As 2026 progresses, the packaging distribution landscape in the United States is reaching new heights. However, this situation has increased the demand for ‘resilient and transparent’ supply chains in the sector. As a result, distributors have become strategic partners instead of middlemen to manage complex SKU portfolios, optimizing razor-thin margins. Therefore, they focus on the right ERP software for packaging industry to stay competitive.
These days, several options are available in the ERP domain. Out of them, SAP S/4HANA Cloud ERP has emerged as the top priority for US-based distributors. This solution offers real-time visibility with AI-driven agility to the packaging distribution sector. This blog talks about why 2026 is crucial for the packaging distribution industry in the USA and how SAP S/4HANA reshapes the sector.
Let’s start with the current state of the industry.
The State of Packaging Distribution in the USA
As per the Mordor Intelligence report, the United States packaging market is expected to cross USD 217 billion in 2026 and is forecast to reach USD 263 billion by 2031. This shows the CAGR of over 3.9 percent because of the increasing popularity of eCommerce and a paradigm shift toward more sustainable packaging.
Distributors also see a massive transition toward circular economy models in line with state-level regulations. Moreover, the ‘Sunrise 2027’ initiative that introduces 2D barcodes compels them to upgrade their scanning and tracking capabilities. In this environment, an ERP for packaging industry can play a vital role in connecting procurement and warehouse management with customer experiences.
Here we will see some common challenges for packaging distributors.
Common Challenges Packaging Distributors Face
Growth opportunities are visible in the sector, but the road for packaging distributors has some hurdles. American distributors are battling the following primary challenges in the packaging industry-
- Labor Scarcity and Skill Gaps
- Inventory Mismatch
- Increasing Regulatory Pressure
- Volatility in Costs
- Technical Debt and Data Issues
- Precision Inventory Management
- Automated Procurement
- Financial Transparency
- Enhanced Experiences
- Reduced TCO
It is quite a struggle to find and retain skilled personnel in the warehouse and logistics sector. High turnover rates can lead to operational bottlenecks and errors in meeting deadlines. Labor scarcity also leads to order fulfillment issues.
Top brands demand more elegant and personalized packaging. It makes it difficult for packaging firms to manage thousands of variations in dimensions, materials, and eco-certifications, especially without real-time data.
California, Colorado, and Oregon have implemented strict EPR (Extended Producer Responsibility) laws. As a result, distributors in these states are responsible for reporting the material competition and end-of-life cycle of their products legally.
Raw material costs like those of paperboard, plastic resins, and aluminum keep on fluctuating. Distributors, who use manual pricing models, find it difficult to cope with their margins in such fluctuations. They may face problems in even updating their catalogs accordingly.
Many packaging distributors still rely on legacy on-premise systems. However, these systems cannot communicate with modern eCommerce platforms or carrier networks. This leads to the lack of a single source of truth, with issues in getting real-time data on billing and deliveries.
SAP S/4HANA Cloud solution can assist distributors in handling these challenges effectively.
Role of SAP S/4HANA Cloud ERP
SAP S/4HANA Cloud is an integrated enterprise resource planning (ERP) system. It runs on the SAP HANA in-memory database to process all tasks in real time. This system has SAP Business AI in 2026 to automate routine operations like invoice matching and demand forecasting. As a preferred ERP company for packaging industry, SAP offers a ‘Public Edition’ with pre-configured best practices.
SAP S/4HANA Cloud assists mid-market distributors to adopt the advanced technology with a quicker time-to-value (TTV) and reduced TCO (Total Cost of Ownership). This ERP solution is a secure ERP choice for wholesalers as well.
SAP S/4HANA Cloud ERP vs Legacy ERP
US-based packaging distributors migrate from legacy systems to S/4HANA Cloud for several reasons. Here are the key differences between on-premise legacy ERP and SAP S/4HANA Cloud (2026 Edition).
| Aspect / Characteristic | Legacy (On-Premise ERP) | SAP S/4HANA Cloud |
|---|---|---|
| Data Processing | Batch Processing | Real-time, In-memory processing |
| User Interface | Complex, menu-driven | Fiori, user-friendly, role-based |
| Updates | Manual and after 3 to 5 years | Continuous and automated updates (SaaS) |
| Analytics | Requires separate data servers | Embedded AI and Predictive Analytics |
| Sustainability | Manual spreadsheets and reporting | Integrated Sustainability Control Tower |
Smaller distributors can enter the market through SAP Business One for packaging industry. But, as their business grows and faces complexities, they should switch to S/4HANA Cloud to handle the massive data volumes.
Key Benefits for Packaging Distributors
Implementation of a modern ERP software solution for packaging industry can bring many operational benefits. Some of them are –
Embedded AI can predict demand spikes based on seasonal trends and historical data. This ensures that high-demand packaging materials are always in stock.
This solution nurtures your relationships with suppliers. It triggers purchase orders automatically when stock hits the predefined levels.
You can gain real-time visibility into your cash flow with automated accounts payable and receivable. It also reduces DSO and brings more transparency.
It assists your sales team with mobile-readiness to see real-time stock levels and custom pricing. This can save time and effort significantly while improving experiences.
An advanced ERP solution for packaging industry offers the cloud advantage to distributors. This can reduce the total cost of ownership.
It is better to consult a reputable SAP Partner to learn more about the characteristics and benefits of this robust ERP solution.
How SAP S/4HANA Cloud Supports Sustainable Packaging Operations
Sustainability is crucial in the packaging distribution sector. The SAP for packaging industry solutions have the necessary tools to maintain sustainability. These tools can help distributors maintain a digital record of every material. They can generate complex data reports for state regulators and measure the carbon impact of their operations using built-in tools. In a way, SAP S/4HANA Cloud ERP automates the process to save millions of distributors every year.
Choosing the Right Implementation Partner in the USA
SAP ERP solutions can be a game-changer for the packaging distribution sector. However, selecting the right ERP company for packaging industry is as important as the software. A US-based partner with a global presence understands the specific and general trends of supply chain and logistics. While selecting the right partner, you should consider factors like industry expertise, cloud track record, and methodology.
It is also necessary to check the overall track record and the availability of post-go-live support. The best partners use the SAP Activate methodology to deliver value in manageable phases.
Concluding Remarks
The packaging distribution sector in the USA is undergoing a significant transformation. The complexity of 2D barcoding and changing regulations with strict enforcement of sustainability laws makes things difficult for distributors. However, they can invest in SAP for packaging industry and implement the SAP S/4HANA Cloud solution. A reliable implementation partner in the USA can help them leverage the benefits of SAP solutions.
Silver Touch Technologies USA is a renowned SAP Partner. Our years of experience in implementing SAP solutions across various industry sectors can help businesses grow with automation. Contact us to learn more about our add-on development and SAP ERP implementation services.
