How Packaging Manufacturers Are Hit By The Ban In Plastic Bags

If you shop from the super mart, there is a very likely chance that your purchases will be placed inside Paper Mart retail bags. Retail bags are a very important component of the retail industry because they help build brand awareness. It is very common for retail bags to be printed with the business name and logo for marketing purposes.

In Chicago, retailers are required to provide their customers with recyclable or reusable bags of any material or commercially compostable plastic bags. Initially, the restrictions covered only chain stores and franchises that are larger than 10,000 square feet. Small stores have another year to comply with the ban and restaurants are exempt.

In 2014, Chicago alderman passed the ban so that Chicago retailers will have a year to prepare but it looks like they were not prepared to comply with the ban. The transition was not also smooth for plastic bag manufacturers. They need to make an investment in special equipment in order to produce retail bags that will comply with Chicago ordinance.

Novolex is a large packaging manufacturer that employs more than 5,100 people in 32 factories all over the country. According its website, Novolex has yearly revenue of $1.9 billion but the company declines to comment on how much it makes in manufacturing plastic bags for retailers. However, it seems significant enough to conform by investing in new equipment.

The investment of Novolex looks like it will pay off because one of its biggest customers Jewel-Osco that has 35 stores in Chicago is replacing its airy plastic bag with a bag that is 5 times thicker and considered reusable according to the latest ordinance. Instead of turning to a rival to support its needs, Jewel-Osco decided to maintain business with Hiley Poly, the Novolex brand that manufacturers its retail bags.

Retail bag manufacturers are the ones that have to adapt, not the retailers. From the retail perspective, the only thing they need to do is train their sales staff to explain the change to their customers. Most companies are capable of producing retail bags for Chicago but the hit in their business is inevitable. They may end up producing less which means reduction in employees.

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