"Without Plastic Containers, Even Pudding Can't Be Sold"... 'Naphtha Shock' Hits Japanese Food Industry

Concerns are mounting in the Japanese food industry regarding potential disruptions in the supply of packaging materials. Due to instability in the Middle East and resulting transit issues in the Strait of Hormuz, the supply of naphtha has been shaken, making it difficult to secure raw materials used for plastic containers and packaging printing. Some companies are even considering suspending product sales or switching to "unprinted packaging."

Pudding image for article comprehension. No direct relation.

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According to the Nihon Keizai (Nikkei) newspaper and announcements from the National Federation of Lifestyle Industries and Consumer Organizations (Seidanren) on April 27, Seidanren recently conducted an emergency survey among its member companies regarding instability in the supply of naphtha. Seidanren is comprised of 712 companies and organizations, including food and beverage manufacturers, restaurant operators, and distributors.

The survey found that 44% of responding companies said they are "already being affected by the shortage of naphtha." Additionally, 31% responded that "the impact will emerge within three months." In total, 75% of companies have either already been hit or expect to be affected in the short term. Among the respondents, 77% use naphtha-derived raw materials in their containers and packaging.

There are also concerns on the ground about the potential for actual sales disruptions. According to the Nikkei, a mid-sized food manufacturer that supplies pudding to retailers nationwide is currently unable to confirm whether it will be able to stably procure plastic containers for pudding from early next month. The company stated, "If the supply of containers is cut off, we will have to suspend product sales."

Issues with packaging printing have also become a variable. As it has become more difficult to procure naphtha-based solvents, there are cases emerging where product names or ingredient lists cannot be printed directly on containers. One mid-sized beverage company has decided to stop printing on the packaging containers for 15 types of probiotic drinks starting in the latter half of next month.

Cost pressures are also increasing. Mitsubishi Chemical Group raised the price of film for food packaging by more than 20%, and ink companies such as DIC Graphics and Artience have also successively raised prices for food packaging ink and coating materials.

Although there has been discontent in the restaurant industry over the extent of price hikes, the chemical industry maintains that these increases are unavoidable due to rising costs. A representative of a company that produces basic chemical products using naphtha as a raw material told the Nikkei, "The procurement price of naphtha is about twice the usual level."

Some companies are looking for alternative materials to replace plastic containers, but there are concerns that switching in a short period is not easy. This is particularly true in the food and beverage industry, which is characterized by a large number of mid-sized companies, making it difficult to overhaul packaging facilities and production processes all at once.

In the Seidanren survey, 25% of responding companies said that if the current situation continues, it could have a significant impact on business continuity, performance, or operations. The Nikkei forecast that "after next month, there is a strong possibility that the number of discontinued products and unprinted packaged goods will increase rapidly."

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