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 6,200 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 $13.2 million annually.
- The paper products distribution industry consists of about 6,200 companies that employ about 116,000 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
Recent Developments
Jun 5, 2024 - Weak Industry Growth
- The paper product distribution industry is expected to experience weaker sales growth for the next several years. The industry’s year-over-year sales growth declined to 1% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to moderate further to 0.8% in 2024 before rising to about 1.1% in 2025, then see steady average annual growth of about 1.1% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- Even with the pandemic in the rearview, ecommerce spending has remained robust, and much of that online shopping is being fueled by hybrid workers who make purchases during the workweek, according to The Wall Street Journal. According to a report by researchers at Stanford University, Northwestern University, and the Mastercard Economics Institute, in 2023, consumers spent $375 billion more on online shopping than they would have if the pandemic had never happened. The study’s authors suggest much of that increase is due to people who still work hybrid or fully remote schedules. Sustained ecommerce demand is a significant business opportunity for manufacturers of paper packaging.
- Consumer packaged goods firms are making progress in developing a paper-based bottle, according to The Wall Street Journal. Packaged goods firms, including Procter & Gamble, Coca-Cola, Diageo, and PepsiCo, hope to develop a shelf-stable paper bottle that can tempt consumers concerned about plastic pollution and the carbon emissions of glass. However, making a purely paper bottle that keeps drinks fizzy and doesn’t get soggy or leak has proven challenging. Paper bottles currently on the market have a plastic liner, which can make them hard to recycle. Danish packaging firm Paboco is working on a paper bottle with a plastic liner that’s less than 5% of the package’s weight, which the company says is thin enough not to interfere with the recycling process.
- 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 (IP) made a counter all-stock takeover offer for DS Smith, which valued the UK firm at 5.8 billion pounds. The IP offer would give DS Smith shareholders a 33.8% stake in the combined company. In mid-April, DS Smith accepted IP’s offer, marking a continued consolidation in the global paper and packaging industry. In September, US packaging firm Westrock agreed to be acquired by Ireland-based Smurfit Kappa, which would create a new firm, Smurfit Westrock. The new company will be headquartered in Ireland and have estimated revenue of $34 billion. The Westrock- Smurfit Kappa deal is expected to close in early July 2024, according to Packaging Dive.
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