It’s time to assess COVID-19’s impact on the packaging industry
Now that Britain has tackled its first Corona Christmas, it’s a good moment to assess the ongoing effects of the disease on our industry. We’ll approach the task in properly Dickensian fashion, reflecting on COVID-19’s impacts on packagers Past, Present and Future.
It’s hard to believe that less than a year has elapsed since the first reports of a dangerous new virus started reaching us from Wuhan. Those months have seen changes so far-reaching as to completely overshadow events in our own backyard. But some of the themes which played out on the grand scale were identifiable in the packaging industry, too.
Britain’s official declaration of lockdown came some weeks after the country had begun an unofficial retreat to the bunkers, accompanied by panic buying and shortages. It was a hectic period, and packaging companies were soon reporting supply problems of their own… not all of them foreseeable.
A Europe-wide run on ink, key to the production of printed packets, was predictable enough. But who would have guessed we’d find ourselves running out of fibre for cardboard boxes? The shortage, which arose because local councils had curtailed refuse services and in many cases, suspended their recycling activities, was a reminder of the complex interdependence of modern economic life.
Demand issues seemed yet more involved. Packaging companies operating in the food sector experienced change at its most intense as the entire industry moved its focus from service to retail, seemingly overnight. Packagers in other sectors reported a similarly dynamic picture, but one in which the underlying trends were harder to read.
The entire economy seemed to be shifting towards servicing stay-at-homes. Who would be the winners and losers? It was too early to say.
In late May, UK-based commentators Infiniti Research published the first serious attempt at a COVID-era road map for the packaging industry. Their ground-breaking report predicted that those catering to the groceries, consumer goods, pharmaceuticals, and e-commerce sectors could “expect… to witness a steep increase” occasioned by moves towards home shopping, while those active in packaging for luxury goods and industrial B2B might be less fortunate.
Moodys reached similar conclusions in its own report a month or so later, predicting a modest 5% decrease in earnings across the sector, with food, beverage and pharmaceutical packagers “demonstrating resilience in the current environment,” but less robustness elsewhere.
Throughout our long, locked-down summer, plenty of anecdotal evidence has arrived to confirm those opinions. Padded packaging specialist Sealed Air, for instance, recently reported “a surge in demand for our retailed applications, including case ready, shrink bags and pre-packaged meals and snacks designed for home consumption.”
In packaging, as in the rest of the economy, the winners are those capable of responding in agile fashion to changing circumstance.
Indeed, some energetic providers have begun looking further ahead, applying solutions developed within the packaging sector to other industries. Notable examples are those of Aptar and Walki, both of whom have adapted hygienic wrapping technologies for PPI applications.
Bringing the future of the packaging industry into proper perspective requires careful attention to industry opinion. A handful of analysts with sector experience are prepared to go on the record with predictions. In its reports, Duo UK seems content with a re-statement of established themes of agility and responsiveness, but Raconteur’s publication goes much further, exploring the complex relationship between the emerging demands of the COVID-19 era and existing global legislation on reducing carbon and cutting pollution.
While emphasising the importance of honouring established environmental commitments, Raconteur’s team of industry insiders considers the ways that hygiene requirements may shift the consensus in favour of plastics. It’s a theme which is being echoed throughout the industry, even among the eco-conscious Germans.
“Until a few weeks ago anyone hearing the words ‘plastic packaging’ often thought of waste first,” says Mara Hancker of IK Industrievereinigung Kunststoffverpackungen, the German association for plastics packaging and films. “In exceptional situations like the current one, perspectives, perceptions and attitudes change.”
We couldn’t have said it better ourselves… and, at Paramount, we make sure we’re ahead of those changes.