The virus has arrived and not very much is what it should be. Uncertainty and close to standstill are for many the situation and the long-term consequences are hard to fathom. Likely short-term results appear to be a severe downturn in the overall economy with double digit declines of GDP’s and a sharp increase of unemployment. Some of the hardest hit industries, so far, seem to be the hotel/restaurant industry, the travel/event industries and retail.
When it comes to retail this is not a general decline, the grocery retailing is in a much better position than other in that industry. Right now, people are obviously staying put, cooking and eating at home and are using the internet for socializing. Going out is rarely an option and food and beverages are bought from stores rather than restaurants. Also, pharmacies are open for business selling medicines as well as personal care products.
Where is this possibly going then?
On the consumer side the pandemic is speeding up adoption of trending behaviors like remote working but also online grocery shopping. And in the retail industry the situation is possibly increasing demand for retail technologies. The effects of this pandemic for the retail industry could include an increased e-commerce business and cashier free self-checkouts and more.
And for food packaging?
Demand for food packaging as such will be up as people are cooking and eating more at home. Now when many restaurants and food-service outlets are closed this is obvious, but as the crisis creates new behavior patterns some of them will stay, like cooking. Also after the euphoria when things get a bit more normal. There might also be increased interest for stockpiling of essentials. A new normal can very well be to have more than a few days of preserved food in the larder. This also goes for personal care and healthcare products.
Grocery e-commerce has so far been developing at very different paces in Europe. The UK is still in the lead according to an article in Forbes, followed by the Czech Rep. and Estonia. As a result of the virus pandemic the habit of ordering online and receiving, or picking up, your shopping is fast developing and will get a boost from the extreme situation we now are experiencing. This is a clear, and unpredicted, step in consumer acceptance and adoption of the channel. A habit that most likely will stay also when we are back to a more normal world. This needs to be supported by new and better packaging solutions. This is a field where there still is room but new and creative packaging solutions are developed and innovative delivery methods are introduced.
I don’t think that sustainability will go away because of the shifted focus. The consumer demand is too strong, and the concept of sustainable packaging solutions has gotten so ingrained in product and company positioning. Demand might temporary go down but if so, it will surely rapidly bounce back. It could however mean a changed view on initiatives such as not using one-way cups, introduced at certain coffee chains. People are also probably less interested in the packaging-free shops where you fill loose product in a bag of your own.
Sustainability is also related to the expected increase in general focus on health and demand for food hygiene. Packaging might even become appreciated by the consumers. It is visibly protecting and guaranteeing the freshness of the product. This could also be supporting the introduction of track and trace systems to a broader use. Blockchain technology is available, among other solutions, and is implemented as a useful tool in the distribution chain. This crisis could be a catalyst for increased use of technology for tracking and to verify product origin and what it has experienced before consumption. An increased cost for this service is hard to get around and can, in particular now, be a disadvantage.
It will take a while for the world to get back on track and increased unemployment and uncertain employments will make the average consumer more price sensitive than usual. As a result comes as a shift towards consumers demanding more value-products and private labels will have a field day if they play the cards right. Converters and others in the packaging industry will not be spared the general requirements for lower prices.
The future is right now not bright, but it is not a dark abyss either. We will have to adopt and be as agile as we can to survive and succeed also in the new tomorrow.