January 25, 2021
Dear Valued Customer:
While the New Year has arrived, a return to normal market conditions has not. Covid-19 has brought about a significant change in consumer buying behavior which has dramatically shifted historic supply and demand patterns for all of us who participate in the packaged goods supply chain. The effects of these changes have substantially impacted the availability of both production capacity as well as raw material supply. Further complicating global packaging supply is a record number of force majeure announcements from resin producers due to hurricanes, fires, and other mechanical breakdowns as they have tried to rapidly increase outputs to meet higher demand from packaging, automotive, and other strong market segments. Finally, all of us continue to deal with safely and effectively managing our workforce at a time when positive Covid-19 cases continue to climb nationally and globally.
Raw material supply is being driven globally to find materials suitable to produce the products we supply. In many cases we have little to no notice of supplier changes and our customers are working with us efficiently where qualifications are needed for flexibility and supply continuity. We have incurred significant additional cost, including freight and many not reported in the normal index publications, in our efforts to maintain supply continuity.
All of these changes are testing many of the historic supply chain models all of us have used to operate and we are seeing the strength of our customer partnerships grow as we work together to find solutions to meet the unprecedented demand and respond to raw material inflation and shortages. WB Bottle continues to monitor our purchasing decisions daily and have added an additional offsite warehouse space to allow us to purchase more aggressively. We are continually looking for new sources and options to keep the supply chain moving as smoothly as possible, but the unprecedented increase in manufacturing lead times makes this increasingly difficult for all involved.
We are already seeing significant price increases at the retail store shelf and none of us are immune to the inflationary costs and the requirements for expansion capital. More than ever, our partnerships will be critical to navigate these changes. From resin and labor availability and supply, to inflationary pressure, to increasing freight costs, our agility together can pave a path for even greater success.
We thank you for your continued business and trust in WB Bottle. Your Sales Representative will continue to work closely with you as we navigate this unprecedented situation.