Rethinking Packaging in the Era of COVID-19

March 19, 2020

Ever since COVID-19 took over the news cycle, not a day has gone by without mention of consumers panic-purchasing essential goods and emptying out store shelves. People are trying to take control of a frightening and unfamiliar situation, which in turn has sent shockwaves throughout the supply chain. 
 
The question is not whether COVID-19 has implications for the packaging industry, but rather what kind of implications and to what extent.
 
Here’s what we know so far: 
 
Sustainability efforts are changing 
 
In recent years, a growing number of retailers have been implementing reusable packaging throughout their operations to address waste management issues and environmental concerns. These sustainability efforts, however, are now taking a backseat to COVID-19 in the name of public health precautions, as demonstrated by major retailers like Dunkin’ Donuts, Starbucks, McDonald’s and Tim Hortons having temporarily banned the use of reusable cups and containers. Similarly, a Packaging Europe commentary discussed signs of consumers rethinking ‘packaging-free’ consumption and aseptic single-use packs being back in vogue
 
On the public policy side, the state of Maine has voted to delay the effective date of its single-use plastic bag ban to Jan. 15, 2021. Also, supermarket leaders have reportedly urged the U.K. government to waive the £0.05 carrier bag charge as a potential measure against the spread of coronavirus, noting that shoppers risk spreading the virus by bringing their own reusable bags from home into stores. 
 
Certain substrates may be safer than others 
 
Decisions on packaging designs and which substrates to use are bound to be influenced by COVID-19. According to early, pre-print research by the National Institutes of Health and Princeton University, the novel coronavirus can last for two to three days on surfaces made of polypropylene (PP) and stainless steel and up to 24 hours on surfaces made of paperboard
 
At the same time, Wood Mackenzie speculates that China may see higher demand for flexible packaging, especially for ‘wet markets’ like seafood and meat, given that COVID-19 has put a new focus on food supply-chain safety. 
 
Corporate economics are at play 
 
While major players like DS Smith,  Sonoco, Tetra Pak, Aptar, Berry Global, Greif, Berlin Packaging and O-I Glass haven’t seen any discernable impacts on their businesses to date, Crown Holdings recently announced the repurchase of up to $250M of its common stock, citing extraordinary market conditions due to the coronavirus. 
 
Also, looking ahead, Irish stockbroker Davy Group expects Europe's packaging giants Smurfit Kappa, DS Smith and Mondi to face reduced demand. 
 
China’s manufacturing halt presents new global risks and opportunities 
 
Australian supermarket heads have warned that coronavirus could negatively affect food stock due to packaging supplies from China becoming difficult to obtain. UK supermarkets, however, are currently able to deal with such supply risks, according to a British Retail Consortium director. Whether or not a shortage comes to fruition, COVID-19 has already created unprecedented market dynamics in which anything is possible.  
 
And it’s not just food retailers riding the wave of change; cannabis companies are too. Given that factories in China have shut down or reduced capacity, cannabis companies are turning to manufacturers in the U.S., India and Mexico to source packaging for their products
 
Industry Intelligence is here to help you
 
The COVID-19 situation is in a constant state of change, sending reverberations throughout the supply chain. With Industry Intelligence’s coronavirus IMPACT report, you and your company can track how businesses around the world and across sectors are turning the crisis into new business opportunities or dealing with the fallout from this crisis.

From the grocery store patron hoping to score a loaf of bread for their family to the factory worker concerned about cuts to their work hours, countless people will be affected by the business decisions you make during this critical period. Never has there been a more urgent time to be prepared for the unexpected. As daunting as that may seem, it’s also an opportunity to make a meaningful, positive change—both for your business and for the community at large. 
 
Elyse Blye is the Packaging & Containers editor at Industry Intelligence. We invite you to take a look at our online services. Please contact us at ClientCare@IndustryIntel.com and ask us about our IMPACT report.

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