Our previous post looked at the general category of office and stationery supplies, which includes printing paper. Inflation-adjusted sales are now just one-fifth of what they were in the early 2000s.

Today’s post looks more closely at paperboard, a sturdier form of paper used in, among other things, packaging and shipping goods. Has paperboard gone the way of paper? The FRED graph above tracks the manufacturing of paperboard containers, and the FRED graph below tracks a similar path for the manufacturing of the paperboard itself, which includes recycled materials.

Despite the rise in e-commerce and all its related packaging, there have been clear downturns for paperboard. But the story here isn’t a simple one. Paperboard is used for more than retail packaging, and retail packaging with paperboard may have declined for many reasons—for example, by substituting other types of packaging. We’re fortunate to have some industry insights to help illuminate the story.

From the American Forest and Paper Association:

“U.S. paper and paperboard capacity declined by 1.6% in 2023 [with] an average decline of 0.9% per year since 2014. [M]ore than 1.7 million tons of capacity, mostly using wood fiber, was permanently removed in 2023 as the industry faced demand weakness from customer destocking and economic headwinds.”

From Darren Miller, a senior director in the packaging industry:

“Sustainability requirements, lightweighting technology, and consumer preferences have yielded significant changes in the industry, including a shift from virgin to recycled capacity. Many companies also factor-in packaging size to try to minimize impact on landfills, shipping, and warehouse inventory. Despite its recyclability and decomposition properties, cardboard takes up more space than, say, a plastic bag or other flexible packaging that incorporates both foil and plastic.

Also consider inventory positions and the economy in general: Back in 2020-21, there were shortages of virtually everything. Manufacturing played catch-up, eventually exceeding demand. Customers overbought based on inflated demand signals, resulting in full warehouses and stores in an economy with consumers purchasing less due to inflationary pressure. This may partly explain the large dip in 2022. Put simply, if fewer products are being produced, purchased, and shipped, then less cardboard is needed and thus produced.”

How these graphs were created: Search FRED for “paperboard” and select the series for “paperboard container” and “paperboard mills.”

Suggested by George Fortier and Christian Zimmermann.