IBISWorld Industry Report Paper Bag & Disposable Plastic Product Wholesaling in The US 2018

WWW.IBISWORLD.
COM Paper Bag & Disposable Plastic Product Wholesaling in the USDecember 2018 1
Mixed bag: Competitive pricing pressures will

cause industry revenue to dip
This report was provided to
Edeska (2129455405)
by IBISWorld on 23 October 2019 in accordance with their license agreement with IBISWorld
IBISWorld Industry Report 42413

Paper Bag & Disposable Plastic
Product Wholesaling in the US
December 2018 Anna Miller
2 About this Industry 18 International Trade 29 Revenue Volatility

2 Industry Definition 19 Business Locations 30 Regulation & Policy
2 Main Activities 31 Industry Assistance
2 Similar Industries 21 Competitive Landscape
3 Additional Resources 21 Market Share Concentration 32 Key Statistics
21 Key Success Factors 32 Industry Data
4 Industry at a Glance 21 Cost Structure Benchmarks 32 Annual Change
23 Basis of Competition 32 Key Ratios
5 Industry Performance 24 Barriers to Entry 33 Industry Financial Ratios
5 Executive Summary 24 Industry Globalization
5 Key External Drivers 34 Jargon & Glossary
7 Current Performance 25 Major Companies
9 Industry Outlook 25 Sysco Corporation
11 Industry Life Cycle 26 Veritiv Corp.
27 Bunzl PLC
13 Products & Markets 27 Uline Inc.
13 Supply Chain
14 Products & Services 28 Operating Conditions
15 Demand Determinants 28 Capital Intensity
16 Major Markets 29 Technology & Systems
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

WWW.IBISWORLD.COM Paper Bag & Disposable Plastic Product Wholesaling in the USDecember 2018 2
About this Industry
Industry Definition Wholesalers in this industry purchase a sanitary and tissue products; disposable
range of paper and plastic products from cutlery and food trays; cartons; plastic
manufacturers and distribute them to and paper bags; paper party goods; and
retail stores, food service outlets and cardboard packaging. This industry does
agricultural producers. Industry products not include the wholesale distribution of
are wide-ranging and typically include stationery or office supplies.
Main Activities The primary activities of this industry are

Wholesaling plastic and paper bags
Wholesaling cardboard and cardboard containers, including boxes, food containers and drink cartons
Wholesaling polystyrene foam products, excluding foam packaging
Wholesaling molded pulp products, including egg trays and shipping supplies
Wholesaling various plastic products, including disposable dishes and cutlery
Wholesaling coated paperboard and laminated paperboard products
Wholesaling sanitary paper products, including tissues, napkins, toilet paper, diapers and similar products
Wholesaling various paper products, including party supplies, disposable dishes, wrapping paper and similar items
The major products and services in this industry are

Cardboard boxes
Disposable plastic boxes, containers, cups and dishes
Household paper and plastic products
Industrial paper and plastic products for packaging
Janitorial equipment and supplies
Paper dishes and cups
Other paper products, including personal sanitary products
Other products
Similar Industries 32221 Cardboard Box & Container Manufacturing in the US

Operators in this industry convert purchased paper, paperboard and old corrugated containers into
cardboard boxes, containers and similar packaging solutions.
32222 Coated & Laminated Paper Manufacturing in the US

Operators in this industry process paper and cardboard into coated and laminated paper and packaging and
other products.
32229a Sanitary Paper Product Manufacturing in the US

Industry operators convert sanitary paper stock or wadding, as well as pulp and paper, into sanitary paper
products.
32229b Paper Product Manufacturing in the US

Operators in this industry convert paper and paperboard into labels, greeting cards, wrapping paper,
cigarette papers, paper filters, paper dishes, cups and recycled paper insulation.
Provided to: Edeska (2129455405) | 23 October 2019

About this Industry
Similar Industries 32611 Plastic Film, Sheet & Bag Manufacturing in the US
Industry operators primarily convert plastic resins into unsupported plastic film and sheets and plastic bags.
continued
32614 Polystyrene Foam Manufacturing in the US
Operators in this industry manufacture polystyrene foam products, including food containers, polystyrene
foam packaging and polystyrene building insulation.
42411 Paper Wholesaling in the US

Paper wholesalers purchase bulk paper from manufacturers, generally in rolls for further processing, and
distribute them to other manufacturing industries, publishers and printers.
42412 Office Stationery Wholesaling in the US

Office stationery wholesalers distribute a range of paper stationery products and other office supplies to
retailers, other wholesalers and directly to customers.
Additional Resources For additional information on this industry

www.afandpa.org
American Forest & Paper Association
www.naw.org
National Association of Wholesaler-Distributors
www.census.gov
US Census Bureau
IBISWorld writes over 1000 US

industry reports, which are updated
up to four times a year. To see all
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WWW.IBISWORLD.COM Paper Bag & Disposable Plastic Product Wholesaling in the US December 2018 4
Industry at a Glance
Paper Bag & Disposable Plastic Product Wholesaling in 2018
Key Statistics Revenue Annual Growth 13–18 Annual Growth 18–23

Snapshot
$83.3bn 0.9% -0.6%
Profit Wages Businesses
$2.7bn $4.7bn 5,744

Revenue vs. employment growth Consumer spending
Market Share
Sysco Corporation 8 15
5.3%
14
4
Veritiv Corp.
13
% change
5.1%
$ trillion
0
12
-4
11
-8 10
Year 10 12 14 16 18 20 22 24 Year 10 12 14 16 18 20 22 24
Revenue Employment
SOURCE: WWW.IBISWORLD.COM
p. 25
Products and services segmentation (2018)
5.8%
Key External Drivers
Consumer spending
Janitorial equipment
and supplies 21.2%
Other paper products, including
9.3% personal sanitary products
E-commerce sales Paper dishes and cups
Freight transportation
services index
10.7%
Price of paper Cardboard boxes
Price of plastic
materials and resin
Demand from
supermarkets and 10.9% 19.1%
Disposable plastic boxes, containers, Industrial paper and plastic
grocery stores cups and dishes products for packaging
p. 5 11.5%
Other products 11.5%
Household paper and plastic products SOURCE: WWW.IBISWORLD.COM
Industry Structure Life Cycle Stage Mature Regulation Level Light

Revenue Volatility Low Technology Change Medium
Capital Intensity Low Barriers to Entry Low
Industry Assistance None Industry Globalization Low
Concentration Level Low Competition Level High
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 32

Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
Executive Over the five years to 2018, revenue Consolidation among industry operators
Summary growth has been moderate for the Paper has resulted in a decline in the number of
Bag and Disposable Plastic Product industry enterprises during the current
Wholesaling industry. Wholesalers in this period. Over the five years to 2018, the
industry purchase a range of paper and number of industry enterprises is estimated
plastic products from manufacturers and to decrease at an annualized rate of 1.6% to
distribute them to retail stores, food 5,744 companies. Industry operators have
service outlets and agricultural increasingly acquired competitors to
producers. Products include sanitary and broaden their product lines. Customers in
tissue products, disposable cutlery and the food service, food product and
healthcare industries have increasingly
looked to reduce the number of suppliers
Competitive
pricing pressures are anticipated they contract with, putting pressure on
industry operators to be able to act as a
to put downward pressure on industry revenue one-stop shop.
Over the five years to 2023, industry
food trays, cartons, plastic and paper revenue is anticipated to decline slightly, at
bags, and cardboard packaging and an annualized rate of 0.6% to $80.7 billion.
boxes. Increases in corporate profit and However, the Supermarkets and Grocery
consumer spending has supported steady Stores industry (IBISWorld report 44511)
demand from clients in downstream and food manufacturing sector are
industries. Consequently, over the five expected to increase, boosting industry
years to 2018, industry revenue is demand. Still, slowing demand for industry
expected to increase at an annualized rate products in combination with high price
of 0.9% to $83.3 billion, with 1.2% competition is ultimately expected to result
growth over 2018 alone. in an overall decline in industry revenue.
Key External Drivers Consumer spending States. To ship products purchased by

Consumer spending measures the total customers online, companies use
amount spent by Americans on services industry products to package and secure
and new goods and net purchases of used items during transport. In 2018, the
goods, both domestically and abroad. An number of e-commerce sales is expected
increase in consumer spending typically to increase.
increases revenue and customer traffic
for important downstream markets. As a Freight transportation services index
result, these downstream markets The freight transportation services index
increase their demand for products from measures the annual output of the US
paper bag and disposable plastic product transportation sector. Output includes
wholesalers, driving revenue growth. In transportation service by for-hire
2018, consumer spending is anticipated trucking, railroad, inland waterway,
to increase, presenting a potential pipeline and airfreight carriers.
opportunity for the industry. Transportation service providers use
industry products to ensure products are
E-commerce sales shipped safely and securely. In 2018, the
E-commerce sales measure the value of freight transportation services index is
retail sales done online in the United expected to increase.

Key External Drivers Price of paper increase, enabling revenue growth

continued Industry wholesalers purchase paper throughout the supply chain. The price of
products from manufacturers and plastic materials and resin is expected to
distribute them to retail outlets for sale to increase in 2018.
end users. When the price of paper
products increases, selling prices also Demand from supermarkets
increase, enabling revenue growth and grocery stores
throughout the supply chain. The price of Supermarkets and grocery stores retail
paper is expected to increase in 2018. food products, including fresh and
Nonetheless, the volatile nature of the prepared meats, poultry and seafood,
price of paper represents a potential canned and frozen foods, fresh fruits and
ongoing threat to the industry. vegetables and various dairy products.
Supermarkets and grocery stores require
Price of plastic materials and resin industry products not generally for sale,
Industry wholesalers purchase plastic but to organize, display, transport and
products from manufacturers and package the products they sell to
distribute them to retail outlets for sale to consumers. Revenue from the
end users. When the price of plastic Supermarkets and Grocery Stores
materials rises, selling prices also industry is expected to increase in 2018.
Consumer spending E-commerce sales
15 900
14 750
600
13
$ trillion
$ billion
450
12
300
11 150
10 0
Year 10 12 14 16 18 20 22 24 Year 9 11 13 15 17 19 21 23

Current Over the five years to 2018, the Paper Bag

and Disposable Plastic Product Industry revenue
Performance Wholesaling industry has experienced
6
modest growth due to rising per capita
disposable income and growing demand 4
for industry products. Many paper
products remain household necessities 2
% change
and, as disposable income has increased,
consumers have opted for higher-margin 0
options. Lower unemployment and

-2
steady economic growth have also led to
higher demand for paper products from -4
businesses. Industry revenue has Year 10 12 14 16 18 20 22 24
experienced steady growth in demand
from the Supermarkets and Grocery SOURCE: WWW.IBISWORLD.COM
Stores industry (IBISWorld report 44511)

and restaurant industries (72211a and low-margin purchases for higher-margin
72211b). In addition, strong growth in products. Establishments, such as
e-commerce sales and freight restaurants, that experience decreased
transportation have supported industry customer traffic during economic
revenue during the period. IBISWorld contractions adjust their demand for
expects industry revenue to increase at industry products. Therefore, growth in
an annualized rate of 0.9% to $83.3 the economy and increased consumer
billion over the five years to 2018, spending have led to increased demand.
including a 1.2% revenue increase in In addition, growing e-commerce
2018 alone. sales have increased demand for
The industry is dependent on stable industry products because they are
demand from food and beverage needed for the shipment and packaging
industries, businesses and consumers. of goods for delivery to consumers.
Retail establishments are a primary E-commerce sales have increased due to
source of downstream demand, selling rising consumer spending; however,
sanitary paper products, paper and they are also becoming more common as
plastic bags and other household more transactions are done over the
necessities. Retailers, especially grocery internet. For some consumer-oriented
stores, also use industry products to businesses, especially new ventures,
package food and beverages and bag online stores present a less-expensive
groceries at checkout lines. An increase alternative to capital investments in
in overall consumer spending over the brick-and-mortar spaces. Growth in the
past five years has led to an increase in level of e-commerce sales has helped
demand for industry products from increase the level of US freight
supermarkets and grocery stores. As transportation of goods and services,
these industries have benefited from which benefits the industry as
rising per capita disposable income, they transportation companies purchase
have increased their demand for industry industry supplies to ship goods safely
products or have been able to substitute across the country.

Internal price Industry revenue growth has been

competition somewhat constrained by internal price Industry
revenue growth
competition and competition from mass
merchant retailers. Price competition
has been somewhat
creates pressure on industry operators constrained by internal
to charge the lowest possible price for price competition
their products. For example, while
increased demand from food
manufacturing is expected to ramp up to a significant level of price
demand for industry products, high competition. Since these establishments
internal price competition has kept are able to avoid the markups that
prices low and constrained revenue and independent wholesalers cannot, they
profit growth for industry operators. are able to offer products at much lower
Manufacturers’ sales branches, which prices. This adds to the overall level of
are included in this industry, contribute price competition for the industry.
Industry landscape Many wholesaling industries have low companies to exit the industry or be
profit margins and this industry is no acquired by larger industry operators.
exception. In 2018, profit margins are This trend is particularly evident among
projected to account for 3.2% of revenue. distributors wholesaling to clients in the
Over the past five years, the price of food service and healthcare industries.
plastic materials and resin declined an Businesses in these industries rely
annualized 0.7%, contributing to slight heavily on industry operators for
growth in profit, which represented an supplies and are increasingly looking to
estimated 2.5% in 2013. Ultimately, consolidate the number of suppliers they
however, profit margins remain low, do business with, which has created
offset by an increase in the price of paper pressure for wholesalers to supply an
and the high level of price competition increasing range of products. As a result,
experienced by industry operators. wholesalers are acquiring other
Despite revenue growth over the past distributors to add to their product lines
five years, the number of industry and act as a one-stop shop for clients.
enterprises and establishments has This shift has favored large
continued declining, a trend which has distributors, such as Sysco Corporation
expressed itself over the last decade. Over and Veritiv Corporation, that already
the five years to 2018, the number of have broad product lines and the
industry enterprises has declined at an capital necessary to acquire smaller
annualized rate of 1.6% to 5,744 operators. Despite a decline in the
companies in 2018. IBISWorld attributes number of industry enterprises,
this to growing consolidation among employment has increased, growing at
industry operators. Low profit margins an annualized rate of 1.4% during the
and price competition have motivated period to 70,777 staff in 2018.

Industry Over the five years to 2023, the Paper Bag

and Disposable Plastic Product
from customers in the Supermarkets and
Grocery Stores industry (44511) and
Outlook Wholesaling industry is projected to restaurants (72211a and 72211b) will likely
experience declining revenue due to be satisfied by mass merchants,
continuing internal price competition and warehouse clubs and consumer facing
external competition from the Warehouse e-commerce platforms. As a result,
Clubs and Supercenters industry industry revenue is anticipated to decrease
(IBISWorld report 45291). A growing an annualized 0.6% to $80.7 billion over
portion of demand for industry products the five years to 2023.
Rising competition Over the next five years, restaurants and

food service providers are expected to E-commerce sales will
leads to revenue
decline experience an increase in revenue due to continue to grow strongly
continued growth in per capita
disposable income and sustained low over the period
unemployment. Typically, increased
consumer traffic and purchases in single that products are delivered to
location full-service and chain customers in adequate condition.
restaurants increases demand for While these factors are anticipated to
industry products. In addition, support industry revenue, they are
individuals and businesses are more ultimately expected to be offset by
likely to shift purchases toward higher- competition from companies, such as
margin products during periods of Costco Wholesale Corporation, in the
increased consumer spending and higher Warehouse Clubs and Supercenters
disposable income. Therefore, wholesale industry. Slowing demand combined with
distributors are anticipated to benefit continued high levels of price
from higher purchase volumes over the competition is also ultimately expected to
next five years. put downward pressure on revenue. A
In addition, e-commerce sales will growing number of consumers in need of
continue to grow strongly over the paper bag and disposable plastic
period as retail activity will continue its products are expected to turn to these
move away from brick-and-mortar supply channels instead of wholesale
establishments. Over the five years to operators due to their ability to provide
2023, e-commerce sales are expected to lower prices and similarly wide-ranging
increase an annualized 8.3%, helping product lines. The ability of
drive demand for industry products. manufacturers’ sales branches to offer
Goods purchased by consumers over lower prices than independent
the internet require cardboard boxes, wholesalers will continue to foster a high
plastic bags, kraft wrap and other level of price competition as well, to the
plastic and paper products to ensure detriment of industry revenue.
Industry structure Wholesale operators are expected to by downstream customers who are
continue expanding their product lines to looking to consolidate the number of
function as a one-stop shop for suppliers they do business with in an
customers. This will primarily be driven attempt to simplify their supply chains.

Industry structure As a result, consolidation activity is protect profit margins in anticipation of

continued expected to accelerate as distributors slowing economic growth and demand for
look to expand their product lines and industry products. These trends are
capabilities. This will continue to put anticipated to reduce total wage
downward pressure on the number of expenditure and help sustain profit
industry enterprises and establishments. margins. In 2023, profit margins are
Over the five years to 2023, the expected to continue to account for 3.2%
number of industry enterprises is of total industry revenue. However,
projected to decrease at an annualized projected increases in the price of paper
rate of 0.5% to 5,595 companies. In and plastic materials and resin could
addition, the number of industry potentially offset the effect of any wage
employees is expected to decrease an expenditure savings. High price
annualized 0.5% to 69,147 employees competition limits the ability of industry
over the period. More industry operators operators to pass on higher materials costs
are expected to reduce employment to along the supply chain to consumers.
Environmental Business and consumer concerns over

concerns enter the the environmental impact of plastic and Concernsover the
paper will gain importance over the next
scene
five years. IBISWorld anticipates that
environmental impact of
more states will seek to limit or ban the plastic and paper will gain
use of plastic bags. In July 2015, Hawaii importance
became the first state to ban the
distribution of plastic bags, except for
compostable bags and those used for products. As a result, industry operators
sanitary purposes. The ban is the first of will need to cater to environmental
its kind to completely prohibit plastic concerns to succeed in the industry. If
bags in places like grocery and successful, the higher cost of paper bags
convenience stores. In November 2016, might prove to be beneficial to industry
California passed its own law that operators in the form of higher revenue.
requires establishments to charge for If not, plastic bag and plastic cutlery bans
single-use plastic bags. Over the next five pose a substantial threat to industry
years, consumers are expected to be more operators who specialize in plastic
conscious of the environmental impact of products or for operators whose plastic
paper and plastic products and look to products make up the largest share of
purchase recycled and eco-friendly their revenue.

Life Cycle Stage The industry is anticipated to decline as
a portion of total US productivity
The number of enterprises and
establishments is expected to decrease
Industry product groups maintain
wholehearted market acceptance

Industry Life Cycle The Paper Bag and Disposable Plastic industries still rely on wholesale
Product Wholesaling industry is in the services to supply products that are
mature stage of its life cycle. Over the 10 necessary to their operations. Indicative
Thisindustry years to 2023, the industry value added of a mature industry, industry revenue
is M
ature (IVA), which measures the industry’s tends to fluctuate according to patterns
overall contribution to the economy, is in consumer spending, the rate of
projected to grow an annualized 1.2%. In unemployment and other
comparison, US GDP is anticipated to grow macroeconomic indicators. In addition,
2.1% during the same period. As a result, while the introduction of new products
the industry is anticipated to decline as a has slowed, many industry operators
portion of total US productivity. While this have begun to rationalize the products
is typically indicative of a declining and brands they carry. For example,
industry, other industry characteristics industry operators who cater to those in
establish the industry in the mature phase food service have begun to provide
of its life cycle. other useful products for those
Although customers are increasingly businesses alongside industry-relevant
purchasing products from consumer ones. This has resulted in growing
facing e-commerce platforms and consolidation as industry operators
warehouse clubs, industry services have acquired competitors to broaden
remain widely accepted and used by the their product lines. This is also typical
majority of manufacturers and of an industry in the mature phase of its
customers. The majority of downstream life cycle.

Products & Markets

Supply Chain | Products & Services | Demand Determinants
Major Markets | International Trade | Business Locations
Supply Chain KEY BUYING INDUSTRIES

11 Agriculture, Forestry, Fishing and Hunting in the US
Plastic, paper and cardboard packaging is purchased by many agricultural producers to
package fruit, vegetables, meat and seafood.
31-33 Manufacturing in the US
Packaging materials are required by nearly all manufacturing industries in the United States to
transport their products.
44511 Supermarkets & Grocery Stores in the US
Supermarkets sell all of the products supplied by industrial and personal service paper
wholesalers, and they also use plastic bags and paper bags for packaging.
44512 Convenience Stores in the US
While purchasing lower volumes than supermarkets, convenience stores buy many of this
industry’s traded products, such as diapers, tissues, paper and plastic utensils and dishes.
45291 Warehouse Clubs & Supercenters in the US
Stores and retail clubs, such as Costco, are major buyers of products supplied by wholesalers in
this industry.
56191 Packaging & Labeling Services in the US
Packaging and labeling services use paper and plastic materials for packaging.
72 Accommodation and Food Services in the US
Restaurants, takeaway food stores, diners, and other food services require paper, plastic, and
cardboard packaging for drinks and food, as well as paper and plastic bags for takeout.
KEY SELLING INDUSTRIES

32192 Wood Pallets & Skids Production in the US
Wood pallets and skids are required for moving large quantities of office supplies.
32221 Cardboard Box & Container Manufacturing in the US
Wholesalers purchase cardboard boxes and container for resale to other manufacturing
industries or food services.
32222 Coated & Laminated Paper Manufacturing in the US
Paper bags are purchased by wholesalers from manufacturers in this industry.
32229a Sanitary Paper Product Manufacturing in the US
This manufacturing industry supplies various sanitary products to wholesalers.
32229b Paper Product Manufacturing in the US
This industry supplies various paper and molded pulp products to wholesalers.
32611 Plastic Film, Sheet & Bag Manufacturing in the US
This industry supplies plastic bags to wholesalers.
32614 Polystyrene Foam Manufacturing in the US
Wholesalers purchase disposable dishes and containers made from polystyrene foam products
from this industry.
33392 Forklift & Conveyor Manufacturing in the US
Forklifts are used in the warehouses, for lifting and moving large packages of products.
53113 Storage & Warehouse Leasing in the US
Wholesalers usually lease storage facilities for holding stock.

Products & Markets
Products & Services Products and services segmentation (2018)

5.8%
9.3%
Janitorial equipment
and supplies 21.2%
Other paper products, including
Paper dishes and cups personal sanitary products
10.7%
Cardboard boxes
10.9% 19.1%
Disposable plastic boxes, Industrial paper and plastic
containers, cups and dishes products for packaging
11.5%
Other products 11.5%
Total $83.3bn
Household paper and
plastic products SOURCE: WWW.IBISWORLD.COM
The Paper Bag and Disposable Product other distributors. In 2018, this
Wholesaling industry encompasses a product segment is estimated to
wide variety of products, which can be account for 19.1% of total industry
segmented into six broad groups. The revenue, constituting the largest
portions of sales generated from these product segment.
categories may differ between
wholesalers and between Household paper and plastic products
establishments of different sizes and This product segment encompasses
specialties. Often, prices will reflect household paper and plastic products,
input prices at the manufacturing including paper towels and napkins. It
level and the purchasing power of does not, however, include plastic cups,
retailers, as wholesalers are generally dishes and silverware. For example,
price takers. products include paper towels, napkins,
facial tissue, bath tissue, trash bags and
Industrial paper and plastic food storage materials such as plastic
products for packaging wrap and wax paper and disposable
This product segment consists of paper plastic containers. In 2018, sales from
and plastic that is used for the products in this segment accounted for
packaging and wrapping of good and 11.5% of total industry revenue, making
products for industrial use. Products it the second-largest product segment.
include stretch film, carded packaging
materials and other plastic packaging, Disposable plastic boxes,
tape, strapping, poly tubing, corner containers, cups and dishes
board, poly covers, poly bags, kraft This product segment includes
wrap, corrugated paper products, disposable plastic boxes and
bubble wrap, mailers, foam peanuts containers for nonhousehold use, as
and air pillows. These products are well as disposable plastic and paper
used primarily during the shipping cups, dishes, and supplies used in
and transportation of goods by retail establishments and households.
producers, shipping companies or Restaurants, grocery stores,

Products & Markets
Products & Services delicatessens and other food service Janitorial equipment and supplies and
continued providers and households use these other products
products to package food products for Companies that operate in this industry also
delivery, take-out and left-over food generally provide janitorial equipment and
products. In 2018, this product supplies, which is estimated to represent
segment is estimated to contribute 5.8% of revenue in 2018. Janitorial supplies
10.9% to total industry revenue. include products such as soap dispensers
and refills, multi-purpose cleaning products
Cardboard boxes and supplies, brooms and mop equipment,
Included within the broad product restroom hygiene products and safety and
segment of cardboard boxes hazardous security products. These products align in
shipping containers. Products include terms of use compared with industry
corrugated shipping boxes, mailers, relevant products such as bath tissue and
moving boxes, storage file boxes, boxes paper towels. Generally, retailers who
for shipping hazardous materials and purchase industry relevant products also
pallet boxes. Boxes are available in a require these complementary janitorial
variety of sizes and depths. In addition, products and supplies, so operators will
some industry operators distribute to often offer these as well. In addition to
companies who require specialty janitorial equipment and supplies, safety
branded boxes. In 2018, this product products, retail supplies, healthcare
segment is estimated to represent products and other miscellaneous products
10.7% of total revenue. contributed 11.5% to industry revenue.
Demand Demand for the Paper Bag and Disposable the rate of unemployment, business
Determinants Plastic Product Wholesaling industry’s sentiment and consumer confidence.
services is largely dependent on demand During periods of economic growth,
from downstream industries that buy increases in consumer spending and
from wholesalers. Most industry products confidence, per capita disposable income
are either used in manufacturing and and business sentiment lead to increases
industrial operators as an input or are in spending among all downstream
used by businesses for use in their own industries, creating demand and revenue
operations. Examples include restaurants growth for this wholesale industry.
and food service establishments, However, during periods of economic
supermarkets and grocery stores. In contraction, the effects tend to differ.
addition, e-commerce operations also For example, household sanitary
require industry products for the shipping products tend to remain stable even
and transport of products to consumers. during economic downturns. Generally,
In accordance with this, demand for the these products are considered
Paper Bag and Disposable Plastic Product nondiscretionary and people will always
Wholesaling industry is dependent on the need them. In comparison, away-from-
economic status and health of its home sanitary products tend to be more
downstream industries. sensitive to economic downturns. During
Due to the variety of downstream periods of economic contraction,
industries that the industry serves, it can businesses adjust their purchase of
be affected by a wide range of sanitary products and other paper and
macroeconomic factors such as per capita plastic products to be in line with
disposable income, consumer spending, decreased customer traffic. With fewer

Products & Markets
Demand customers and decreased revenue, manufacturing division also tends to

Determinants establishments are also by default grow, increasing demand for packaging.
decreasing their consumption of products Demographic trends and shifting
continued
that vary in response to demand. While consumer preferences also affect industry
resulting in lower variable costs for these demand to some degree. As people have
customers, it also means decreased become more conscientious about the
revenue for the Paper Bag and Disposable products they consume and their effect on
Plastic Product Wholesaling industry. the environment, it has shifted demand for
One of the large markets for the Paper industry products. Least notable has been
Bag and Disposable Plastic Product the use of away-home-from home products.
Wholesaling industry is that of As a substitute for plastic containers, many
downstream manufacturers and restaurants have begun offering paper food
industrial companies that use industry containers. Since the industry supplies both
products as an input in production. Since products, revenue has not changed much.
the manufacturing industry is sensitive to However, household consumption patterns
macroeconomic factors, revenue from have had more of an effect since consumers
this industry generally decreases during are looking to reduce consumption of plastic
slow economic periods. Products sold to food storage bags and containers in favor of
downstream manufacturing industries products that can be reused, such as glass
include cardboard boxes, containers, containers and reusable plastic food storage
cartons, paper bags, paper sacks and containers. In addition, consumers are
plastic bags, which are generally used to becoming more conscious about the
package and ship manufactured products they purchase, opting for products
products. When the economy is that use recyclable packaging or limited
expanding, production in the quantities of packaging.
Major Markets Major market segmentation (2018)

7.5%
Restaurants, hotels and food
service establishments
7.7%
Other
36.2%
Distributors and other wholesalers
10.1%
Manufacturing and mining industries
as inputs in production
17.2%
Retailers for resale
21.3%
Total $83.3bn Businesses for use in their own operations
Due to the wide variety of products markets. Even within these markets,
included in the Paper Bag and Disposable establishments types vary, and it is likely
Plastic Product Wholesaling industry, the that industry operators sell many
industry also serves a variety of different different products to each market; some

Products & Markets
Major Markets products may be more specific to some who then sell directly to consumers. In
continued markets than others; however, a large 2018, this market segment is estimated to
amount of overlap exists. represent 17.2% of industry revenue.
Grocery stores, supermarkets,
Distributors and other wholesalers pharmacies and other specialty stores
The largest market for operators in this purchase products, including but not
industry are other wholesalers and limited to disposable cutlery, paper
distributors. In 2018, 36.2% of industry towels, paper napkins, bath tissue and
revenue was generated through the sale sanitary paper to be sold directly to
of industry products to other wholesalers consumers who are generally not buying
and distributors for resale. Oftentimes, it large quantities themselves.
is more efficient for industry operators to
purchase from other wholesalers that Manufacturing and mining
might be closer in proximity to them than industries as inputs in production
a distributor or manufacturer that is This segment consists of manufacturers
located farther away. Due to the and industrial mining establishments
geographically fragmented nature of the that purchase industry products to be
industry, this is quite common. used as input goods during their
production process. In 2018, this market
Businesses for use in their segment is estimated to represent 10.1%
own operations of industry revenue. Industry operators
Businesses who buy industry products for supply packaging, safety, break room
the use in their own operations make up and industrial cleaning supplies that are
the second-largest market segment for used throughout the industrial and
the industry. In 2018, an estimated 21.3% manufacturing production process. For
of revenue for the industry will be example, Kraft paper is a paper product
generated through the sale of industry that is used for packaging products with
products to businesses. Industry high demands for strength and
products, such as plastic and paper bags, durability due to its high elasticity and
are not sold by the retailer, but are used high tear resistance.
to package products that are sold or
necessary for business operations. Restaurants, hotels and food
Generally, businesses buying from this service establishments
industry require products in large This market segment is estimated to
quantities and buying them from a generate 7.5% of industry revenue in
wholesaler provides a cost advantage in 2018. Customers in this market purchase
comparison with purchasing these same industry products to be used in the
products from a retailer. Examples operation of food service hospitality and
include super markets and grocery stores includes, but is not limited to, products
for food packaging, medical such as bath tissue, paper towels, paper
establishments and transportation napkins, paper and plastic plates and
service providers who use industry dining wear, and food storage containers.
products to keep items safe and secure Operators within this segment also
during travel. require safety and cleaning supplies.
Contained within this segment are
Retailers for resale companies that operate cafeterias and
The Paper Bag and Disposable Plastic dining areas in educational institutions
Product Wholesaling industry also sells and workplaces on a contractual basis.
products in large quantities to retailers Fast-food restaurants and full-service

Products & Markets
Major Markets single-location and franchise industry products for use in repair;
continued restaurants as well as catering building contractors, those in heavy
enterprises are examples of customers construction and special trade
included in this segment. contractors; farmers who purchase
industry products used in farm
Other production; and governmental bodies. Of
Other buyers of industry products are this segment, sales to exporters make up
contained within this category and are 1.9% of revenue. Wholesalers sell product
estimated to represent 7.7% of industry in large quantities to exporters, who are
revenue in 2018. Examples of other the ones who export the product.
buyers include household consumers and Nonetheless, the Paper Bag and
individuals purchasing these products at Disposable Plastic Product Wholesaling
the wholesale level rather than at retail does not actively participate in the export
establishments; repair shops using and import of goods.
International Trade Wholesale international trade is Paper Bag and Disposable Plastic Product
conventionally recorded at the Wholesaling industry does not have
manufacturing level. Consequently, the trade figures.

Products & Markets
Business Locations 2018
West
AK
0.2 New
England
ME
Great Mid- 0.3
Lakes Atlantic 1 2
NY 3
WA MT ND 9.1
5 4
2.1 0.1 MN
Rocky
0.1 2.0
WI
OR Mountains SD
0.2
Plains 1.7 MI
2.3
PA
4.1
6
7
1.3 ID IA OH 9 8
0.4 WY 3.5
0.0
NE
0.5
IL IN WV VA
6.7 1.5 1.5
West NV
0.4 0.2
KY
UT MO
0.8 NC
0.5
0.7 CO KS 1.7 2.7
1.7 0.8 TN
SC
Southeast
1.6
CA 1.0
15.9
OK AR GA
0.6 0.9 AL 3.2
AZ MS 1.1
1.4 NM
0.3 Southwest 0.7
TX LA
1.1 FL
6.3 5.4
West Establishments (%)
HI Less than 3%
0.8 Additional States (as marked on map) 3% to less than 10%
1 VT 2 NH 3 MA 4 RI 10% to less than 20%
0.1 0.4 2.5 0.6 20% or more
5 CT 6 NJ 7 DE 8 MD 9 DC
1.6 5.9 0.2 1.6 0.0

Products & Markets
Business Locations Establishments operating in the Paper

Distribution of establishments vs. population
Bag and Disposable Plastic Product
Wholesaling industry are concentrated in
30
the Southeast, West, Mid-Atlantic and
Great Lakes regions. The Southeast, West
and Mid-Atlantic regions contain almost 20
identical concentrations of industry
establishments, with 20.0%, 20.8% and
%
20.8%, respectively. The Great Lakes 10
region also contains a notable 15.6% of
industry establishments.
The geographic concentration of 0
industry establishments is primarily due
West
Great Lakes
Mid-Atlantic
New England
Plains
Rocky Mountains
Southeast
Southwest
to the location of these regions near
major ports as well as population density.
The Southeast, West and Mid-Atlantic
regions contain the most highly trafficked Establishments
shipping ports in the country. In Population
addition, all four these regions contain SOURCE: WWW.IBISWORLD.COM
some of the highest populated states in

the country. For example, California concentration of establishments in the
contains the majority of industry Mid-Atlantic region, with 9.1% and
establishments located in the western 5.9% of industry establishments.
region, with 15.9% of industry Similarly, Illinois contains 6.7% of
establishments. This is in line with the industry establishments, making it one
state’s 12.1% share of the population and of the largest states by number of
its proximity to manufacturers. New York industry establishments in the Great
and New Jersey contribute notably to the Lakes region.

Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalization
Market Share The Paper Bag and Disposable Plastic one company to dominate a large
Concentration Product Wholesaling industry is portion of the national market.
characterized by a low level of market Wholesalers have increasingly
concentration. In 2018, the four largest attempted to act as a one-stop-shop for
Level
operators accounted for only 14.0% of customers and have thus increased the
Concentration in industry revenue. Most industry type of products they distribute. As a
this industry is L ow operators are small- to medium-sized result, industry operators have acquired
operators and operate in local or competitors to broaden their product
regionally focused markets to minimize lines. While this has increased market
transportation costs to their key concentration, the level ultimately
markets. This makes it difficult for any remains low.
Key Success Factors Proximity to key markets Highly trained workforce

Being close to major retailers in urban Due to advances in computerized
areas will reduce transportation costs and technology across the industry in the past
IBISWorld identifies enable fast and timely delivery. This is 10 to 15 years, it is necessary to that all
250 Key Success important for customer service employees are computer literate to
Factors for a satisfaction and cost containment. increase employee productivity.
business. The most
Proximity to key suppliers Ability to pass on cost increases
important for this
Being located close to suppliers (i.e. Since margins are so competitive,
industry are: manufacturers) of paper and plastic the average wholesaler cannot afford
products will cut wholesalers’ transportation to bear the cost of price increases
costs, increasing profit margins. from manufacturers.
Access to the latest available and most Superior financial management

efficient technology and techniques and debt management
Using the best available stock control, The ability to manage the cost of
ordering, financial and decision support establishing a new warehouse and
systems is important, as competition is managing other financial matters, such as
high and profit margins are tight; hence, debt, is crucial to remaining in an
efficiency must be maximized. industry with tight profit margins.
Cost Structure The cost structures of most operators in Profit

Benchmarks the Paper Bag and Disposable Plastic In 2018, profit, measured as earnings
Product Wholesaling industry are similar before interest and taxes, is estimated to
in the sense that purchases account for represent 3.2% of revenue for industry
the bulk of revenue, as is the case with operators. This is higher than 2013, in
most wholesale industries. However, which 2.5% of revenue was accounted for
overall profitability is dependent on the as profit. Increases in profit over the
size of the wholesaler, the level of period were primarily due to price
technology that is used to contain decreases for key inputs such as plastic
operating costs and increase overall materials and resins. During the five-year
efficiency, as well as the types of period the price of plastic material and
downstream customers that are served. resins decreased an annualized 0.9%.

Cost Structure Decreases in prices in upstream inputs Wages

Benchmarks lowers the cost to acquire products for In 2018, wages are estimated to
industry operators and helps to boost represented 5.7% of industry revenue. In
continued
profit margins. comparison, wage costs in 2013 were
lower at 5.5% of revenue. This equates to
Purchases an annualized increase of 1.7% in total
Purchases are the largest component of wage expenditure over the five-year
industry cost structure, similar to other period. This can be primarily attributed to
wholesaling industries. In 2018, an increase in the average industry wage
purchases are estimated to account for and increasing employment. Over the five
77.7% of revenue. Wholesale operators years to 2018, the number of industry
purchase bags, cardboard boxes, cartons, employees has increased an annualized
cups, single-use utensils and tissue 1.4%. This has primarily driven growth in
products from domestic distributors and total wage expenditure, although a 0.3%
manufacturers of these products. In annualized increase in the average wage
2013, the purchases represented a has also contributed as well.
slightly higher share of revenue, at 78.1%.
Decreased purchase costs are likely due Depreciation, rent and other
to the decreased cost of inputs necessary In 2018, depreciation is estimated to
at the production level, thereby account for 0.5% and has remained
decreasing the cost to industry operators constant over the period. Operators in
to acquire products from upstream the Paper Bag and Disposable Plastic
manufacturers and other wholesalers. Products Wholesaling industry,
Sector vs. Industry Costs
Average Costs of
all Industries in Industry Costs
sector (2018) (2018)
100
4.0 3.2 n Profit
5.3 5.7 n Wages
n Purchases
80 n Depreciation
n Marketing
n Rent & Utilities
n Other
Percentage of revenue
60
79.1 77.7
40
20
0.5 0.6 0.2 1.1 0.5

1.5
9.0 11.6
0

Cost Structure comparatively, have low capital category include rent and utilities,
Benchmarks intensity requirements due to the which accounted for 1.1% of industry
nature of the service they provide and revenue, and marketing which is
continued
therefore depreciation has remained estimated to account for 0.2% of
low. Other cost components in this industry revenue.
Basis of Competition Competition in the Paper Bag and specifications or it will be returned to the
Disposable Plastic Product Wholesaling wholesaler for replacement.
Level & Trend industry is high but steady because there Timeliness and speed of delivery are
are many small companies and integral to generating repeat sales.
ompetition
C in this nonemployers with low market shares Therefore, the location of a wholesaling
industry is H
ighand operating within this industry. operation and its proximity to key
the trend is S teady Competition is particularly intense in the customers are important in regard to
Mid-Atlantic, Southeast and West regions meeting delivery deadlines and reducing
because the concentration of industry transportation costs. Large wholesalers
establishments is highest in those with the distribution power to supply
regions. Barriers to entry are low, leading multiple locations nationwide will also be
to many industry operators, and a favored over businesses that cannot.
consequently higher level of competition. Additionally, wholesalers can also offer a
superior level of service through
Internal competition increased hours of operation and
Competition with other industry improved customer service.
wholesalers is based mainly on product Another important component of
price and quality. Retailers want to pay competition is the breadth of products
the lowest possible price for a given and brands offered by wholesalers. An
product or brand to maximize their own extensive product range is important
profit. Distributors can negotiate exclusive because it gives the retailers a one stop
contracts with retailers to reduce prices on shop for supply orders. This is
large volume purchases, and therefore particularly significant because some
preserve their own profit margins. These items provided by the industry are direct
are usually large-scale distributors with substitutes, such as paper and plastic
sufficient production capacity to offer high bags. Therefore, selling both products
volume products at lower prices, and with hedges a supplier’s risk to any changes in
sufficient locations in various geographic demand for substitutes.
regions. Given the competitive nature of Retailers and customers alike
the wholesale industry, industry prices are develop brand loyalties; consequently,
expected to continue to experience aggressive marketing by both
downward pressure. manufacturers and wholesaling agents
Quality is also an important component, can be vital for generating initial sales.
as customers try to increase the value per By identifying popular brands and
dollar of their purchases. Quality may products early on, wholesalers can take
include durability and innovations that advantage of increased retailer demand.
make disposable products more appealing Wholesalers using direct-selling
to customers, such as using recycled techniques compete internally for
materials. The quality of materials used to exclusive contracts with manufacturers
make the product must meet exact for popular brands and products.

Basis of Competition External competition with operators providing reusable

continued Paper bag and disposable plastic product diapers, plates, cutlery, and cloths (as
wholesalers also compete with opposed to paper towels or napkins).
distributors of substitute products. Some External competition in this industry,
of these substitutes in packaging include: however, is much weaker compared with
wooden crates, glass or metal containers. competition among industry players, as
Furthermore, as the industry provides substitution is less common between
single-use items, the industry competes single-use and reusable products.
Barriers to Entry The Paper Bag and Disposable Plastic

Product Wholesaling Industry has low Barriers to Entry checklist
Level & Trend barriers to entry, primarily given the low Competition High
capital requirements needed to start a Concentration Low
arriers to Entry
B
wholesaling enterprise. New businesses Life Cycle Stage Mature
in this industry are will need to secure a warehouse or an Capital Intensity Low
Lowand S teady operational facility and equipment such as Technology Change Medium
computers, vehicles and forklifts. Of Regulation and Policy Light
course, the level of capital intensity will Industry Assistance None
vary between establishments based on the
size of their operations. However, SOURCE: WWW.IBISWORLD.COM
compared with other industries that

require higher amounts of capital officers, staff for marketing,
investment, such as most manufacturing management, administrative, and
industries, start-up costs for the Paper Bag similar duties. Since the type of labor
and Disposable Plastic Product required is not skilled, it is comparably
Wholesaling industry are low. Depending less difficult to secure staff for
on the state of commercial lending in the operations if necessary. Again, the
United States, securing the necessary quantity of labor needed is dependent
capital from financial institutions to begin on the size of operations. Further,
operations might be more or less of a nonemployers operating in the
barrier to entry for new industry entrants. industry, which make up an estimated
Labor is another requirement for 40.0% in 2018, do not experience this
entering the industry. Typical barrier to entry, since they do not
employees include floor staff, sales employ other labor besides themselves.
Industry Foreign ownership in most wholesaling United States is very strong means that it is
Globalization industries is low since companies engaged difficult to implement regular price
in distributing industrial and consumer increases. Therefore, low profit returns for
products tend to have a regional focus. foreign companies seldom make it
Level & Trend There is little incentive for foreign worthwhile to invest in this industry. One
lobalization
G in companies to invest in wholesaling paper of the few examples of international
this industry is bag and disposable plastic products due to companies operating in this industry is
Lowand the trend the low margins, high transportation costs Bunzl, a British company, which distributes
and high levels of competition. The fact products across Europe, the United States
is I ncreasing
that competition for sales to retailers in the and the Asia-Pacific region.

Major Companies
Sysco Corporation | Veritiv Corp. | Other Companies
Major Players
(Market Share) Veritiv Corp. 5.1%
89.6%
Other
Sysco Corporation 5.3% SOURCE: WWW.IBISWORLD.COM
Player Performance Sysco Corporation (Sysco) distributes through SYGMA, the company’s
food and its related products to the food distribution subsidiary. Product
service industry and food-away-from- examples include disposable paper and
Sysco Corporation home industries. It is one of the largest plastic napkins; plates, cups and food
Market Share: 5.3% global distributors operating in this storage containers; restaurant and
space. The company provides products to kitchen equipment and supplies; and
more than 600,000 customer locations. cleaning supplies. Currently, the
This includes restaurants, healthcare and company estimates that it serves 16.0% of
educational facilities, lodging the annual food service market, which
establishments and other food service represents a substantial source of
customers. The company was founded in demand for industry products.
1969 and went public in 1970. The
company categorizes its operations into Financial performance
four segments: US Foodservice Over the five years to 2018, industry-
Operations, International Foodservice relevant revenue for the company is
Operations, SYGMA and Other. In 2018, forecast to increase an annualized 3.8%
total company revenue for Sysco is to $4.4 billion. Increased consumer
estimated to be $61.0 billion. confidence during the period has driven
Sysco operates in the Paper Bag and revenue growth for restaurants,
Disposable Plastic Product Wholesaling translating into increased demand for
industry through its sales of paper and Sysco products, which fluctuates
disposable and janitorial products sold according to client customer traffic. In
Sysco Corporation (US industry-specific segment) - financial

performance*
Revenue Operating Income
Year ($ million) (% change) ($ million) (% change)
2013 3,655.2 N/C 124.7 N/C
2014 3,883.2 6.2 98.1 -21.3
2015 4,043.1 4.1 148.5 51.4
2016 3,551.7 -12.2 131.7 -11.3
2017 4,057.1 14.2 160.9 22.2
2018 4,408.6 8.7 170.7 6.1
*Estimates
SOURCE: ANNUAL REPORT AND IBISWORLD

Major Companies
Player Performance addition, the company has continued to one-stop shop for customers, referred to
continued pursue growth through acquisitions and as the “One Sysco” approach, by
by broadening its product mix. The improving customer service and growing
company aims to grow by acting as a its product mix.
Player Performance Veritiv Corp. (Veritiv) is a publicly traded industry. The company operates in this
company headquartered in Atlanta that industry through its packaging and
conducts business-to-business wholesale facility solutions segments. Industry-
Veritiv Corp. distribution and provides facility relevant products include corrugated
Market Share: 5.1% management, as well as print and boxes and folding cartons, custom
publishing products. It also provides shipping containers, corrugated pallets,
logistics and supply chain management packaging supplies, stretch film, shrink
services. It was established in 2014, when packaging, retail packaging supplies and
International Paper completed a spinoff protective packaging and cushioning
and formed a new public company under among other various products.
the name Veritiv. The company serves a
wide variety of industries and operates Financial performance
distribution centers throughout the Over the five years to 2018, industry-
United States, Canada and Mexico, relevant revenue is expected to grow at
employing about 8,900 people. The an annualized rate of 12.1%, to total $4.2
company serves the manufacturing, food billion. Operating profit has been volatile,
processing, printing and publishing, with the company experiencing losses in
commercial building, education, several years. Losses in operating income
government and retail industries under can be attributed to the reorganization of
well-known brand names as well as their the company’s structure that took place
own private label. In 2018, company in 2014. In 2018, operating profit is
revenue is expected to total $8.8 billion. anticipated to be negative $24.4 million.
Veritiv offers turnkey solutions to Over the period, increasing revenue was
clients, offering not only packaging but due to growth in their packaging
design and printing services as well, segment, in which the company serves a
although these are not relevant to the variety of high-growth industries. Moving
Veritiv Corp. (US industry-specific segment) - financial performance*

Revenue Operating Income
Year ($ million) (% change) ($ million) (% change)
2013 2,382.7 N/C -0.8 N/C
2014 3,079.0 29.2 -2.7 -250.7
2015 3,761.8 22.2 33.9 1,374.8
2016 3,742.1 -0.5 34.1 0.6
2017 4,011.5 7.2 10.2 -70.2
2018* 4,225.5 5.3 -24.4 -339.9
*Estimates
SOURCE: ANNUAL REPORT

Major Companies
Player Performance forward, the company anticipates that expected decline in their print and
continued it will rely heavily on revenue growth publishing segments. As a result, this is
from the packaging and facility anticipated to drive industry-relevant
solutions segments to offset the revenue growth for the company.
Other Companies The Paper Bag and Disposable Plastic

Product Wholesaling industry is highly
competitive, with most companies holding
a small percentage of market share.
Other Company Bunzl PLC (Bunzl) is an international cleaning and hygiene and safety
Performance wholesale distributor with operations in products. Examples of industry-
North America, Europe and Asia. The relevant products include food
company is headquartered in London packaging, disposable tableware and
Bunzl PLC and has been operating in North goods not for resale such as food
Market Share: 2.3% America since 1981 when it acquired packaging, films, and labels sold to
the Jersey Paper Company. As of 2017, supermarkets and grocery stores. In
the company reports a total of 6,071 2018, the company is expected to
employees throughout its North generate $1.9 billion in industry-
American operations. Bunzl provides a relevant revenue through sales to food
wide variety of products to businesses, service providers, supermarkets and
including food service, grocery, grocery stores.
Other Company Uline Inc. is a distributor of shipping, cardboard boxes and mailers,
Performance industrial and packaging materials in disposable paper products, trash
North America. The company was liners, labels, kraft paper, air pillows
founded in 1980 and is currently and other types of foam cushioning.
Uline Inc. headquartered in Pleasant Prairie, WI. The company also provides disposable
Market Share: 1.3% The company employs an estimated paper and plastic food service
6,000 employees and operates products, as well as paper and plastic
distribution centers in Georgia, packaging materials for retail
Illinois, Texas, California, Minnesota, establishments. In 2018, industry-
Pennsylvania, Washington, Mexico and relevant revenue for the company is
Canada. Products include an array of expected to total $1.4 billion.

Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility
Regulation & Policy | Industry Assistance
Capital Intensity Similar to other wholesaling industries,

IBISWorld estimates that the Paper Bag and Capital Intensity
Capital units per labor unit
Disposable Plastic Product Wholesaling
Level
industry has a low level of capital intensity. 0.5
The levelof capital In 2018, for every $1.00 spent on labor,
intensity is L ow industry operators are expected to spend 0.4
$0.09 on capital investments. Over the past 0.3

five years, this level of capital intensity has
remained unchanged. Industry capital 0.2
expenditures are typically used on computer 0.1

systems, warehouse space, shelving,
forklifts, and distribution vehicles. Many 0.0
Economy Wholesale Paper Bag &
industry operators have invested in capital Trade Disposable Plastic
Product Wholesaling
upgrades, though net capital expense Dotted line shows a high level of capital intensity
growth remains low. In general, operators in SOURCE: WWW.IBISWORLD.COM
this industry rely more heavily on labor,

with wages estimated to account for 5.7% of 2018, illustrating the continued importance
total industry revenue in 2018. Employment of labor to industry operators and will
is expected to grow over the five years to keep capital intensity low.

Technology & Systems There have been considerable can be programmed to automatically
technological advances in the Paper Bag reorder once stocks fall below a specified
Level and Disposable Plastic Product level. Other technological developments,
Wholesaling industry over the past such as electronic data interchange
The level
of decade. Inventory control and retail (EDI), have improved product
technology change ordering has become computerized. management, pricing, sale and delivery.
is M
edium Modern inventory control systems use EDI enables instantaneous data transfer
barcodes and radio frequency between customers and wholesalers.
identification tags to provide real-time Over the past five years,
data on inventories and order quantity. technological advances have increased
Automated systems can also tag and employee productivity, time efficiency,
prepare the products for dispatch. sales volume, customer service and
Furthermore, the system can margin of error. While these
electronically schedule shipments from technology advances have made it
suppliers before overall stocks reach a easier for industry operators to
critical level. Suppliers are issued with manage inventory and other
time slots and labels to indicate when businesses functions, they have not by
and where to deliver the products. any means provided a replacement for
Customers are also using human labor. Therefore, despite these
replenishment practices that link their advances, employment in the industry
computer systems to the wholesaler to is expected to grow over the 10 years to
monitor available stock and reorder 2023, and capital intensity is expected
products. Monitoring computer systems to remain low.
Revenue Volatility The Paper Bag and Disposable Plastic depend on consumer traffic. For example,
Product Wholesaling industry has sanitary products sold to retailers and
exhibited a low level of revenue volatility packaging products sold to grocery stores
Level
over the five years to 2018. Like other are less likely to be volatile, whereas
The level of wholesaling industries, revenue volatility sanitary products sold to restaurant
volatility is L ow at the wholesale level is dependent on the establishments are more likely to be
nature of and variety in its downstream sensitive to changes in consumer
industries. Products sold to restaurants spending. In general, this industry has
or food service establishments that are such a wide variety of product offerings,
more susceptible to changes in consumer that revenue decreases from some
spending might exhibit higher volatility products are offset by increases in other
than products sold to households or products, helping to maintain a low level
products used by businesses that do not of volatility.

Revenue Volatility
continued
Regulation & Policy The regulations that affect the Paper Bag regulations, states have enacted their
and Disposable Plastic Product own antitrust laws to ensure that
Wholesaling industry are mainly in the competition among businesses is
Level & Trend areas of intellectual property and anti- maintained, providing the public with
he level of
T trust laws. Wholesaler trademark holders superior pricing and quality. Further
Regulation is must comply with US Patent and regulations related to shipping
Lightand the Trademark laws that relate to the regulations between states apply to the
protection of intellectual property rights. industry, which can sometimes make it
trend is S
teady
Penalties are imposed on the infringement difficult for wholesalers to transport
of patents. Wholesalers of paper bags and across state lines. Wholesalers must also
disposable plastic products will often abide by noise pollution regulations,
market particular brand names, which which are monitored by the
may have registered trademarks. It is Environmental Protection Agency.
essential that these wholesalers do not
engage in the sale of other products that Plastic bag bans
attempt to use the same trademark. Over the past five years, public
Furthermore, to avoid product recalls and opposition to single-use plastic bags has
anti-competitive trading, it is necessary increased. Several cities, such as Seattle,
for industry wholesalers to ensure that Chicago, Los Angeles, San Francisco,
they do not sell any paper designs that Austin, and most recently Boston, have
infringe upon the patent of a banned the use of plastic bags at grocery
manufacturer. These requirements must stores and supermarkets. Other states
be followed by traders of all products and have also attempted to ban plastic bags at
services, and are not aimed specifically at checkout, although Hawaii and California
the Paper Bag and Disposable Plastic have been the only successful states so
Product Wholesaling industry. far. Other cities and counties have
There are various other regulations instituted plastic bag fees including
regarding unfair competition that affect Boulder, CO; New York, NY; Portland,
the way a wholesaler does business. In ME; and Washington DC, to name a few.
addition to the previously mentioned This has posed a threat to local

Regulation & Policy distributors specializing in plastic bag known, as it is possible for industry
continued products located in these cities. The operators to shift from distributing
overall long-term effects remain to be plastic to paper products.
Industry Assistance The Paper Bag and Disposable Plastic

Product Wholesaling industry does not
receive any industry-specific
Level & Trend government assistance in the form of
he level of
T subsidies or otherwise.
Industry Assistance
is N
oneand the
trend is S
teady
There is no industry
assistance.

Key Statistics
Industry Data Industry Price of plastic
Revenue Value Added Establish- Wages Domestic materials and resin
($m) ($m) ments Enterprises Employment Exports Imports ($m) Demand (Index)
2010 76,040.8 6,443.0 6,854 6,012 61,621 -- -- 4,085.7 N/A 210.1
2011 77,593.9 6,306.6 6,738 5,920 62,020 -- -- 4,134.0 N/A 229.7
2012 78,689.9 6,554.3 7,170 6,479 66,670 -- -- 4,351.0 N/A 235.2
2013 79,828.1 6,754.0 6,972 6,242 65,906 -- -- 4,359.1 N/A 245.3
2014 81,963.5 6,942.3 6,844 6,130 67,821 -- -- 4,647.3 N/A 257.0
2015 82,151.0 6,960.3 6,917 6,033 69,189 -- -- 4,824.4 N/A 228.0
2016 81,674.5 7,608.7 6,535 5,732 69,631 -- -- 4,668.4 N/A 218.5
2017 82,299.2 7,842.6 6,541 5,733 70,370 -- -- 4,715.2 N/A 232.7
2018 83,279.6 7,856.5 6,558 5,744 70,777 -- -- 4,748.2 N/A 237.3
2019 83,239.0 7,851.6 6,548 5,734 70,598 -- -- 4,738.2 N/A 241.8
2020 82,140.6 7,757.7 6,502 5,695 69,962 -- -- 4,691.5 N/A 246.2
2021 81,784.8 7,729.7 6,480 5,673 69,764 -- -- 4,676.9 N/A 251.5
2022 82,192.8 7,781.8 6,461 5,654 69,950 -- -- 4,691.5 N/A 257.1
2023 80,732.2 7,647.0 6,389 5,595 69,147 -- -- 4,631.7 N/A 263.0
2024 77,859.5 7,388.5 6,278 5,505 67,558 -- -- 4,513.6 N/A 269.0
Sector Rank 27/67 33/67 36/67 32/67 33/67 N/A N/A 31/67 N/A N/A
Economy Rank 125/694 296/694 363/694 343/694 382/694 N/A N/A 291/694 N/A N/A
Annual Change Industry Establish- Domestic Price of plastic

Revenue Value Added ments Enterprises Employment Exports Imports Wages Demand materials and resin
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
2011 2.0 -2.1 -1.7 -1.5 0.6 N/A N/A 1.2 N/A 9.3
2012 1.4 3.9 6.4 9.4 7.5 N/A N/A 5.2 N/A 2.4
2013 1.4 3.0 -2.8 -3.7 -1.1 N/A N/A 0.2 N/A 4.3
2014 2.7 2.8 -1.8 -1.8 2.9 N/A N/A 6.6 N/A 4.8
2015 0.2 0.3 1.1 -1.6 2.0 N/A N/A 3.8 N/A -11.3
2016 -0.6 9.3 -5.5 -5.0 0.6 N/A N/A -3.2 N/A -4.2
2017 0.8 3.1 0.1 0.0 1.1 N/A N/A 1.0 N/A 6.5
2018 1.2 0.2 0.3 0.2 0.6 N/A N/A 0.7 N/A 2.0
2019 0.0 -0.1 -0.2 -0.2 -0.3 N/A N/A -0.2 N/A 1.9
2020 -1.3 -1.2 -0.7 -0.7 -0.9 N/A N/A -1.0 N/A 1.9
2021 -0.4 -0.4 -0.3 -0.4 -0.3 N/A N/A -0.3 N/A 2.1
2022 0.5 0.7 -0.3 -0.3 0.3 N/A N/A 0.3 N/A 2.2
2023 -1.8 -1.7 -1.1 -1.0 -1.1 N/A N/A -1.3 N/A 2.3
2024 -3.6 -3.4 -1.7 -1.6 -2.3 N/A N/A -2.5 N/A 2.3
Sector Rank 54/67 54/67 48/67 45/67 54/67 N/A N/A 53/67 N/A N/A
Economy Rank 569/694 544/694 510/694 502/694 566/694 N/A N/A 566/694 N/A N/A
Key Ratios Imports/ Exports/ Revenue per Share of the

IVA/Revenue Demand Revenue Employee Wages/Revenue Employees Average Wage Economy
(%) (%) (%) ($’000) (%) per Est. ($) (%)
2010 8.47 N/A N/A 1,234.01 5.37 8.99 66,303.70 0.04
2011 8.13 N/A N/A 1,251.11 5.33 9.20 66,655.92 0.04
2012 8.33 N/A N/A 1,180.29 5.53 9.30 65,261.74 0.04
2013 8.46 N/A N/A 1,211.24 5.46 9.45 66,141.17 0.04
2014 8.47 N/A N/A 1,208.53 5.67 9.91 68,523.02 0.04
2015 8.47 N/A N/A 1,187.34 5.87 10.00 69,727.85 0.04
2016 9.32 N/A N/A 1,172.96 5.72 10.66 67,044.85 0.04
2017 9.53 N/A N/A 1,169.52 5.73 10.76 67,005.83 0.04
2018 9.43 N/A N/A 1,176.65 5.70 10.79 67,086.77 0.04
2019 9.43 N/A N/A 1,179.06 5.69 10.78 67,115.22 0.04
2020 9.44 N/A N/A 1,174.07 5.71 10.76 67,057.83 0.04
2021 9.45 N/A N/A 1,172.31 5.72 10.77 67,038.87 0.04
2022 9.47 N/A N/A 1,175.02 5.71 10.83 67,069.34 0.04
2023 9.47 N/A N/A 1,167.54 5.74 10.82 66,983.38 0.04
2024 9.49 N/A N/A 1,152.48 5.80 10.76 66,810.74 0.04
Sector Rank 44/67 N/A N/A 25/67 41/67 32/67 23/67 33/67
Economy Rank 663/694 N/A N/A 60/694 636/694 348/694 194/694 296/694
Figures are in inflation-adjusted 2018 dollars. Rank refers to 2018 data. SOURCE: WWW.IBISWORLD.COM

Industry Financial Ratios

Apr 2016 - Mar 2017 by company revenue
Apr 2013 - Apr 2014 - Apr 2015 - Apr 2016 - Small Medium Large
Mar 2014 Mar 2015 Mar 2016 Mar 2017 (<$10m) ($10-50m) (>$50m)
Liquidity Ratios
Current Ratio 1.6 1.5 1.6 1.6 1.6 1.6 1.5
Quick Ratio 0.8 0.8 0.8 0.8 1.0 0.8 0.7
Sales / Receivables (Trade Receivables
Turnover) 10.9 10.2 10.6 10.8 10.4 12.3 10.3
Days’ Receivables 33.5 35.8 34.4 33.8 35.1 29.7 35.4
Cost of Sales / Inventory (Inventory Turnover) 8.4 9.1 9.1 8.8 10.1 9.2 8.1
Days’ Inventory 43.5 40.1 40.1 41.5 36.1 39.7 45.1
Cost of Sales / Payables (Payables Turnover) 14.1 14.0 15.8 14.1 11.0 14.0 15.8
Days’ Payables 25.9 26.1 23.1 25.9 33.2 26.1 23.1
Sales / Working Capital 14.4 14.9 13.7 13.2 10.9 13.2 13.9
Coverage Ratios
Earnings Before Interest & Taxes (EBIT) /
Interest 5.9 5.8 5.7 6.7 5.0 7.2 7.8
Net Profit + Dep., Depletion, Amort. / Current
Maturities LT Debt 3.4 3.7 5.0 4.6 n/a 5.7 4.9
Leverage Ratios
Fixed Assets / Net Worth 0.3 0.3 0.3 0.3 0.1 0.4 0.5
Debt / Net Worth 2.0 2.1 2.2 2.2 2.4 1.9 2.4
Tangible Net Worth 28.9 30.3 29.7 30.7 27.1 35.1 26.1
Operating Ratios
Profit before Taxes / Net Worth, % 20.5 18.3 22.3 24.1 15.9 24.9 23.6
Profit before Taxes / Total Assets, % 5.9 5.4 6.4 6.1 5.0 8.7 6.1
Sales / Net Fixed Assets 59.2 61.1 74.7 47.0 100.2 42.0 23.0
Sales / Total Assets (Asset Turnover) 3.6 3.7 3.7 3.4 3.5 3.5 3.2
Cash Flow & Debt Service Ratios (% of sales)

Cash from Trading 23.7 22.9 22.1 23.4 24.5 25.4 21.9
Cash after Operations 2.2 1.7 3.0 3.1 3.2 3.4 3.0
Net Cash after Operations 2.4 2.4 3.1 3.1 3.6 2.6 2.2
Cash after Debt Amortization 0.2 0.1 0.5 0.6 1.7 0.6 0.2
Debt Service P&I Coverage 2.0 2.5 3.8 3.1 4.7 2.9 2.4
Interest Coverage (Operating Cash) 5.7 4.8 6.1 6.5 8.4 5.5 5.1
Assets, %
Cash & Equivalents 5.6 6.9 6.9 7.3 9.8 8.1 3.9
Trade Receivables (net) 35.7 36.5 37.6 33.1 36.2 33.1 30.6
Inventory 32.6 30.2 31.9 30.7 28.3 31.0 32.3
All Other Current Assets 2.3 2.9 2.7 3.2 4.8 2.7 2.7
Total Current Assets 76.2 76.4 79.0 74.3 79.1 74.9 69.4
Fixed Assets (net) 14.0 13.5 11.7 13.6 8.0 15.8 14.6
Intangibles (net) 4.3 3.9 4.4 5.8 2.9 5.5 8.9
All Other Non-Current Assets 5.5 6.2 5.0 6.3 10.2 3.8 7.1
Total Assets 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Total Assets ($m) 2,660.8 3,095.1 3,612.4 3,127.9 55.2 574.3 2,498.3
Liabilities, %
Notes Payable-Short Term 15.5 14.1 16.8 15.0 12.9 14.0 18.2
Current Maturities L/T/D 2.8 4.0 2.1 2.1 1.4 2.0 2.9
Trade Payables 24.9 25.1 21.9 21.9 25.6 22.0 18.8
Income Taxes Payable n/a 0.2 0.1 0.2 0.4 0.2 0.1
All Other Current Liabilities 9.4 7.9 9.3 7.6 9.1 6.8 7.6
Total Current Liabilities 52.6 51.2 50.3 46.8 49.5 45.0 47.5
Long Term Debt 10.0 9.0 8.6 10.3 8.6 9.6 12.8
Deferred Taxes 0.5 0.4 0.3 0.3 0.1 0.4 0.3
All Other Non-Current Liabilities 3.7 5.2 6.7 6.1 11.5 4.4 4.4
Net Worth 33.2 34.2 34.1 36.5 30.0 40.6 35.0
Total Liabilities & Net Worth ($m) 2,660.8 3,095.1 3,612.4 3,127.9 55.2 574.3 2,498.3
Maximum Number of Statements Used 161 176 172 149 35 71 43
Source: RMA Annual Statement Studies, rmahq.org. RMA data for all industries is derived directly from more
than 260,000 statements of member financial institutions’ borrowers and prospects.
Note: For a full description of the ratios refer to the Key Statistics chapter online.

Jargon & Glossary
Industry Jargon COATED PAPERBOARDA type of paperboard that has POLYSTYRENE FOAMA thermoplastic substance used
been coated by a compound to impart certain qualities in disposable cutlery, plastic models, CD and DVD cases
to the paperboard, including weight and surface gloss, and smoke detector housings.
smoothness or ink absorbency. WHOLESALE BYPASSA popular trend in retail and
ELECTRONIC DATA INTERCHANGE (EDI)The manufacturing industries where producers supply goods
transmission of electronic documents between directly to stores, eliminating the middleman.
businesses from one computer system to another.
LAMINATED PAPERBOARDA type of paperboard that
has been placed between layers of plastic and sealed
with heat or pressure, usually with an adhesive.
IBISWorld Glossary BARRIERS TO ENTRYHigh barriers to entry mean that IMPORTSTotal value of industry goods and services
new companies struggle to enter an industry, while low brought in from foreign countries to be sold in the
barriers mean it is easy for new companies to enter an United States.
industry. INDUSTRY CONCENTRATIONAn indicator of the
CAPITAL INTENSITYCompares the amount of money dominance of the top four players in an industry.
spent on capital (plant, machinery and equipment) with Concentration is considered high if the top players
that spent on labor. IBISWorld uses the ratio of account for more than 70% of industry revenue.
depreciation to wages as a proxy for capital intensity. Medium is 40% to 70% of industry revenue. Low is less
High capital intensity is more than $0.333 of capital to than 40%.
$1 of labor; medium is $0.125 to $0.333 of capital to $1 INDUSTRY REVENUEThe total sales of industry goods
of labor; low is less than $0.125 of capital for every $1 of and services (exclusive of excise and sales tax); subsidies
labor. on production; all other operating income from outside
CONSTANT PRICESThe dollar figures in the Key the firm (such as commission income, repair and service
Statistics table, including forecasts, are adjusted for income, and rent, leasing and hiring income); and
inflation using the current year (i.e. year published) as capital work done by rental or lease. Receipts from
the base year. This removes the impact of changes in interest royalties, dividends and the sale of fixed
the purchasing power of the dollar, leaving only the tangible assets are excluded.
“real” growth or decline in industry metrics. The inflation INDUSTRY VALUE ADDED (IVA)The market value of
adjustments in IBISWorld’s reports are made using the goods and services produced by the industry minus the
US Bureau of Economic Analysis’ implicit GDP price cost of goods and services used in production. IVA is
deflator. also described as the industry’s contribution to GDP, or
DOMESTIC DEMANDSpending on industry goods and profit plus wages and depreciation.
services within the United States, regardless of their INTERNATIONAL TRADEThe level of international
country of origin. It is derived by adding imports to trade is determined by ratios of exports to revenue and
industry revenue, and then subtracting exports. imports to domestic demand. For exports/revenue: low is
EMPLOYMENTThe number of permanent, part-time, less than 5%, medium is 5% to 20%, and high is more
temporary and seasonal employees, working proprietors, than 20%. Imports/domestic demand: low is less than
partners, managers and executives within the industry. 5%, medium is 5% to 35%, and high is more than
ENTERPRISEA division that is separately managed and 35%.
keeps management accounts. Each enterprise consists LIFE CYCLEAll industries go through periods of growth,
of one or more establishments that are under common maturity and decline. IBISWorld determines an
ownership or control. industry’s life cycle by considering its growth rate
ESTABLISHMENTThe smallest type of accounting unit (measured by IVA) compared with GDP; the growth rate
within an enterprise, an establishment is a single of the number of establishments; the amount of change
physical location where business is conducted or where the industry’s products are undergoing; the rate of
services or industrial operations are performed. Multiple technological change; and the level of customer
establishments under common control make up an acceptance of industry products and services.
enterprise.
EXPORTSTotal value of industry goods and services sold
by US companies to customers abroad.

Jargon & Glossary
IBISWorld Glossary NONEMPLOYING ESTABLISHMENTBusinesses with WAGESThe gross total wages and salaries of all
no paid employment or payroll, also known as employees in the industry. The cost of benefits is also
continued nonemployers. These are mostly set up by self-employed included in this figure.
individuals.
PROFITIBISWorld uses earnings before interest and tax
(EBIT) as an indicator of a company’s profitability. It is
calculated as revenue minus expenses, excluding
interest and tax.
VOLATILITYThe level of volatility is determined by
averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
±20%; high volatility is ±10% to ±20%; moderate
volatility is ±3% to ±10%; and low volatility is less than
±3%.

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WWW.IBISWORLD.

Mixed bag: Competitive pricing pressures will

IBISWorld Industry Report 42413

2 About this Industry 18 International Trade 29 Revenue Volatility

www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

About this Industry

Main Activities The primary activities of this industry are

The major products and services in this industry are

Similar Industries 32221 Cardboard Box & Container Manufacturing in the US

32222 Coated & Laminated Paper Manufacturing in the US

32229a Sanitary Paper Product Manufacturing in the US

32229b Paper Product Manufacturing in the US

Provided to: Edeska (2129455405) | 23 October 2019

About this Industry

42411 Paper Wholesaling in the US

42412 Office Stationery Wholesaling in the US

Additional Resources For additional information on this industry

IBISWorld writes over 1000 US

Provided to: Edeska (2129455405) | 23 October 2019

Key Statistics Revenue Annual Growth 13–18 Annual Growth 18–23

$2.7bn $4.7bn 5,744

Industry Structure Life Cycle Stage Mature Regulation Level Light

Provided to: Edeska (2129455405) | 23 October 2019

Key External Drivers Consumer spending States. To ship products purchased by

Provided to: Edeska (2129455405) | 23 October 2019

Key External Drivers Price of paper increase, enabling revenue growth

Consumer spending E-commerce sales

Provided to: Edeska (2129455405) | 23 October 2019

Current Over the five years to 2018, the Paper Bag

options. Lower unemployment and

Stores industry (IBISWorld report 44511)

Provided to: Edeska (2129455405) | 23 October 2019

Internal price Industry revenue growth has been

Provided to: Edeska (2129455405) | 23 October 2019

Industry Over the five years to 2023, the Paper Bag

Rising competition Over the next five years, restaurants and

Provided to: Edeska (2129455405) | 23 October 2019

Industry structure As a result, consolidation activity is protect profit margins in anticipation of

Environmental Business and consumer concerns over

Provided to: Edeska (2129455405) | 23 October 2019

Provided to: Edeska (2129455405) | 23 October 2019

Provided to: Edeska (2129455405) | 23 October 2019

Products & Markets

Supply Chain KEY BUYING INDUSTRIES

KEY SELLING INDUSTRIES

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Products & Markets

Products & Services Products and services segmentation (2018)

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Products & Markets

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Products & Markets

Demand customers and decreased revenue, manufacturing division also tends to

Major Markets Major market segmentation (2018)

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Products & Markets

Provided to: Edeska (2129455405) | 23 October 2019

Products & Markets