When will the global supply chain return to pre-pandemic levels? It’s a billion-dollar question for the cosmetics packaging industry, with no short-term answer in sight.

What’s for sure though is that ongoing instability in the global supply chain continues to compel beauty brands to heavily weigh the pros and cons of sourcing their packaging domestically versus globally.

According to recent findings from the KPMG Supply Chain Stability Index, a resource from The Association for Supply Chain Management (ASCM) and KPMG LLP, 2023 was a year of tremendous improvement and increased supply chain stability; however several variables are still driving ongoing fragility.

One of the biggest culprits disrupting the global movement of goods is geopolitical tensions that continue to impact ocean freight, especially between Asia, the European Union, and the U.S.

A recent article published in the New York Times pointed to Houthi rebel activity in Yemen that has slowed the progress of ships through the Suez Canal en route to Asia, Europe, and the east coast of the U.S., forcing ships to take a lengthier route around Africa and adding up to two weeks to their journeys.

The severe drought in Central America also diminished water levels in the critical Panama Canal conduit, causing authorities to limit the number of international trade ships passing through. The impact of striking dockworkers on the U.S. East and Gulf coasts, German port longshore workers, and Canadian rail workers have also posed threats at important ports.

“While a complete return to pre-pandemic normalcy in 2024 is unlikely, there are positive developments such as the comeback of just-in-time inventory strategies and a slight easing of competition for talent in the labor market,” says Jim Lee, Supply Chain AI Leader at KPMG LLP. “However, the logistics sector still faces significant challenges due to geopolitical factors and volume fluctuations. It is important for supply chains to remain vigilant and adopt resilient strategies for continued progress.”

Beauty Packaging asked packaging suppliers about the current state of domestic sourcing and the impact it’s having on their businesses. Their responses convey the variety of advantages associated with sourcing packaging right here in the USA and North America.

A Conversation with Packaging Suppliers

Anomatic

Three things [have caused the drive toward “Made in USA/North America” packaging production within the last two years]. Number 1 is the need for agility; there is no surprise there. With speed to market being more critical than ever, “Made in America” for America is a necessity.

The volatility of the market requires agility to meet demands. Number 2 is cost. We are combating rising costs with importation taxes, freight as well as uncertainty of containers, and overall inflation costs.

Customers are saving a dollar where they can. Number 3 is sustainability. The transportation impacts and reduction in GHG is exponential, not to mention that Anomatic has built domestic supply chains for the most sustainable aluminum options in the industry with our U.S. partners.

We at Anomatic have built one of the most stable and robust supply chains here domestically [and] it has proven time and time again [to benefit] our customers. Now with our vertical integration on plastic, we control the full process from start to finish, giving us even more speed and agility.

Our location in the heart of New Albany Ohio’s Beauty Park, has afforded us synergies with all players in this space to provide an even more streamlined supply chain. The Park hosts some of the most talented individuals and companies in the industry. Combining this with our technical competencies, expertise, and state-of-the-art equipment has made us the success we are today.

I feel that sustainability and new regulations [that are] being enforced will accelerate the “Made in the U.S.” mentality for brands. With the upcoming elections, it could accelerate even quicker in this geopolitical environment.

Arkay Packaging

When the pandemic took root in 2020, companies’ reliance on foreign countries for parts evolved into a handicap due to supply chain disruptions and it became obvious that a more successful approach would be a reliance on domestic manufacturing to manage their workload. Arkay successfully survived the pandemic largely because of this tactic, and even today there remains great value to domestic production, including cost savings, access, shipping, timeline/speed to market, and supply chain advantages.

Lately, it has become even more important to strive for a “Made in USA/Made in North America” identity. We are in the midst of two international wars–Russia/Ukraine and Hamas/Israel–which are affecting production. There are also lesser-known global skirmishes that have physically restrained transportation of goods, such as the attacks in the Red Sea and Indian Ocean disrupting and curtailing shipping in that area.

At the end of the day, I believe it’s simply good optics to manufacture on American soil, subsidizing local employment and well-being. Sustainability is a strong component, as well. There is a growing acknowledgement of the benefits to limiting a company’s carbon footprint and to maintaining an ecologically friendly brand associated with American craftsmanship and regional demand. 

At Arkay, now in our 102nd year in business, we pride ourselves on being relevant in this area and the fact that we again, for the second consecutive year, achieved Platinum Level EcoVadis–an acknowledgement just 1% of the world’s suppliers attain–only serves to further highlight Arkay’s stewardship and our dedication to better our environment.

While the lure of cheaper labor and production costs overseas remains a decisive factor, if we’ve learned any lesson at all, it is that too much dependence on global entities can backfire and manufacturing domestically, including hiring domestically and improving our environment, can only become increasingly attractive in the years ahead.

C-Care

COVID effects on American supply chains are very well known. The last 4 years showed consumer goods brands and suppliers that global footprint driven by cost optimization may come at the expense of catastrophic service issues. Stock replenishment speed and launch agility have become two of the most important traits of successful players, and are heavily dependent on producing close to your end consumer.

We see brands valuing product availability versus cost, which favors Made in USA. Near-shoring has been the trend and we expect it to continue in the future unless there’s a technological edge preventing it—which you may see with some players in the beauty market, with companies in Korea, Germany, and Italy, for example.

We had situations where lead times remained incredibly long and our customer demand continued to see immense fluctuations. This forced our teams to analyze the customer demand variability together with their supply planners, and set some level of safety stocks and safety times to offset transit times from Europe or Asia. These are not breakthrough solutions in the market, but we are forced to proactively critique our customer forecasts and offer remedies to mitigate their volatility, which is much appreciated by them.

There are talks about a new manufacturing renaissance in the USA as companies see a benefit in being closer to their end consumer, as well as getting access to high-quality suppliers of materials and manufacturing equipment. These principles are valid across all industries and packaging will not be different.

Eventually, automation will set a pretty even playing field when it comes to labor costs between the U.S. and other countries (that have had the labor competitive advantage), and for this, you need access to funding to fuel your CAPEX, in which the U.S. remains one of the best economies to do so. Overall, for American companies doing the right level of investments, they will likely develop a large moat versus international suppliers because of 1) proximity to market/speed; and 2) equivalent OPEX.

CO II Packaging

Cumbersome logistics freight costs, and quality have definitely contributed to bringing back packaging production to the USA. “Made in America” has and always will have a value to our economy [offering] faster turnaround production timelines, superior quality, and reduced shipping costs. It would create jobs and opportunities as well as enhance our productivity and economic growth.

Our ability to grow and produce quality, on-time manufacturing, cost-effective products for our clients…has made the USA more economically healthy. We have become a global society and have diverted our attention to the growth of many products, brands, and manufacturing in these other countries, all taking away our ability to manufacture here in the USA. It is our time now to bring it back!

Consumers will feel better about purchasing something made in America [and] many suppliers will have a local business growth with all the benefits. Brands can be proud that they are supporting Made in the USA and controlling environmental initiatives.

All of our cartons, sleeves, vial cards, wraps, and gift packaging at COII are designed and produced here in the New York metro area. We are a quality printer with years of experience and uncanny innovations, and handle all with sustainability as a priority. COII Packaging excels in production speed to market. Our abbreviated turnaround time has been able to accommodate and alleviate any supply chain issues, especially in the promotional packaging arena.

I see a future of growth and opportunities for all American manufacturing. It will create new jobs, new innovations, and grow more research and development.

Related: Making Connections Through Cartons

ICONS|America

Over the past years, the drive toward “Made in USA/North America” packaging production has been significantly influenced by several key factors. The most critical factors have been the need for faster lead times and speed to market, as well as global targets to reduce carbon footprint. In today’s world, especially with trends driven by social media, timing is crucial for our customers’ product launches.

ICONS|America, located near Charlotte, NC, provides our North American customers with a USA manufacturing solution, reducing their carbon footprint and transportation lead times.

Sustainability is transforming our business landscape. Our recyclable mono-material PP tubes are available with PCR and this, coupled with our ISCC PLUS certification, exemplifies our commitment to a sustainable future.

The ISCC PLUS certification focuses on three pillars: people, planet, and prosperity, and at ICONS|America, we prioritize all pillars ensuring our team understands our commitment to preserving the planet using sustainable, certified materials and providing manufacturing solutions that help reduce our carbon footprint. This focus on sustainability not only benefits the environment but also drives prosperity.

We anticipate the demand for made-in-USA manufacturing to continue to grow along with increased demand for reduced lead times and on-shore manufacturing options that help brands reach their carbon footprint reduction targets. With ICONS|America’s in-mold label (IML) injected tube technology, we provide a fully recyclable product made entirely from mono-material polypropylene.

Within the year, we target to expand our quality packaging products at ICONS|America to include additional innovative tube designs, caps, bottles, and jars. The future of “Made in USA/North America” packaging looks promising and impactful.

JP Packaging

There is a drive pushing “Made in USA/North America” on more than a few fronts. “American-made” means American jobs—and that has weight in today’s economy. Delivering and exceeding customers’ needs and keeping promises made by being here in the U.S. is a value to our customers. Coupled with customer service and account management in similar time zones with no language barriers is a big win for customers.

Since JP Packaging sources and produces all of what we do here domestically, we have an edge: tighter quality control, greater flexibility on options and changes, and speed to market. This is serving our customers’ needs and turning them into returning customers.

Based on the above, I only see “Made in USA” being a must-have on the part of our customers and their supply chain management.

JSN Industries

To JSN, “Made in USA” means the ability to offer critical response time and direct personal accessibility to our customers. Outstanding service is essential to meet current fluctuating needs such as increased PCR % and sustainability targets, regulatory copy changes and constantly changing ingredients, artwork revisions and approvals, and changing inventory levels—all needing to be accomplished with quick response and reliability through production to shipment. Much of this response would be hindered and delayed by working outside our country.

For example, recently we’ve had several existing major customers who’ve relaunched their entire product lines—multiple SKUs with new tube and cap colors, deco, and increased sustainability targets. We worked extremely closely with them, often daily, [on] stability testing to tough final deco approvals, to tube shipments meeting launch deadlines.

Several new customers have come to JSN after tiring of working outside of the USA. Foreign pricing did not compensate for dealing long-distance with quality complications and distant customer support. Working within USA/North America allows for closer collaboration in the packaging producer/purchaser relationship. Generally, there are huge benefits in language, shipment times, currency, even time zone, and communication simplification.

Overriding other advantages of USA production, we believe in the patriotism of personal investment in our own country, contributing in our own way to its economic activity, and supporting our own JSN manufacturing employees living in California, versus producing outside the USA and importing products for sale. [Another] bonus is that our in-house manufacture allows us to meet directly with our customers who can visit to see their products produced and decorated.

Related: A Rise in Consumer-Friendly Cosmetic Tubes

Lombardi Design & Manufacturing

The pandemic highlighted the weaknesses in global supply chains, leading companies to produce more locally. This trend has grown because it reduces risk, shortens lead times, and other logistical benefits. For brands, this change will initially increase production costs, but will also improve supply chain stability and may boost brand loyalty. Consumers might see higher prices, but they’ll have the confidence of knowing they are receiving higher quality and more ethically produced goods.

Looking ahead, the trend toward “Made in USA/North America” packaging is expected to continue. Companies will keep seeking stability, adhering to trade regulations, and meeting consumer demands. Technological advancements such as automation make domestic production more competitive. With the increased cost coming out of China, U.S. pricing will become comparable for certain items. Additionally, the growing demand for sustainability will favor locally produced packaging.

Plastube

The recent interest in the repatriation of the supply chain to North American suppliers is driven by the need to secure and insolate supply from external disruptions that cannot be anticipated or managed. Disruption caused by logistical issues in transportation, regional political events, or instability is an incentive to use North American suppliers.

In addition, ease of communication and sampling and overall ease of service in working with a local supplier is an advantage. If a brand cannot bring their product to market on time it will impact not only profitability but brand credibility. No brand wants to be back-ordered or out of stock if goods are delayed due to circumstances outside of their control.

Brands will always consider lower-cost offshore suppliers. However, if a brand cannot meet critical dates for launches, sales commitments, and other commercial factors, pricing becomes a secondary concern. Securing on-time and quality packaging from a North American supplier at reasonable prices, is preferable to being out of stock or not meeting sales objectives. For this reason, many brands are rethinking offshore suppliers as a significant part of [their] supply chain.

Viva Healthcare Packaging

Melanie Gaudun, Manager, Business Development & Marketing, Viva Healthcare Packaging

The shift toward “Made in North America” packaging has been driven by several key factors over the past two years. Brands are increasingly prioritizing sustainability and environmental responsibility (ESG) to align with consumer expectations for greener practices.

Producing in North America instead of overseas helps achieve these goals by significantly reducing the carbon footprint associated with long-distance transportation of goods. There is [also] a growing consumer preference for domestically made products, which are often perceived as higher quality and safer. This trend has encouraged brands to source packaging solutions locally to meet these expectations.

The pandemic exposed the fragility of global supply chains, leading to extra tariffs, severe delays, and unpredictability. In response, companies began to recognize the importance of having more control over their supply chains. This has driven a significant shift toward domestic production, ensuring stability and continuity of packaging supply. By moving production closer to home, companies can better navigate disruptions and maintain a reliable flow of materials.

Federal and state/provincial governments in North America have [also] introduced incentives to encourage domestic manufacturing. These incentives include tax breaks, grants, and subsidies, making it more attractive for companies to produce locally. This shift positively impacts brands by allowing them to align more closely with sustainability goals and meet consumer demand for high-quality, locally made products. Suppliers benefit from strengthened relationships and more predictable production schedules. Consumers enjoy greater product availability and confidence in the safety and quality of domestically produced goods.

Because “Made in North America” packaging solutions offer sustainable practices, technological innovation, customization, supply chain resilience, regulatory compliance, and economic benefits, [domestically sourced packaging solutions] are well positioned for continued growth. 

Oliver Inc. Earns Another G7 Master Certification Idealliance has awarded the Cleveland, OH, facility of Oliver Inc. G7 Master Certification in recognition of its commitment to the highest standards in printing and packaging color accuracy and consistency in color management, ensuring printed materials maintain a consistent visual appearance across various devices and substrates. It’s Oliver’s fourth location to earn this certification. The certification process involved rigorous testing and calibration of equipment, ensuring adherence to the G7 methodology’s core principles, including grayscale calibration, gray balance, and the Neutral Print Density Curve (NPDC). By achieving this certification, Oliver is part of an elite group of printing facilities capable of delivering visually consistent, high-quality materials.

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