Insights by AUSPACK

Packaging Changes Expected After COVID-19

Posted on July 22nd, 2020 in Insights by AUSPACK

Like most industries, packaging and processing has been significantly affected by the coronavirus pandemic, but not always in negative ways. With more people relying on home deliveries than ever before, retailers and packaging manufacturers have had to keep up with changing restrictions and consumer preferences while dealing with their own business disruptions.

As the world looks ahead to the new normal after COVID-19, it’s already clear that some habits and trends that formed during the pandemic will be here for the long term. Packaging firms will have to continue adapting to make sure their packaging complies with new laws and satisfies customers’ high expectations.

Sentiments towards packaging

The value of packaging for protecting goods, consumers and businesses has been recognised during the pandemic, and immediate health concerns have overtaken previous criticisms over sustainability and waste – seen most notably with the increase of single-use packaging.

With many consumers experiencing the high standard of packaging from market leaders during the pandemic, small and local businesses will be pressured to offer a competitive standard of packaging to meet their customers’ raised expectations.

Packaging sectors

As customers cut back on spending during the crisis, demand levels have drastically shifted across the sectors.

According to separate research by Moody’s and Infiniti Research published in May and June, groceries, pharmaceuticals and ecommerce packaging were the most resilient sectors that saw increased demand over the preceding months, while luxury and industrial packaging were among those worst affected.

The speed of recovery for sectors after the pandemic is expected to be relative to the level of disruption they endured. Ongoing financial concerns will likely see consumers continuing to prioritise essentials over luxuries, particularly in areas such as travel and hospitality. Packaging companies involved in these sectors should ensure that their operations are flexible when following consumer demand.

Price sensitivity

Uncertainties over employment and the economic recession are expected to see purchases remaining soft and consumers prioritising offers and value brands after COVID-19. Retailers and packaging firms will be competing on cost, so they need to explore all opportunities to reduce overheads.

Greater regional focus

With some international routes taking longer to reopen than others and many consumers reducing their reliance on imports, many packaging suppliers are shifting their operations from global and multi-region models towards more local networks. This lessens reliance on long-distance transport and raw material imports and helps businesses and consumers to meet their sustainability targets.

Ecommerce

The explosive growth of ecommerce during COVID-19 is expected to have a lasting impact on how people shop, now that home deliveries have become part of everyday life for more people.

Consumer engagement with online shopping platforms is expected to remain strong or even accelerate after the crisis, so companies that introduced ecommerce systems for the first time will benefit from integrating these more fully into their operations.

Health and hygiene

Consumer anxieties about the hygiene of shipments have already lessened over the course of the pandemic as health authorities have confirmed that it’s safe to receive packages even from areas where COVID-19 is present.

While this will be less of a concern once coronavirus is reduced in populations, consumers will expect to see the hygiene standards they’ve become used to being maintained for the long term, especially in critical areas such as food packaging.

Sustainable materials

Environmental concerns over plastic packaging have taken a backseat during the pandemic, when single-use plastic was heavily favoured for its hygiene benefits, but these issues will remain important for many consumers.

Packaging manufacturers need to stay informed about relevant regulatory changes that could limit the use of certain materials and new developments in sustainable alternatives that offer comparable levels of protection and hygiene to plastics.

Reducing waste

The increase in packaging use during the pandemic has also made consumers more aware of the waste involved in food and ecommerce shipments, which it has become their responsibility to dispose of rather than the store’s.

As consumers increasingly favour brands for their sustainability credentials, retailers and manufacturers should explore ways to minimise waste, such as sustainable design and packaging recovery and reuse.

Packaging design

The shift to ecommerce is impacting on packaging design. Minimalist designs with clear labelling help to give packaging a similar impact when viewed in person at the store or as a small thumbnail image on a phone screen.

Retailers also need to provide all the information consumers need about ingredients and nutrition (for food packaging) or other relevant information. As packaging design becomes more streamlined, this information may be included alongside the product on websites or in the form of QR codes and other smart packaging technology that can be read using a smartphone.

Smart packaging also helps with order picking as companies increasingly adopt automation to process orders more efficiently and scale their operations in line with consumer demands, helping businesses to stay adaptive in these uncertain times.

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