Paper Products Distributors

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 6,500 paper and paper product distributors in the US act as middlemen between paper products manufacturers and large customers, such as publishers, printers, government offices, corporate offices, manufacturers, resellers, and retailers. Companies may specialize in bulk printing and writing paper; stationery and office supplies; or industrial and personal service paper. Some large companies have retail operations.

Competition From Alternative Sources

Paper products distributors compete with a variety of alternative sources, including office supply superstores, office supply distributors, traditional retailers (mass merchandisers, warehouse clubs), manufacturers, and Internet retailers.

Push For Less Paper

Technology and the increasing concern over recycling and the environment have led to considerable efforts to reduce paper consumption.

Industry size & Structure

The average paper products distributor operates out of a single location, employs 18-19 workers, and generates $12-13 million annually.

    • The paper products distribution industry consists of about 6,500 companies that employ about 118,600 workers and generate about $82 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom; the top 50 firms account for about 70% of industry sales.
    • Some companies are vertically-integrated; converters may act as distributors and large distributors may have retail operations.
    • Large companies with paper distribution operations include Office Depot and Essendant (formerly United Stationers).
                                    Industry Forecast
                                    Paper Products Distributors Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Apr 4, 2024 - Weaker Industry Growth
                                    • The paper product distribution industry is expected to experience weaker sales growth for the next several years after posting strong growth in the two years following the onset of the pandemic. The industry’s year-over-year sales growth declined to -7.7% in 2020, then rose to 9.1% in 2021 and 15.5% in 2022 before falling to 1% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to moderate to 0.8% in 2024, then see steady average annual growth of about 1.1% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                    • In early March, British paper and packaging firm Mondi reached an in-principle deal to acquire fellow UK paper producer DS Smith in an all-share deal that valued DS Smith at 5.14 billion British pounds, according to Reuters. About three weeks later, US-based International Paper made a counter all-stock takeover offer for DS Smith, which valued the UK firm at 5.72 billion pounds. The International Paper offer would give DS Smith shareholders a 33.8% stake in the combined company, significantly lower than the 46% stake DS Smith shareholders would receive in the original proposed deal with Mondi. If either of the deals moves ahead, it would mark continued consolidation in the global paper and packaging industry. In September 2023, US packaging firm Westrock agreed to be acquired by Ireland-based Smurfit Kappa, which would create a new firm, Smurfit Westrock, to be headquartered in Ireland. With revenue of about $34 billion, the combined company would be the world’s largest publicly-listed packaging firm. The Westrock- Smurfit Kappa deal is expected to close in early July 2024, according to Packaging Dive.
                                    • Total US printing-writing (P-W) paper shipments dropped 1% in February 2024 compared to the same month in 2023, according to the American Forest & Paper Association (AFPA). Uncoated free sheet shipments were flat in February compared to February 2023, while coated free sheet shipments increased by 5%, and shipments of mechanical paper declined by 17%. Shipments of packaging papers and specialty packaging papers increased 5% in February over the same month in 2023.
                                    • Industry watchers suggest that demand is improving for paper packaging and tissue markets, according to Resource Recycling. By 2035, a global increase in paper packaging production is expected to drive demand for an additional 77 million short tons of recovered fiber, according to market research by AFRY Management Consulting. Boosted by resilient consumer spending and brand owners’ investments in sustainability goals, AFRY projects that corrugated packaging demand in the first quarter of 2024 will surpass year-earlier levels. The tissue market is also expected to post steady growth as demand from the restaurant and travel markets pushes out-of-home tissue production back to pre-pandemic levels.
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