INCREASING PACKAGING COSTS FORCE BEDDING MAKERS INTO ALTERNATIVE BUYING PLANS.
NEW YORK-Rising petrochemical costs have hit the vinyl packaging business, forcing bedding companies to come up with alternative plans that include directly sourcing packaging from overseas suppliers or buying in extraordinarily large bulks.
"This is something that we had to face head-on," said Joe Blazar, Leggett & Platt's director of marketing for the consumer products urethane division.
Leggett & Platt, which has a strong and growing memory-foam bedding business, was buying its plastic packaging, which was made in Asia, from a U.S. distributor. The costs, however, were soaring-by almost 20 percent-and the company had to react. "We eliminated the middleman and just got it directly, we have had to source the majority of the packaging ourselves," said Blazar, who turned to the company's Global Services division for help.
By directly sourcing most of its basic bedding packaging, Leggett & Platt didn't save money, but was able to keep its costs neutral. "It was what we had to do, otherwise there would be cost increases that would eventually affect retail costs," Blazar said.
"Packaging cost increases is something we don't have a lot of control over," said Bob Hickman, vice president sales and marketing at United Feather & Down. "It's something that we are dealing with, along with the cost increases for raw materials used in our products."
To help combat costs, United Feather has been trying to better plan its long-term purchases and to buy in bulk. "That gives us more leverage and also allows us to better negotiate with our suppliers," Hickman said.
Hickman, however, believes that if the cost increases are passed down to consumers, it will not affect the sale of United Feather products at retail. "These are high-ticket items and an extra dollar will not steer away our customer away," he said.
Changes in packaging design are "topics on the agenda," said Caroline Van Hoff, creative director of Philips Design. She said limiting the size of the packaging and thickness must be weighed against other considerations. For example, performing well in a drop test. "The packaging still has to protect the product," she said.
Poor packaging that doesn't help to tell a product's story can have an ill effect, said Ruth Tulino, president of Tulino Design, a packaging firm. "The packaging is what draws a customer in and gives light to a product and its qualities," Tulino said.
Hickman agreed and said, "For us, it's more important today to maintain the integrity and appearance and quality of our packaging than ever before. We don't want to compromise our packaging, because we understand how important it is and how it aids in the sale of our products."
Alternative or less packaging are issues that many suppliers and designers are looking into.
Leggett & Platt has been working on packaging that doesn't rely on petrochemicals, but still works to protect and showcase the product. Blazar declined to provide details of the new materials being used, but said the plan was to showcase the new packaging at the August textiles market.
But not everyone has been feeling the packaging pinch.
Fritz Kruger, senior vice president of marketing of Pacific Coast Feather, said his company wasn't experiencing price increases at this time. "There was a push back in the late fall of 2005 that correlated to the increases in oil at that time," Kruger said. "We may not be as affected by small or short-term price fluctuations as we have diversified sourcing for vinyl bags."
Caption(s): Rising packaging costs have forced some suppliers to buy in large quantities.
|Printer friendly Cite/link Email Feedback|
|Comment:||INCREASING PACKAGING COSTS FORCE BEDDING MAKERS INTO ALTERNATIVE BUYING PLANS.|
|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Date:||Jun 26, 2006|
|Previous Article:||DIAN AUSTIN COUTURE HOME SET FOR HIGH-END DEBUT.|
|Next Article:||WHAT'S OLD IS NEW AGAIN; RECLAIMED WOOD AND CUSTOM LOOKS ARE BECOMING POPULAR CHOICES IN HARD FLOORING.|