player in the packaging industry. Innovative companies that seek opportunities in value-added products, high-growth segments, and systems that provide customers with total packaging solutions can look forward to a brighter tomorrow.