Top 3 ways COVID-19 will impact European packaging sector
As the COVID-19 pandemic continues to disrupt most of the world economy’s supply chains, the packaging sector is expecting a significant impact as well. In order to determine how short- and long-term effects of the crisis might impact the growth of global packaging, Volpak has investigated the industry data that has been published to date. By recognizing the need to remain flexible and understanding what’s in store for us, we can be fully prepared to face and adapt to this common challenge.
The packaging sector in Europe during COVID-19
Over the past weeks, most packaging professionals in Europe — as many as 85% of those surveyed by Packaging Europe — have had to endure a “work-from-home” policy. This work-from-home policy has proven to be the greatest challenge presented by the COVID-19 crisis so far, affecting brand owners as well as packaging manufacturers, retailers, designers, salespeople, waste management businesses, and more.
Meanwhile, the majority of factory workers (87%) are implementing social distancing measures in order to keep up productivity while protecting employees. Additionally, one-fifth of the packaging professionals surveyed by Packaging Europe answered that they are shifting to rely more on automated and machine-operated processes. Around the same proportion of respondents also believe that increased investment in automation is on its way to becoming the new normal.
When it comes to the government regulations across Europe, the majority of those surveyed have reported that they believed their government was doing enough to lower the spread of the virus while keeping the economy afloat. When asked about short- and long-term challenges, more than half of respondents have said they believe it will improve e-commerce, while lowering consumer demand for disposable containers.
It’s a good start to know where we stand today as the current situation continues to develop day by day. But the real question is, what trends lie ahead?
AN ESSENTIAL MARKET
Looking back at the years following the last global financial crisis of 2008, there is a lot to be learned. Between 2008-2018, the packaging industry actually saw an increase in investment compared to other industries and vast growth in certain sectors. Already since the start of the pandemic, we have witnessed a much higher demand for packaging in food industries as consumer demands have risen, particularly shelf-ready packaging in the retail industry. While GDP and packaging manufacturing are fundamentally interlinked, the reliance of other “essential” markets such as food and pharmaceuticals on packaging underlines the resilience of our industry.
A PAUSE ON SUSTAINABILITY
Environmentally friendly packaging solutions have been a constant in packaging trends over the past decade. While COVID-19 is not likely to impact consumers’ behavior on shopping ecologically, the exponential speed of growth of this sector might be affected by the crisis. One reason is that the gastronomy and food catering industry has to decrease their use of non-disposable containers such as refillable glasses, as they might increase the risk of virus transmission.
In other words, health and safety concerns about hygiene will be prioritized over environmental sustainability as the world continues to tackle the pandemic. While this downward trend is not likely to continue after the end of the health crisis, it does indicate a new and higher consumer demand for packaging in the short-term.
E-COMMERCE ON THE RISE
With most shops and physical retail, spaces on lockdown the world over, online delivery services have never been more in demand. Even retailers who previously lacked a strong online e-Commerce infrastructure have now had to reevaluate their business model in order to survive. Since packaging is a very important prerequisite for all e-commerce trade of physical goods, there is a new value placed on packaging that guarantees defensive protection and prevents damage to the goods, while being financially effective, as well as “return-ready” packaging that improve the retailers’ chance to get a product back into their stock as efficiently as possible.
Disposable packaging for takeaway food is also in higher demand as consumers opt for more food delivery. With so many businesses investing in e-commerce as a primary revenue stream, and with so many consumers discovering the efficiency and convenience of this mode of shopping, it is likely this behavioral change will last long beyond lockdowns.
LET’S GET FLEXIBLE
While we can expect many changes from the ongoing COVID-19 crisis, both short- and long-term, being prepared always means we can find new opportunity in times of crisis. As supply chains become vulnerable to change, and the world of management and financing likely to witness large disruptions, it is more important than ever to join forces with trusted partners.
Volpak has forty years’ experience manufacturing complete packaging lines that range from medium-low to high outputs. Over the decades, the company has become known worldwide for innovating solutions that respond to the changing times. In addition to the stability and experience marking our company history, the Volpak machine portfolio is always designed to be one-step ahead of the next disruption. Email us today to find out how we can support your flexible packaging needs in a fast-changing world.