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RISI Forecasts Rise Of Retail Superstores To Fuel Opportunity In The Corrugated Box Industry

Wednesday, October 25, 2006

Press release from the issuing company

BEDFORD, MASSACHUSETTS (October 24, 2006) – RISI, the leading information provider for the global forest products industry, today released preliminary results from a new study that indicates the rise of supercenter and warehouse club stores is creating significant new opportunities for corrugated box companies. “The strong influence of warehouse club stores on corrugated box demand is due to their recognition of secondary packaging’s importance in marketing a product,” commented study co-author Heidi Kamp, RISI economist for consumer products. An issue unique to warehouse club stores is their need for bulk boxes that are easy to carry and display. The demand for better display-ready cartons in turn affects the density of the product within shipping cases. Whereas suppliers prefer to pack a product as compactly as possible, club stores prefer they are packaged less densely so they display better. The result, Kamp says, is that “more loosely-packed shipping containers means the ratio of corrugated shipping boxes to product is rising, and paper industry data for the last few years reflects this trend.” Another example is the dramatic increase of corrugated box market share when Wal-Mart chose to switch from using returnable plastic crates (RPC) to the standardized corrugated common footprint (CCF) in the produce industry. There has been a major trend among retailers to switch to the CCF because of its display-ready feature. According to Kamp, “This increases the amount of corrugated used per product, and as more food retailers make the switch to the CCF, the outlook for corrugated improves.” The complete report, U.S. Corrugated Box End-Use Markets: Analysis and Forecast through 2011, features analysis and outlook for corrugated box shipments covering 28 end-use markets in the durable, non-durable, and service segments. It is slated for publication in December 2006. A complete prospectus can be found at www.risiinfo.com/corrbox.




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