November 4, 2021
How Are Paper Shortages Causing Delays for Spirits Brands?

With paper joining a lengthy list of items in short supply because of pandemic-stretched supply lines, winemakers find themselves in a bind when it comes to getting their products to market.

Without paper, there are no labels, and with no labels on the bottles, there is no wine.

"There has certainly been a challenge with the supply chain, and you don't have to look too far to see that," said Travis Pollard, vice president and general manager of ASL Print FX in Napa. As a printer that specializes in label production for beverage companies like wine brands, ASL has seen the ripple effect of paper delays firsthand.

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"The three main issues are freight, labor and inflation," he said.

At a basic level, this could mean there aren't truck drivers to pull the material in from the ports. At a higher level, it could mean there is a clog or gap - depending on your perspective - somewhere else along the supply chain impacting the transport of paper.

"Not only that," said Pollard, "But there also was a fire in Texas at a refinery, and that has had an impact on the adhesives that are used in pressure-sensitive label printing. We are still feeling the ramifications of that."

"And also when the pandemic hit, a lot of people shifted from going out to eat and shopping at their local stores to ordering from Amazon, so the online retail business has boomed," he explained. "So the paper that is manufactured safe for printing has been diverted towards corrugate for the boxes for Amazon and online retailers to ship their products."

Pollard estimates they will continue to feel the effects of the shortage "well into 2022." Regardless, ASL's growth is up 57 percent over the previous year, and they now cycle between three main paper suppliers to ensure no label goes un-printed for too long.

"They have similar if not identical product lines, so we are working with them so that if they might be short on one material, the other supplier is not," he said. "If I was going to put an icon of what we're going through right now, it'd be a symbol of a juggler."

It's not just the printers and label clients feeling these implications, though. Joe Borreson of Dust Cloud Design puts together packaging and branding for various industries including wine, and also has felt the paper shortage.

Based in the Napa Valley, Borreson goes through a printer up in Seattle, as he has historically found they can meet his needs better. And while he says his situation isn't as dire as some other bigger players in the wine label world, Borreson has been recently practicing patience as his projects sit on the printer, waiting to be refilled with paper.

"I usually work with medium to small wineries and they print digitally, but with paper stock, it doesn't matter if it is digital or not - paper is paper," he said. "I had some direct slowdowns and production of paper, but I wasn't aware of it until [the printer] told me directly."

COVID-19 has caused slowdowns and shortages of many raw materials, and according to research by The Sheridan Group, the price of wood pulp has risen from $700-$750 per metric ton to almost $1,200 per metric ton in the last year alone. In addition, ink prices have also risen as additives, resins and the like have become increasingly difficult to acquire.

"There are so many factors in this COVID situation that it seems like all industries are impacted," said Borreson. "Doing graphic design, it usually takes a couple months from initial design to printing anyway to get the project done . so adding paper slowdowns is just another layer to it."

To explain how these slowdowns affect wineries - especially if they have a vintage they are itching to get out on the shelves - Pollard refers to the all-at-once nature of bottling wine.

"It's very much a just-in-time industry," he said. "The glass, the corks, the capsule and labels come into the bottling line right before the wine is bottled, and so if any one of those components is missing, it completely derails the bottling process."

As a result, ASL has had to ask their clients for a longer timeline than usual to ensure they can get their hands on all of the materials needed to finish a product they can be proud of. When they can, they also buy their raw materials as far ahead as possible to offset any potential freight and logistical issues further down the supply chain.

"We are also working with our customers to suggest alternative materials that they may have not considered in the past . and we have found that some wineries that in the past have not been so flexible are being quite flexible now," said Pollard.

"We call it value engineering - how do we keep an elevated brand and a similar look, but pare down costs?"

Pollard says this sometimes means printing more than one varietal of wine all at once to take advantage of economies of scale. For example, he says if you have a Pinot Noir and Chardonnay, they bottle at two different times of the year, you may want to print those both at the same time, even though you may not need those labels until later.

Amid the chaos though, Pollard praises the paper industry for playing with the cards they have been dealt, and said it really boils down to stellar - and frequent - communication.

"I have to give our suppliers credit for doing an outstanding job because they're probably in a more difficult situation because they have to keep more than 8,000 printers fed," he said. "That's not an easy task."


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