Pizza Box Pricing

By Daniel Thor, Bellissimo Foods

Although pizza boxes have a significant impact on your branding and business, they are a commodity item that takes away from the bottom line on each pizza sold.  Pizza boxes are a disposable; a necessary item in the transportation of your product from place to place. And when pizza box prices rise, it stings, and is hard to pass any of that cost on to your customers.  So why have pizza box prices been going up for the last 6 months?

Corrugated cardboard, the material used to make pizza boxes, has had two significant price increases in the past 6 months.  The cost of corrugated can be attributed to a couple different factors: box demand, input costs (e.g., Recycled cardboard (OCC) and energy prices), inventories and mill operating rates. The first price increase was $50/ton in October 2016 bringing the per ton corrugated prices from $580 to $630; the first price increase on corrugated in 3 ½ years.  This increase was due to the rise in e-commerce.  E-commerce has grown 430% from 2005-2015 compared to a 30% overall rise in retail.  Those online orders need boxes to ship and has increased demand.

The second increase was another $50/ton increase in February.   This increase was due to a staggering number of corrugated tons shipping to China.   On Dec 16, 2016, due to a pollution crisis, over 1200 Chinese manufacturing plants were shut down in a single day.  Corrugated cardboard manufacturers, of which there were 8 in China, were included in the shutdown.  Box manufacturers (those that turn the corrugated into pizza boxes) produce no pollution and we left up and running, but with no corrugated to actually make the boxes.  Thus, they needed to start importing corrugated from other places, one of those places being the United States.  A reduction in inventory means an increase in prices.

So what does that mean for you?  Commodity price increases have trickled down to the end cost on pizza boxes here in the US.  As a result of the two increases on corrugated tonnage there have two 10% increases in pizza box prices shortly following, one in November 2016, and one on June 2017.  While there isn’t much to be done to mitigate the price increases, we hope the explanation eases questions about where the increases were coming from, and we hope that prices will return to normal soon.  For any additional questions on pizza box pricing please ask your Delco Foods Sales Representative.

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