Your most significant risks in the food industry often hide in plain sight. They lurk in the systems and processes you take for granted. As you focus on urgent issues like ingredient costs and labor shortages, a crisis may be building in your plastic packaging supply chain. This is where the hero of today’s article enters the chat: your plastic food packaging forecast.
Remember that the market is unforgiving. It won’t pause when supplies tighten, prices surge, or regulations change overnight. Meanwhile, some of your competitors are shifting from guesswork to science in their forecasts. It’s a crucial transformation.
Over the past fifty years, Inline Plastics has seen market fluctuations, supply-and-demand chain trends, and a host of other factors that affect how much inventory a customer may require. We are here today to share some important tips about forecasting your packaging needs and ensuring your business never runs short of supplies – because nobody wants to be caught with their packages down!
Why Forecasting Your Plastic Food Packaging Needs Is So Important
If you order too much plastic food packaging, you may run out of storage space. If you order too little, you could be left without packaging and see potential profits drift away. It’s about finding the correct balance between what you need and what you can expect to need. A well-detailed forecast can give your business a massive competitive advantage.
Creating A Forecast for Your Business
Think of running a business like planning a (fiscal) year-long road trip. First, you sit down and make a budget. That’s like mapping out how much money you’ll need for gas, food, and hotels for the entire journey. This budget is your basic game plan, and you’ll use it to see if you’re staying on track throughout the year.
But here’s the thing: just like road conditions and gas prices can change during your trip (and the hit songs your kids need on repeat), businesses face changing conditions too.
That’s where forecasting comes in.
While your budget is like your original trip plan, forecasting is like checking the weather and traffic reports regularly and adjusting your route accordingly. You might update these forecasts every month or every few months based on what’s actually happening in the market.
Then there’s something called sales and operations planning (S&OP), which is like having regular family meetings during your road trip where everyone shares important information. The person watching the map (sales) talks to the person watching the gas gauge (operations) and the person managing the money (finance). These meetings should happen regularly (monthly) and help everyone stay on the same page about things like road closures (market changes) or new destinations (business opportunities) that might affect the journey. Which drive-thru has the best fries is also important info to share.
The main difference is that while your budget stays fixed, like your original trip plan, your forecast and S&OP process are flexible and change based on real-world conditions. This helps businesses stay realistic about what they can achieve, adapt to changes in the market, and avoid getting a proverbial flat tire.
Factors That Can Affect Your Forecast
What are the factors that influence your forecast when creating it? Here are five key areas to consider:
1. Historical Data Analysis
When creating your forecast, past performance can predict future outcomes. What were the sales patterns throughout last year for particular packaging? Look for seasonal fluctuations and cyclical patterns from the previous year. Was there a certain season in which you needed specific packaging the most? Remember: this should be an ongoing process. For next year’s forecast, use the data you’ve collected from this year and look for accuracy and deviation rates. The more you know, the more you’ll grow — and hey, if your crystal ball is broken, at least your spreadsheet can tell the future!
2. Market Trends Evaluation
When forecasting plastic packaging needs, you must consider that customer demand is shifting toward eco-friendly options, affecting sales predictions. Your forecast should consider the potential for higher costs from new environmental regulations and changing material prices. However, many customers may not be willing to pay more for sustainable packaging. Different markets will change at various speeds so you may need to develop forecasts by region or by customer type(s).
3. Economic Indicators
When planning your packaging needs, keep an eye on the economy’s health (no PhD in economics required!). Strong growth means more packaging needs, but if the economy struggles, consumers spend less, so your containers might need to go on a diet too. Watch these trends carefully to avoid a warehouse full of lonely containers taking an extended vacation.
4. Competitor Analysis
Watching your competitors’ moves is very important. While they’re likely not exactly posting their business plans on social media, you should keep an eye on them. Look at how much of the market each competitor controls and whether their share is growing since this impacts your expected sales. Pay attention to their pricing — if major competitors cut prices, you may need to adjust your own prices and production plans. Watch for new product launches, as these could quickly shift market demand. Your competitors’ marketing campaigns and promotions can temporarily boost their sales and reduce yours, affecting short-term sales. Also, consider if competitors are expanding or shrinking their operations, which signals their market expectations and could affect your sales potential.
Think of it like watching your neighbor’s renovation project. Is their new deck better than yours? It’s okay; they’ve got nothing on your BBQ skills!
5. Industry-Specific Factors
Important industry factors require careful consideration when forecasting plastic food packaging orders. Regulatory compliance and ever-evolving food safety requirements keep quality managers on their toes. Raw material costs fluctuate, largely driven by oil prices and market availability. Supply chain challenges can throw off delivery schedules — like when shipping delays or material shortages pop up unexpectedly. The job market is getting tougher, with companies competing for workers and dealing with rising wages. Environmental rules keep getting stricter, nudging everyone to use more earth-friendly packaging options. And when you think you understand the latest packaging technology, something new comes along to shake things up! It’s like trying to hit a moving target, but that’s what makes forecasting in this industry both challenging and interesting.
Facing Challenges with Your Forecast 
With changing market trends and conditions, your forecast may face challenges as the year progresses. The biggest challenge facing your forecast is probably what you expect: accuracy. Nobody can be right 100% of the time, but it’s important to at least be in the ballpark.
Global disruptions can throw off your planning — whether it’s a port strike or resin plants shutting down due to storms, accidents, or sudden business changes. Any of these events can impact your supply chain. In instances like this, you should be willing to “pivot” or update your forecast from a new angle accordingly. It doesn’t mean starting over. You can think of it as “repositioning.”
Pack to the Future: Smart Forecasting Ahead
Your forecast should be a healthy mix of data, market trends, and strategic thinking. No one can predict every packaging curveball the market might throw, but a good forecast is like a reliable GPS for your business journey. Sure, there may be some detours. But with careful planning and a willingness to pivot, you’ll keep your packaging strategy tight and your business on track. Start forecasting today before you need to package tomorrow’s products.
Looking for clarity? We’ll help you explore all your options – even ones that don’t include Inline Plastics. Let’s discuss what is best for you!
