Like in many other industries, pandemic has created major disruption in the packaging sector
We won’t go back to single-use plastic: the industry has much more to offer.
by Barbara Marcotulli
Coronavirus has swept across the world with devastating results. As efforts are taken to try and contain its spread, the world’s population is having to adjust to new restrictions around movement and social interaction. The effects of this is being felt everywhere including in the world of packaging. Here are some of the ways the sector is being impacted so far, and some counter-measures being taken.
Playing an essential role
It’s easy to think of packaging as being unimportant during this time, but actually it has an essential role to play. With demand for food, medicine and other essential goods at an all-time high, a lack of available packaging to pack and ship them in could cause significant interruption in the supply chain.
In some places, suppliers of print and packaging raw materials and production facilities have been declared as essential businesses as a result. Other countries are campaigning for the same recognition in order to keep goods moving.
The pressure on packaging manufacturers will only grow. With people increasingly leaving the house only for essential purchases, ie groceries or medication, understandably many are turning to ecommerce for their retail needs which requires more packaging for shipping.
A resilient sector
The global packaging sector is a vast and relatively mature market. While some segments are growing faster than others, the overall industry growth rate tends to broadly track GDP in the long run. Although the link to GDP makes packaging companies somewhat cyclical in nature, they do tend to operate in less-discretionary end-markets, such as food and pharmaceutical products. Because of this, the industry has historically been seen as having relatively defensive characteristics.
As we enter a period of heightened levels of uncertainly, investors may place greater value in businesses operating in more ‘resilient’ sectors, such as packaging. We have already seen demand for packaging materials spike in recent weeks in areas such as food packaging, and especially shelf-ready packaging for the grocery industry, driven by retailers’ need to meet rising consumer demand and to restock shelves quickly.
Virus transmission concerns
This rise in delivered goods has also brought with it concerns about inadvertent spread of COVID-19. Consumers have been worried about whether the virus can live on packaging and therefore be carried into homes via deliveries.
The consensus from experts is that the chances of this happening are slim. Although the virus has been found to be able to survive on the surface of packaging for some time (apparently 24 hours for cardboard), both the Centers for Disease Control (CDC) and World Health Organization (WHO) say there have been no confirmed cases of transmission via packaging and the chance of it happening are low.
While overall a need for goods seems to have overridden most customers’ worries, it’s an important example of how perception and misinformation can quickly cause a change in consumer behaviour. In this case, it might be for more protections build into packaging or new virus-resistent materials.
These customer concerns are already sparking innovation in packaging items for delivery. Chipotle has introduced a new packaging seal that it claims will clearly show if an item has been opened during delivery to reassure customers that their food is untouched and safe to eat. Measures like this are likely to stick around post COVID-19 as a result of increased awareness of the potential for disease transmission.
Meeting in the middle: reusable
Even in states that previously had instituted bans on single-use items such as plastic bags (temporarily lifted with new bans on their reusable counterparts), there has been a swap to disposables, thought to be more sanitary than durable products and packaging intended to be used many times, sometimes by many people.
In an evolving age of contagion, we are still only beginning to understand the perception of reusables is that they are vehicles for a virus. But reuse in and of itself isn’t the problem here; it’s the way it’s done.
“Reusable packaging is faced with proving its trustworthiness alongside disposablesin a world that is standing six feet apart in the grocery aisle”
Shift from sustainability to established materials
Sustainability has been one of packaging’s biggest trends in recent years. The coronavirus crisis has however seen a refocusing on familiar materials like cardboard, plastic and glass. A lot of this is down to scale and the need to produce a lot of packaging quickly. Most sustainable options are still in their infancy and there isn’t the infrastructure or materials to produce them at the quantities needed.
Likewise, the zero waste movement has also suffered as a result of COVID-19. For example, many coffee shops stopped accepting reusable cups because of the risk of contamination. Zero waste grocery stores also have a less favourable model right now as they require people to bring their own containers and use the same dispensers.
Meanwhile, in some places coronavirus is being used as a way to bring back in single use plastic bags rather than accept reusable ones. Even retailers like Lush, which has a high percentage of packaging free items, are being scrutinised by customers in terms of how those products are picked and delivered to them.
All of this means that the demand for packaging has swung high again after having been pushed low. However, the reasons behind the sustainability push remain which means manufacturers and designers shouldn’t abandon their efforts to improve packaging’s impact once this is over. COVID-19 is a reminder that the road to sustainability in packaging is still quite long. Essentially, we may see the principles that packaging has long served – maintaining the safety, hygiene, and integrity of goods – come to the fore during the current crisis. While this may be a temporary trend, it does mean that the current consumer demand is likely to be for more, rather than less packaging.
Brands and retailers working towards plans for circularity can gain tangible returns even (or especially) now by reaching people through continued investment in their present and future. Putting this on the backburner in a health crisis is short-sighted. With so much to fear today, the opportunity to trust is one that consumers desire, and businesses are in a position to give.
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Sources: Insider Trends, London I Greenbiz I PackagingEurope I VeryWell
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