If the early days of 2022 have been any indication, paper shortages and rising distribution costs are challenges that the industry will likely face throughout year. The seeds of the current problems were sown in the years of the pandemic, when sales of print books unexpectedly rose, increasing demand while people were leaving manufacturing jobs in droves that led to labor shortages in the printing and papermaking businesses.
Those were two of the main takeaways from last week’s webinar, “The Powerful Case for U.S. Book Manufacturing in the Face of Global Supply Chain Challenges, Paper Shortages, and Rising Distribution Costs,” moderated by Chris Lyons, president and publisher of Book Business, and featuring Jim Milliot, editorial director at Publishers Weekly; Bill Rojack, v-p of Midland Paper; and Matt Baehr, executive director at Book Manufacturers’ Institute. The program was sponsored by Canon Solutions America.
After Milliot summed how book sales grew in both 2020 and 2021, Rojack opened with a sobering statement: “I’ve been doing this for 25 years and I’ve never seen a market like this before.” While the paper market has always had cycles, Rojack said this is something different. “The paper business has been consolidating for years and will continue to consolidate,” he said, adding that the pandemic expedited the process.
Noting that book paper accounts for only about 5-7% of total paper market demand (including for catalogs and magazines), Rojack said that, despite an increase in demand by book publishers, overall paper demand has dropped 50% in recent years. To compensate for that drop, many mills converted to other products where they can make money—particularly the growing demand for corrugated boxes and other packaging materials. Giving current trends, Rojack said that the paper crunch for books is likely to get worse before it gets better, and he noted that plants that have spent millions of dollars converting their factories are not going to retool back to paper even if the packaging market becomes saturated—something some experts believe could happen.
Rojack said book publishers are going to need to make some tough choices. “We’ve been spoiled,” he said. “Too many trim sizes and too many colors, and simply too many options.” He added that publishers should be in constant contact with their paper and print providers, discussing the options that remain available and shouldn’t even bring up prices. Rojack pointed to a slide that he said summed up the situation the best, which noted that the way publishers chose a sheet of paper for their books in the past may need to change. “Price and look and feel will always be important, but they need to be balanced by what works best for your paper manufactures and your print providers. If those parties are not show how represented in your initial production meetings, they need to be,” he said.
Some solutions were offered and many of them involve longer term changes rather than short term band-aids. One involves automation and streamlining the process. “Historically, the goal was print enough books to get cheapest unit cost possible; then it became trying to get as much narrow focus on just-in-time delivery and having everything there,” Baehr explained. “Now with a supply chain crunch it’s about finding the best balance.”
One solution might be print-on-demand, which solves many inventory and time issues, though retains a high cost per unit. “This situation creates an interesting dialog with publishers because it assures that there will have to be a standardization of trim sizes, paper usage, cover stocks, and more,” Baehr said.
“Since Covid, the Inkjet platform has grown like crazy,” Rojack noted. “I fully expected it and it’ll continue to grow. The future for new models is in digital printing.” This brings automation into the conversation, though it will require more of the aforementioned standardization of trim sizes, cover stock, and more. For automation to take hold, something will need to change.
Ultimately, the labor and paper shortages are not going away soon and in some cases publishers have become more proactive in bringing their printing back stateside. “They are taking responsibility for consolidation, realizing they should have done things differently and supported domestic printers better,” said Milliot.“This is more than a market cycle,” Rojack added. “It is a structural transformational sea change that happened so much faster than anybody expected because of Covid.”