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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 7,000 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 17-18 workers, and generates about $12 million annually.

    • The paper products distribution industry consists of about 7,000 companies that employ about 123,000 workers and generate about $86 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

                                    Coronavirus Update

                                    Apr 19, 2022 - Russia’s Invasion of Ukraine Disrupts Paper Trade Flows
                                    • Russia’s invasion of Ukraine is disrupting global wood product trade flows, especially in Europe. According to Wood Resources International, Russia, Belarus, and Ukraine exported 34 million tons of lumber in 2021, and 25% of that volume was exported to countries that have sanctioned Russia and Belarus. Europe’s timber imports from Russia and Belarus accounted for nearly 10% of the continent’s consumption in 2021. Wood certification organizations Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC) have designated all timber from Russia and Belarus “conflict timber,” which cannot be used to manufacture certified products, including pulp and paper. Even after peace returns to Europe, timber trade flows have likely been permanently altered.
                                    • Seasonally adjusted wholesale sales of paper and paper products rose 0.8% in February compared to January and increased 23.7% year-over-year on an unadjusted basis.
                                    • Early in the pandemic, paper production for products used in packaging increased while printing-writing paper production declined significantly. The pandemic has increased e-commerce sales, driving higher demand for containerboard used to manufacture corrugated boxes. Lockdowns and working from home had the opposite effect on demand for printing and writing papers as many offices and schools closed. However, as businesses and schools reopen, printing-writing paper demand is rebounding. Total printing-writing paper shipments rose 1% in March 2022 compared to the same month a year earlier, according to the American Forest & Paper Association (AFPA). Total packaging papers and specialty packaging shipments fell 2% in February 2022 compared to February 2021.
                                    • As economies reopen and the pandemic eventually subsides, demand for paper products could bounce back to pre-pandemic norms or remain permanently changed. However, virtual office work and schooling from home have had a significant impact on global demand for writing and office printing papers, and some industry insiders doubt if demand will ever return to pre-pandemic levels. E-commerce and paperless efforts in offices and schools have slowly changed paper demand trends for years. The pandemic accelerated these trends and has made future demand even more challenging to forecast. Some industry insiders believe the comeback of the travel, hospitality, and restaurant industries will boost demand for the away-from-home tissue-grade paper market. Emergence from the pandemic and demand for more environmentally friendly packaging are expected to drive increased demand for corrugated containers.
                                    • Early in the pandemic, some paper products manufacturers lost access to some or all of the recycled pulp and paper used as inputs. A key cause of the declining availability of recycled pulp and paper was the business closures during the lockdown. Businesses are the source of most recyclable paper. The material is typically higher quality than what is gotten from residential recycling and is less expensive to collect. Higher demand for corrugated containers used in e-commerce combined with reduced paper recycling efficiency drove up prices for old corrugated containers (OCC) used to make recycled fiber-based containerboard.
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