Paper prices have gone up around 20 percent, in some cases more, and additional hikes are likely on the way—30 percent by the end of the year, by some estimates. It’s more important now than ever to consider less expensive grades, but it’s not as simple as picking one off the shelf, since the most popular grades are largely on allocation. Also, compromising too much on quality is risky in a time when the economy is strained and competition is fierce. To mitigate cost, publishers need to take a critical look at their priorities and options and compromise accordingly.
Every paper decision comes with a trade-off, whether it’s in cost, quality or availability. Peter Wilson, vice president, paper procurement and supply chain at Quebecor World, suggests running the needs of each stakeholder—reader, advertiser, editorial, production and so on—through a forced ranking process and finding a compromise. “The compromises do not necessarily make them poor decisions,” he says, noting that the essence of a good paper decision is to “minimize cost, maintain or improve revenue, and profit from the difference.”
With quality, Dedra Smith, president of Printmark West, says, “The choice is to sacrifice the amount your readers and advertisers will tolerate.”
One b-to-b publisher says, “Paper quality is about the last thing we think about.” But for Biagio Lubrano, quality control manager at Conde Nast, opacity and brightness are key, which limits grade and basis weight options. To mitigate the lack of choices, Lubrano says the company uses stochastic printing, a method that employs frequency modulation screening instead of small screening to improve color trapping. Most of the company’s magazines are now on 38 lb. to 40 lb. coated groundwood #5, with the New Yorker on 36 lb.
Assess Your Options
Continued mill closures and paper company consolidations have shortened an already tight list of paper options. NewPage recently discontinued five paper brands following its acquisition of Stora Enso North America. The most popular brands, from any company, are increasingly hard to get.
“If it’s lightweight and cheap, it’s probably on allotment,” says Bryant Wilson, national accounts manager at paper company Frank Parsons America.
Coated groundwood papers #4 and #5, the common alternatives to more expensive coated freesheet, will see capacity closures of 14 percent for 2007 and 2008, according to forest products information provider RISI. Prices for these grades have gone up $9/cwt in the six months leading up to February and will go up another $3/cwt in April, according to Jeff Bruce, managing director of publishing papers at xpedx, a division of International Paper.
Down from these grades, selling at 10 to 12 percent less than coated groundwood #5, according to Bruce, are Supercalendared grades—SCA, SCA+, and SCA++—which, luckily, are “much improved” and which “printers are better able to run” in recent years, Bruce says, making them a likely alternative for magazines like US Weekly, New York Times Magazine and Woman’s World, according to Austin MacDonald, account manager at paper merchant Lindenmeyr Central, who says they’ve risen in brightness and surface quality and are now available in lower basis weights.
But even SCA grades are strained, says Ernie Wohlfarth, director of magazine paper at Time Inc. Switching papers right now is tough, he says, because options are limited. It’s important to do research up front and make careful decisions because getting your old paper back is not easy afterwards.
Wohlfarth also suggests sticking to U.S.-manufactured paper and working with an established manufacturer who is not likely to disappear, taking your allotment with it.
The fact that a paper may be on allocation is not a reason to ignore it completely. “Plan long term and get the ball rolling,” says Wilson of Frank Parsons. “If you’re on a #3 and you want to go to a #4, express that to someone—your printer, your distributor, the paper mill—so they can facilitate that in the future.”
Reducing trim size is another possibility. “We reduced our width by 5/8 inches—from nine inches to 8-3/8 inches—and thereby saved approximately seven percent on paper usage,” says Fran Fox, production director at Dwell, which launched a redesign in February. “We saved an additional one percent when we switched from an offshore 50.7# text stock to a domestic 50# stock.”
Hi-bulk papers, which maintain the feel of heavier grades at lower basis weights, are another option. But Wilson of Quebecor World is leery of these, saying they tend to reduce the final printed gloss and uniformity of ink. They’ve also been more difficult to source, he says.
Wilson also suggests doing a “thorough scrub of the total cost of ownership” through each possible channel—direct, broker/merchant, and printer.
While companies like Time Inc. and Conde Nast mostly source their own paper, smaller publishers usually rely on printers. For some, this model is disconcerting.
“We believe the printer marks up the price substantially,” says Robert Siel, production director at Sumner Communications. “So far, our strategy has been simply to pressure the printer to provide the best quality product for the lowest price.” His company is looking into buying its own paper but isn’t sure it can beat the printer’s rates.
Also, “If we buy the paper ourselves, someone—probably me—will have to invest a lot of time calculating, purchasing and scheduling the paper supply from the mills to the print facilities,” says Siel. “This means I may need another headcount.”
Go Green: Save Money
The environmental and marketing benefits of “going green” are obvious, but many publishers are starting to realize that going green can have benefits for their budgets too.
Kristine Kern, general manager of Mansueto Ventures, told Folio: that Inc. and Fast Company actually spent less money on paper last fall when they switched to a 100-percent recycled grade made by German paper company Leipa.
When Every Day with Rachael Ray switched to 85-percent recycled paper, the quality and hard costs of production stayed about the same but gave its image a “huge boon” among existing and prospective readers.
Groundwood papers use 2.2 tons less wood than the more expensive freesheet grades, according to Frank Locantore, director of the Magazine Paper Project for Co-Op America.
Bryant Wilson, national accounts manager at paper company Frank Parsons, says “readers will be much more forgiving if the quality is slightly off” if you switch to a lower-grade paper with FSC, SFI or PEFC certifications.
That theory can also apply to basis weights and trim sizes—when Dwell reduced its trim size, it saved about seven percent in paper usage as well as 950 trees per issue, a great statistic to share with readers.