Fans of your pre-roll and cone rolls, beware: An international shortage of cones is imminent, according to several paper and cone manufacturers and supply chain managers.
According to Allen Nguyen, CEO of Supply Chain Management Platform the main, the majority of the world’s cones, regardless of which company they stick their labels on, are assembled by hand at “less than 10” factories in Indonesia. The rest is handcrafted in India, for the most part, with only a few exceptions.
Quilling papers are generally produced in factories in Europe, India and China, the majority of which come from European countries such as Spain, France, the Czech Republic and other continental countries.
Regardless of where the cones are produced, Nguyen explained that a critical aspect of the manufacturing process—the actual construction—depends on human labour. The actual roll paper production process is ‘somewhat automated’, and there are currently no wrinkles in this corner of the supply chain. But cones require careful assembly to maintain shape and structure without creases, rips, or creases while rolling and gluing the paper. The process simply has not been able to be automated yet.
Being the COVID era, this means that in Indonesia, specifically, there have been factory closures and outages since the start of the pandemic. This resulted in a backlog in production and order fulfillment at a time when the demand for cones was increasing rapidly. Add to that a slowdown in global shipping, and grass-filling funnels are the latest casualty of the current supply chain meltdown.
Brian Gerber, co-founder and CEO, said: hember, who also owns hot supply. Gerber described Harrah as “the largest manufacturer of pre-rolled cone in the world”. He explained that over time, a person separated from the original factory and opened another one, and so on, resulting in a large number of factories making cones that are now in Indonesia.
Gerber, along with everyone else interviewed for this story, said that Indonesia remains one of the main centers of cones because labor is cheaper there. But strict union laws and past layoffs have inspired cone manufacturers to look elsewhere in recent years.
Labor is also inexpensive in India, where Hara builds its cones — Gerber says Hara production accounts for about 20 percent of the world’s supply of cones. For manufacturers, India also has the advantage of “being fundamentally open, from a COVID perspective,” Gerber said.
He added that pandemic-related shutdowns are no longer happening, particularly in factories, so while his company does not suffer from production backlogs like those that rely on Indonesian labor, it is getting around shipping delays, along with the rest of the world. Technically, Gerber said, they could handle the overflow of cone suppliers interested in switching to Indian assembly, but they would all be affected by the same shipping problems as the rest of the world.
Either way they are sliced, this will lead to a noticeable shortage of cones, which will see some brands temporarily removed from the market while things settle down. Nguyen said there are also likely to be price increases for what makes it on the shelves.
The demand for cones is at its highest
The shortage comes at a particularly difficult time for an already compressed market. “The demand for cones is infinite,” Gerber said. “Literally infinite.” Gerber says Hara is currently producing 60 million cones per month, which he hopes will increase to 100 million cones per month by January. He’s building this on the demand he’s seen from the market, which he and Nguyen commented is largely driven by a multi-country operator.
Regarding MainStem, Nguyen says that from 2019 to 2020, there was a 51 percent increase in average order volume. From 2020 to 2021, to date, there has been a 43 percent increase in average order volume over the previous year. This means that since the pandemic began, average customer order volume has risen 116 percent for MainStem wholesale shoppers, companies that either sell pre-orders or sell cones under their own brands.
Market size supports this. According to a study he did USA custom cones and headphone, a data company for the cannabis industry, from 2019 to 2020, pre-roll sales grew 59 percent – from $704 million to $1.12 billion. In 2020, finished products accounted for 10 percent of total cannabis sales, up from 9.5 percent in 2019. Full data for 2021 is not yet available, but it’s safe to say the market is growing steadily. Even if 2021 does not see further growth, what is already there is significant.
“Overall, we are seeing a two to three multiplier in manufacturing lead time in the past two months and at least three to five multiplication in shipping time by sea due to back-up in the ports,” Nguyen said. “This is from the manufacturer shipping to distributors in the US, as well as larger customers that we work directly with the manufacturers. Expect this to result in 13 to 18 weeks of product delivery.” This is all subject to change, he added, meaning that delivery times could increase as well.
Several retailers – who all sell joints, cone or both – have confirmed that they are battling delays and shortfalls in their inventory as a result of Indonesian cone production problems.
The shortage of paper and cone was a major factor in Blazy Susan growth over the past year. “Many major brands have had trouble keeping pace with demand thanks to massive increases in port congestion and freight rates,” said Will Brickell, CEO of Colorado-based Blazy Susan.
Brickell also mentioned another factor, also echoed by Gerber: the production hiccups of quilling papers in China, where some paper production has shifted over the years. Brickell said a “significant” power shortage was occurring across the country, with the result that some areas were only able to produce two days a week or less.
Gerber said rising labor costs have caused rolling stock companies to look even further. Some papers produced in China have also tested positive for heavy metals in many cases over the past decades, which has also scared manufacturers.
CEOs from space wolfAnd fogAnd Daily High Club Greenline and snail They also confirmed that they had seen stock disruptions due to the cone shortage. Nguyen, of MainStem, said he has many clients of multi-country operators who regularly place large orders, and that their supply will be affected.
Not every brand will experience shortages, per se, but even individual brands with the most solid supply chains won’t be able to make up the difference with their own inventory. Generally speaking, there will be fewer cones for sale, period.
“Our team has heard that our competitors are having problems sourcing the leaves and assembling the cones, which is causing a shortage of inventory on their end,” said Paul Marubella, president and chief marketing officer at republican brands, She said. Republic owns OCB, EZ Wider, and Job. He explained that Republic owns its entire supply chain, including paper manufacturing and brochure assembly, and therefore will not see any shortage of its brands either for papers or cones.
Nick Kovacevich, CEO of GreenlineWhich owns the quilling paper brand vibrationsThey said they are also seeing an increase in demand for paper products, including cones. He said that Vibes papers are made in France, and provided a reminder to consumers. “Keep in mind that this will only affect pre-rolled cones and not flat paper that still allows consumers to roll their own joints,” he said. “We can’t get enough cones, but we’re expanding production in two different regions to meet demand.”
I do not know how roll? It seems there has never been a better time to learn.