Our research enabled our client to adapt its global sourcing strategy by identifying emerging supply chain vulnerabilities, tariff-driven shifts, and alternative production hubs for institutional packaging materials.
Client Context
Our client sought to assess risks and opportunities within its North American sourcing strategy for institutional packaging products, particularly in light of geopolitical shifts, rising tariffs, and evolving cost structures across Asia. With legacy supply chains in China under pressure and new uncertainty surrounding Southeast Asia, the client required a forward-looking understanding of how to operationalize a China+1 approach while maintaining competitiveness, compliance, and supply continuity.
Our Approach
The study was structured around three core investigative streams:
Market Mapping and Trade Flow Analysis: We conducted detailed analysis of import trends across the United States and Canada, triangulating between HS code data, secondary sources, and 11 expert interviews across five countries. This provided a directional understanding of institutional packaging import volumes, sourcing exposure, and importer behavior under tariff pressure.
Voice of Supplier and Buyer Analysis: We interviewed market participants in China, Vietnam, Malaysia, the U.S., and Canada to assess on-the-ground dynamics shaping production decisions, margin pressures, buyer relationships, and tariff responses. These interviews revealed the behavioral and strategic shifts taking place on both the supplier and buyer sides of the equation.
Country-Level Competitive Benchmarking: We benchmarked the competitive positioning of key sourcing markets—including China, Vietnam, Malaysia, and emerging alternatives like Indonesia—based on cost structures, production capacity, trade accessibility, and long-term strategic posture toward institutional-grade exports.
Impact
Our research delivered a clear view into how tariff regimes and shifting commercial incentives are reconfiguring the North American supply chain for institutional packaging materials. We revealed that:
- China, while still the largest exporter by volume, is ceding ground due to tariffs exceeding 170 percent. Many Chinese suppliers have scaled back U.S.-focused production lines or pivoted toward the EU.
- Vietnam has taken the lead as the most viable alternative, with strong infrastructure, cost advantages, and existing supplier relationships—but is now facing its own tariff threats, creating sourcing hesitation.
- Malaysian and Indonesian suppliers are diverging: Malaysia is deprioritizing the category in favor of higher-margin films, while Indonesia is emerging as a credible next-wave sourcing hub despite lower current volumes.
- Canadian buyers are insulating themselves from global volatility by leaning into domestic supply, especially for spec-driven or compostable products.
Our findings empowered the client to recalibrate its sourcing playbook, differentiating between tariff-vulnerable categories and viable tactical imports. The study laid the foundation for a dual-path strategy: reinforcing the client's domestic production position while identifying sustainable, lower-risk import partnerships in Southeast Asia. With a clearer understanding of the shifting supply landscape, the client is now positioned to make informed decisions that align with both cost objectives and long-term supply chain resilience.
