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17 Jun 2020

Life in the time of corona

The global coronavirus pandemic has caused a dramatic and very sudden shift in the way we live. With lockdowns imposed in many countries, consumer behaviour has had to change dramatically – and with very little warning.

Restaurants and cafés are closed, meaning that people are now consuming all their meals and drinks at home. Combined with the fact that supermarkets are some of the very few retail businesses still open, there has been a significant uptick in demand for groceries and other household goods. All these goods need to be packaged, of course, and these sudden changes have created both challenges and opportunities for the flexible packaging industry in particular.

Growth on top of growth

Even prior to the coronavirus, flexible packaging had been enjoying an increase in popularity, thanks to its perceived advantages: less use of material (and therefore a reduction in environmental impact), more efficient use of space (leading to reduced transport and storage costs) and  shorter lead times.

From panic buying to practicality

As the severity of the pandemic became apparent, the initial consumer reaction in many countries was a wave of panic buying. Some of this seemed illogical (such as #toiletpapergate in Australia), but much of it focused on long-life products such as dry, tined and frozen goods. Personal care and household cleaning products were also much in demand.

As the “new normal” of working from home and social distancing has become established,  this initial wave of excess shopping has subsided, but we are now seeing a period of sustained demand for groceries as consumers no longer have many options to eat out.

Many of the in-demand products are of course supplied in flexible packaging, and this has resulted in much greater demand being placed on all links in the supply chain.

The impact of the coronavirus

Food packaging is regarded as an essential service, so companies have been able to continue operations. Costs have increased, however, due to the need to implement social distancing measures.

Raw material costs have fallen substantially (the decline in all forms of transport has led to a glut of crude oil and record low prices). This has a bearing on the sustainability debate – with the coronavirus dominating the headlines, last year’s focus on ocean plastics has largely evaporated. Virgin plastic is now extremely attractive from a cost standpoint.

While the ability of the coronavirus to survive on surfaces such as plastic is not yet fully understood, there is certainly a case to be made for selling products such as fresh meat and seafood in plastic packaging to prevent cross-contamination and the transmission of pathogens.

An ongoing opportunity?

It’s hard to predict whether the recent changes in consumer behaviour represent a knee-jerk response or the start of longer-term trends. Much will depend on how quickly the virus can be brought under control.

What does seem likely is that for much of the rest of 2020, demand for flexible, food-safe packaging will remain high. Packaging companies have an opportunity to demonstrate the inherent advantages of flexible packaging across all FMCG sectors and establish and reinforce consumer preferences that could endure beyond the current health crisis.

Through demonstrations of the cost, quality and turnaround times of flexible packaging, customers can be persuaded that this is the packaging solution of the future. Even in a post-COVID-19 world, it’s likely that there will be a lingering reluctance on the part of consumers to enter “risky” environments. Social distancing measures and other precautions will likely push up the cost of eating out even when restaurants do reopen. Eating in – using ingredients in flexible packaging from click and collect retailers – will remain popular for some time yet.