Energy costs for the conversion of raw materials to paper have also made a big impact on paper prices. Between second quarter 2006 and the same period 2007, natural gas prices rose 15.1 percent; between 2007 and 2008, they soared 59.6 percent. Much less dramatic, but still significant, has been the rise in electricity costs, a 5.75 percent increase between first quarter 2006 and 2007, another 2.8 percent between 2007 and 2008.
Industrial chemicals have risen by 4.8 percent between second quarter 2006 and 2007 across the board, with another 24.8 percent leap between 2007 and 2008. Corn-based starch alone is up 50 to 70 percent over 2007 (due to the demand for ethanol). Sulfuric acid, currently $450 per ton, is expected to reach $1,100 per ton by the end of the year. Caustic soda, $300 a ton in 2007, has doubled in price this year.
Diesel prices, which affect both inbound raw material and outbound finished product costs, doubled between the start of 2005 to 2008 and are projected to average $3.94 per gallon (compared with $2.88) for 2008. Other industry sources noted that that there are also concerns about diminished domestic supply as China’s demands for diesel continue to increase.
To control packaging costs, Brown advises quick-service operators to make sure they are not buying more than they need. Specifications for existing and new products change over time and should be periodically evaluated to make sure packaging is sufficient without being excessive.
“Periodic evaluation and a willingness to make a change are also critical to ensure that operators are able to take advantage of new technologies and options that become available in the market,” Brown says.
Chlorine-bleached grades of paper are more expensive than natural grades and pre- and post-recycled materials, says Bill Fischer, vice present of sales for Antioch, Illinois-based Fischer Paper Products, a manufacturer of specialty bags. Switching from containerboard clamshells and other packaging to less expensive bags whenever possible can also save on paper costs, he says.
Instead of boxing pizza slices for take-out, a number of restaurant operators are bagging them. Pinch-bottom bags can take the place of cardboard scoops for french fries. Although bag-versus-box cost savings can vary according to various characteristics and components of the packaging as well as the complexity of the folding and/or cutting and printing requirements. Fischer has seen some direct comparisons where the price of a fry bag is $0.005 versus the $0.05 cost of a scoop and prices of pizza slice bags and boxes is $0.025 versus $0.25 respectively—“and sometimes even greater than that.”
Sandwiches, such as a multilayered burger with the works might appear to be trickier; they can easily be packaged in a waxed wrapper or polylaminated sheet before bagging. Fischer says that even though two types of packaging might be used, the combination can still be more cost-effective than a hinged paperboard box. So is the paperboard tray and bag breadstick packaging system used by one of Fischer’s pizza restaurant clients.
Instead of using virgin fibers in its paper products, SCA Tissue North America de-inks office and magazine paper waste, softens and recycles it. The recycled paper is “quite a bit less expensive than the one made with virgin fibers,” says John Riley, category director - tabletop for SCA North America Tissue. To reduce napkin consumption, the Philadelphia-based company offers the Xpressnap system that uses interfolded napkins and dispenses one napkin at a time so that customers can’t reach in a grab a handful. SCA offers a money-back guarantee that the system will reduce the number of napkins used by 25 percent.
In the future, new biopolymers and nonwood-based materials such as nontree cellulose, pulp from plant materials, bamboo, switch grass, and bagasse (sugarcane fibers that remain after the juice is extracted) might ease the demand for wood pulp and chips, says John R. Burke, president of the Foodservice Packaging Institute in Falls Church, Virginia. However, these alternatives are relatively new in the marketplace and are still generally more expensive than paper.
Manufacturers will also have to make some changes to reduce their dependence on gas and oil for energy. Burke says operators would be wise to explore renewable energy sources such as solar, wind, and hydroelectric power.
“We have a number of technologies available that would let some of those changes begin right now,” Burke says.