Likely the answer is a bit of all of the above. Taking the road less traveled by pits peers is plastics closure and packaging processor Portola Packaging Inc., which today (May12) sent out a release announcing it is raising the prices for its closures. How does your company handle its price increases? And regardless of how YOU handle them: have you had success pushing them through to customers?
For Portola (Naperville, IL), the increases, effective June 1, 2011, are credited to non-resin cost inflation. In remarks on the price hike, Kevin Kwilinski, president and CEO at Portola, said, "Portola Packaging has worked diligently to improve its productivity and drive as much cost as possible out of its manufacturing operations. We have been able to accomplish this while still maintaining a high level of product quality. Although we have managed to absorb non-resin cost inflation over the past three years, continuously increasing expense pressures have made it necessary to pass along a portion of these costs to our customers."
The price increase applies to North American customers and has been prompted by 10 to 20% increases in non-resin costs such as energy, packaging and additives over the past three years since its last non-resin price increase was implemented, says the processor. The price increase percentage will vary by specific closure size and type.
Kwilinski added that the company has "invested millions of dollars" over the last three years in low-cost technologies that have allowed his company to combat inflation with double-digit improvements in efficiencies. (Ed. Note: We've reported on some of these, including the company's recent development of a new type of liner-free compression molded plastic closures for aseptic beverage packages.)
So, what is keeping you from announcing your own price increases?