March 2006 - The past year, 2005, will likely go down in paper history as the most significant year of change ever! With the International Paper announcement of a new standard in brightness and the subsequent changes to 92 bright for all domestic mills, we have now entered a new generation of paper making that will forever improve the quality and perceived value of commodity paper.

The real question in the distribution community is….’What does this mean to our business?’ Brightness improvement actually has an initial negative impact on margins. By moving the base sheet to 92 bright, it has forever improved the quality of the most economical copier paper. This generally reduces the ability of distributors to ‘up-sell’ higher bright copier papers. It also reduces the gap in brightness between the lowest priced and highest priced Laser, Ink Jet and Color Copier sheets. We can also look for a short period of ‘dumping’ of the old brightness to clear out inventories.

Account Managers across the country will now be faced with the challenge of selling surface treatments over brightness. No longer can we simply point to the obvious differential in brightness as a good reason to buy a more expensive sheet.

How is brightness being changed?

Brightness (light reflection) is being displaced by ‘whiteness’ or shade as the standard of quality in the eyes of the consumer. Bluing agents have been introduced at an increasing rate by the domestic mills to give the optical impression that a sheet is ‘whiter’. This is accomplished by adding fluorescents to pulp to change the sheet from a ‘yellowish’ hue to a more ‘blueish’ shade. This change further gives the standard copier paper a perceived greater value.

Brightness is also increasing on many of the premium sheets. Many technology grades have moved from a  92 brightness up to a 96. While this visual change is less obvious than the 84 to 92 shift, it does speak to the issue of a decreasing number of variations needed to fulfill a customers needs. The overall range of brightness in all office papers is now only 6-7 points of brightness which can be perceptually changed with bluing agents.

The impact on the paper industry

How the brightness change will affect imports

Imports have also been impacted by the brightness shift. Now that the differential between domestic and off shore product has narrowed, more and more imports are looking at the U.S. as a less desirable destination for their product. Mondi has announced they will no longer ship to the U.S. on commodity and others are also seeing a less compelling financial story in the U.S.

What it means to you

Overall, the end user benefits from a brighter sheet of paper. Distributors can carry fewer SKU’s and mills will eventually see a more profitable industry. As the industry tightens in capacity, the strong focused mills will survive. Be sure to keep your company aligned with a market leader!