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

                                    Feb 1, 2024 - Producer Price Growth Keeps Pace with Rising Wages
                                    • In Q4, producer prices charged by paper and paper product wholesalers were up slightly, and wages in the industry increased at a similar rate during the same time. Price growth keeping pace with rising wages may reduce pressure on paper distributors’ margins.
                                    • 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.
                                    • US boxboard production declined 10% in the fourth quarter of 2023 compared to Q4 2022, according to the American Forest & Paper Association (AFPA). The boxboard operating rate was 82.2% in the fourth quarter of 2023, down 4.9 percentage points from Q4 2022. US containerboard production increased 12% in the fourth quarter of 2023 compared to Q4 2022, according to the AFPA. Total US containerboard production for export increased 2.6% in 2023 over 2022.
                                    • In September, 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. Smurfit Westrock’s North and South American operations will be headquartered in Atlanta. The transaction is expected to be completed in the second quarter of 2024. However, in late December 2023, London-based activist fund Primestone Capital sent a letter to Smurfit Kappa expressing reservations about the deal and suggested Smurfit Kappa search for “strategic alternatives,” according to Recycling Today. Primestone, which holds about 0.8% of Smurfit Kappa’s issue shares, said, “Overall, the WestRock transaction risks deteriorating [Smurfit Kappa’s] business profile by creating a higher-cost, less integrated company, [while] increasing leverage for modest financial benefits for [Smurfit Kappa’s] shareholders.”
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