Glass Bottle Supply Chain Disrupted
Your favourite adult beverage goes through a convoluted process of cultivation, harvesting, fermenting, brewing, distilling, manufacturing, shipping, labeling, shipping, bottling, shipping, unloading, retailing, etc., before ultimately being poured in your glass. These processes all rely on the supply chain.
Beer, wine, and liquor consumption up
Beer, wine, and liquor consumption peaks during the festive season from American Thanksgiving to New Year’s Eve, with increases of up to 159% in total consumer spending in normal years.
Overall Consumer Demand Rising
The new normal of Covid lockdown policies and shelter at home directives saw more leisure time and restrictions on regular activities, leading to an increase in alcohol consumption to fill the void.
Columbia University research found alcohol sales climbed 20% above normal rates between March and September 2020.
*A survey of drinking habits from the same time found that respondents were drinking about 14% more than they had been pre-pandemic, according to research by the RAND Corporation.
The shift to increased home consumption has lead to increased demand for glass containers as winemakers, distillers, breweries, and others rely on the durability and environmentally friendly qualities of glass for their product packaging.
At the same time increase in demand has come with corresponding challenges in supply for many of the same reasons.
Supply Chain Challenges
As glass bottle supplies become more scarce, bottlers struggle to fulfill the increased demand. Labor shortages and international freight delays have contributed to supply chain disruptions for glass suppliers.
They are also facing higher costs for fuel and transportation. The result is reduced availability, longer shipping times, and higher prices down the line.
Labor shortages in the supply Chain
Shortages of dock workers, longshoremen and truckers at ports have caused the flow of goods to backup.
Overseas manufacturing delays
Delays in clearing the ports have left shops and distributors that rely on foreign shipments without stock leading to disruptions to local bottling, labeling and vineyard businesses.
Shortages of manufacturing components
It’s not only the supply of bottles that has been affected.
Paper label makers are also scrambling as paper supplies become scarcer at the same time as demand increases. The problem is exacerbated by increased demand for paper packaging from online retailers who are seeing a surge in online sales. Paper labels must be affixed to bottles with adhesives which are also – you guessed it – experiencing the same shortages and shipping delays.
Bottle shortages have resulted in bottlers substituting bottles usually used for one varietal as containers for different varietal altogether.
We have seen as much as threefold increases in the cost of shipping or more over the duration of the pandemic.
Listen to a radio interview on CBC Daybreak South with Chris Walker where Steve Pelkey, CEO of Universal Packaging, explains global glass supply issues, and how and why they are impacting our customers. It’s an excellent and concise listen.CBC Listen radio interview with Chris Walker and Steve Pelkey
Overcoming supply chain disruptions
Increasing Port Capacity
The port of Los Angeles handles 40% of all shipping containers entering the U.S. President Joe Biden announced the port will expand it’s operations to 24 hours a day, seven days a week, to help speed the delivery of goods.
Increasing domestic production capacity
Over the last few decades global free trade agreements have led to manufacturers moving offshore and a dearth of domestic production capacity in North America. The North American bottle industry has come to rely primarily on imported glass from China but under the current conditions companies that depend on imported glass are experiencing bottle shipping delays of up to a year.
Glass bottle supply challenges could be ameliorated by lessening reliance on offshore manufacturers. Glass manufactured in North America is more attractive to the North American retail market due to lower shipping costs. Unfortunately Owens-Illinois and Ardagh Group are the only two major glass makers in the United States.
There has been little motivation to develop additional glass facilities for an industry that hasn’t changed much over the last 30 years due to a complex regulatory approval process and financial barriers to bringing new plants online.
How your glass supplier helps
Diversified glass sources
Universal Packaging enjoys direct relationships with glass sources from glass plants globally in China, SE Asia, S. America, the middle east, Europe, India, & Japan.
We are flexible through our partnerships with multiple distributors for not just ACL screen printing supplies but suppliers of glass.
Expert experienced Glass Packaging Specialists
We are fortunate to have assembled a core group of experienced staff enabling us to execute where others might be experiencing challenges. We also continue to invest in automation to mitigate the potential effects of labor shortages.
How long will supply chain disruptions last?
So when will this unprecedented state of affairs be behind us? No one can say for sure but experts have forecasted it could continue until later in 2022 or even into 2023. It is anyone’s guess if we can rely on their predictions, but meanwhile we will continue to look for ways to keep everyone’s glasses full.
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