America's economy has been like a boxing ring of late. Main Street is reeling from the one-two punch of soaring petroleum and natural gas prices in the form of higher gasoline and housing-related energy bills.

Wall Street has been bobbing and weaving, too. But higher petroleum and natural gas costs have pummeled businesses with a one-two-three combination punch: Not only are they paying more for energy and fuel to keep the manufacturing plants running and to deliver finished goods, but their costs also are going up because many of the goods they make either include or are encased in plastic, which is a byproduct of petroleum and natural gas.

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Bread maker Flowers Foods reduced its packaging size, saving more than 110,000 pounds of plastic a year – the equivalent of 1,445 barrels of oil.

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Newell Rubbermaid, the consumer products conglomerate, reduced the plastic content of several products such as these 18-gallon storage containers. The company also 'thin-walled' some products, which essentially slims down the item: The containers on the right take up about as much space as the on the left.

PLASTIC PROBLEMS Just like the average consumer, the rising costs of petroleum and natural gas are hitting businesses, too, by way of higher transportation and energy costs. But some businesses are being squeezed a third way because they use a lot of plastic in their operations — a byproduct of natural gas and petroleum — as the chief component of the products they sell or to encase what they make. Here are some examples of how they are responding.

Consumer products conglomerate Newell Rubbermaid, cleaning products maker Zep and baker Flowers Foods are among the heavy plastics users in Georgia being hit hard. These companies have employed a mix of strategies including raising prices, replacing the plastic they use with alternatives or reducing the amount of plastic content altogether.

Natural gas has the biggest impact on such companies because 70 percent of plastics produced in the United States are made from natural gas.

In the 12-month period ended in May, natural gas prices have risen 47 percent, and the derivatives made from it such as polyethylene and ethylene have gone up in tandem, said Thomas K. Smith, chief economist and managing director of the American Chemistry Council, the industry's chief trade group.

Put another way: As a commodity, natural gas is traded in terms of British thermal units. And every $1 increase per million of natural gas BTUs equals $2 billion in new costs, Smith said.

Comparatively, every $1 increase in the per-barrel price of oil costs the industry $660 million.

Still, the per-barrel cost of oil, which has gone up 84.8 percent in the same 12-month period, causes natural gas prices to rise, too.

"Natural gas and oil are substitutes for each other, and generally, over the long term, they correlate with each other," Smith said.

Unlike oil, which is a globally traded commodity, natural gas can't be shipped far from the source. At the same time, the industry has heavily promoted the use of natural gas in the last 15 years, resulting in a spike in domestic consumption, especially from public utilities.

"We've done a lot to promote the use of natural gas in this country, but we've done nothing to address supply," Smith said.

To deal with the increases, some companies, like Zep, an Atlanta-based maker of industrial sanitation and cleaning products, and Duluth-based AGCO, a maker of agricultural equipment such as tractors, have raised prices.

Mark R. Bachmann, Zep's chief financial officer, said the company has already increased prices twice this year, in January and June, to keep pace with market pressures. He did not give exact numbers but said the combined increase is "double-digit."

"It's been unprecedented, the rate in both the magnitude and the time period," he said.

Zep has been doubly whacked because it uses petroleum for the plastic containers that hold its cleaning solvents and for the chemicals themselves.

"As result, we are forced to pass these increases along to our customers and will continue to given what's happening with commodities today," Bachmann said.

But in a competitive marketplace, buyers will accept only so many price increases, executives say.

"To the extent that we have opportunities to raise prices to cover our costs, we're going to do that," Greg Peterson, AGCO's investor relations director, said, adding the company also is cutting some of its discounts, too. "We'll only raise prices if the market will support it."

That explains why many companies also are looking at using alternatives such as metals, wood, fabric or reducing the amount of plastic used in their products.

Newell Rubbermaid, for example, is using more additives in its products such as calcium carbonate, sold some of its units such as Little Tykes and Curver that made toys and housewares, as well as axed specific non-profitable products among its remaining business lines.

"We're taking a look at our products and redesigning them," said Ray Johnson, Newell Rubbermaid's president of global manufacturing and supply chain. The company began making changes as early as 2003 when plastics costs began their upward trend.

Many of the company's stackable storage containers, garbage cans and other products were redesigned to use less plastic.

The effort, along with other internal cost control measures, have reduced Newell Rubbermaid's plastics needs dramatically, Johnson said.

Fully 25 percent of costs associated with a given product stemmed from plastic, prior to the changes Newell Rubbermaid has enacted, Johnson said. Now, it's down to roughly 10 percent to 12 percent.

Flowers Foods, whose brands include Cobblestone Mill, Nature's Own and Bunny breads, has cut internal costs as a part of an initiative formally launched in 2006, said Mary A. Krier, a company spokeswoman. That was partly due to price increases in the cost of other commodities such as flour, which has gone up more than 100 percent since 2005. But the company raised its bread prices only about 20 percent since 2005 because it kept other costs in check, she said.

"We've really tried to focus our efficiencies over the long term," Krier said. That included reducing the amount of plastic bags by changing size of packaging for its breads.

"We've cut 110,000 pounds of plastic a year," she said, "and that's the same as saving 1,445 barrels of crude oil each year."