Why can’t the raw material suppliers find other sources and why can’t they ramp up production?

DONE: To answer this question, you need to take a more holistic view of our business environment. The economy has really taken off as we move from the pandemic to an endemic environment. Not only has e-commerce continued to grow rapidly, but general business has rebounded as well. This has led to extremely high demand for product label. While label manufacturers are facing a supply issue, the high demand has also created a capacity issue. When you put it all together, you get a perfect storm where demand is outstripping available capacity. The raw material providers just don’t have enough capacity to handle more volume. They are already running at maximum capacity on their coating lines, and increasing capacity takes time. It will take months, if not years for them to invest in and deploy new coating assets, which cost millions of dollars each. Then there is also the need for physical space to house the new equipment and additional people to run the new production lines.

Leave a Comment