Opinion ID: 4542383
Heading Depth: 2
Heading Rank: 1

Heading: Susceptor and Paperboard Packaging

Text: Both Inline and Graphic produce susceptor packaging. Susceptor packaging is a specialized food packaging that converts microwave energy into high temperatures, which heat, crisp, and brown frozen foods. Graphic, unlike Inline, also manufactures paperboard and carton packaging such as cereal boxes and soft drink cartons. Additionally, consumer-packaged-goods (CPG) companies such as Nestlé, Conagra, Heinz, Schwan’s, and Pinnacle represent the dominant purchasers of susceptor and paperboard packaging and constitute some of Inline’s and Graphic’s customers. Graphic also negotiates “multi-year, multi-product supply agreements” with all the CPG purchasers except for Nestlé. Appellee’s Br. at 12. Typical agreements cover both susceptor and paperboard products, last for one to four years, and include financial incentives and discounts such as “price caps, annual price reductions, volume-based discounts, and signing bonuses.” Id. Such supply agreements “are common in the industry.” Inline Packaging, LLC v. Graphic Packaging Int’l, LLC, 351 F. Supp. 3d 1187, 1195 (D. Minn. 2018). In July 2015, when this lawsuit was filed, Graphic held nearly 95 percent of the susceptor-packaging market in the United States, and Inline held approximately 4.6 percent. Meanwhile, the paperboard-packaging market was less concentrated and intensely competitive. Graphic’s paperboard competitor, WestRock, reported revenue of $15.5 billion in 2015, “which more than tripled Graphic’s revenue of $4.3 billion 1 The Honorable Ann D. Montgomery, United States District Judge for the District of Minnesota. -2- for that year.” Id. at 1194. Other competitors include “International Paper, Burd & Fletcher, and other regional and private label competitors.” Id. “Competition between Graphic, WestRock, and International Paper is intensified because these three firms are vertically integrated with paper mills.” Id. “[T]hese firms . . . must compete for large paperboard orders that will enable them to operate” near or at full capacity while also offering lower prices. Id. at 1195. Savvy buyers take advantage of their purchasing options and stimulate vigorous competition in the paperboard packaging market.