Packaging Manufacturing Predictions Post-Pandemic

Think of the role that packaging plays in your life. Think of how many wrappers, coffee pods, blister packs, clear plastic films, boxes, bags, pouches, takeout containers, etc. we handle every day. Packaging is everywhere. Unfortunately, for the past year, COVID-19 has been everywhere too. And as COVID-19 has changed the world permanently in so many ways, from how we live to how we work, it has changed packaging too.

The packaging industry has to stay on the forefront of change because what they produce affects so many other markets, like food and beverage, consumer goods and healthcare packaging. Here’s how packaging manufacturing has evolved during the pandemic.

Digital is Here to Stay

There’s no going back. The level of complexity in packaging manufacturing has increased rapidly, and in order to manage it, so has the wider use of digital technology. According to McKinsey, many execs report that their companies moved 20 to 25 times faster than what they thought possible to build supply chain redundancies, improve data security and expand the use of advanced technologies in operations. Packaging manufacturers are now using smart sensors to improve packaging machinery performance, and using IoT technology to create compelling product packaging features.

E-commerce is Booming

During the last year, many stayed home, shopped online, had their purchases delivered and then unwrapped them from their cardboard and film packaging. All of the growth in retail in 2020 came from e-commerce. Online spending represented 21.3% of total retail sales for the year, according to Digital Commerce 360 estimates. 

E-commerce in the US is forecasted to reach 24% by 2024. It hit 33% in July 2020. And in Germany, Romania and Switzerland – the three lowest e-commerce countries in Europe – e-commerce increased by 28, 25 and 18% respectively. 

The packaging industry is developing new, more cost-effective materials for e-commerce, such as easy-to-return containers, reusable packaging and paper as fill.

The Supply Chain is Unchained

The push for sustainability continues in all manufacturing sectors and the impact on the packaging industry could be huge. Sustainability will challenge the supply chain with new materials, sources and logistics. These changes mean that packaging manufacturers will manage more complexity. Storage and transportation issues will grow more complicated, and the number of packaging alternatives will increase to accommodate more variations in product weights and sizes and to manage temperature issues.

Manufacturers will also mount a greater effort to manage risk. After the toilet paper and computer chip shortages that caused delivery disruptions during the pandemic, McKinsey projects the post-COVID-19 supply chain will be more than single source and not just “just in time,” but “just in time plus just in case.”

We All Work from Anywhere

Before the pandemic, one in five workers who could do their jobs from home, did so. Now, 71% of those workers are working remotely all or most of the time. And of those, more than half say that given a choice, they want to keep working from home even after the pandemic, according to a new Pew Research Center survey.

Changes in packaging manufacturing have followed our changes in working habits. We’ve been encouraged to support local restaurants and order food for takeout or delivery as we work from and spend more time at home, driving up the use of disposable food packaging. At the same time, sustainability efforts like bringing your own mug to the coffee shop or bringing your own bag to the grocery store have been suspended during the pandemic, so single-use plastic cups and bags are making a comeback.

Sustainability is in

During 2020, reducing and reformatting were the most used sustainability techniques of the five Rs — reduce, recycle, reuse, reformat and renew. In 2021, the world has seen a flurry of packaging reuse initiatives.

Consumers are dictating packaging desires to the manufacturers in the areas of portability, look and feel, and sustainable principles. If manufacturers don’t comply with what the consumer feels is an adequate “sustainable packaging” philosophy or strategy, they’ll simply buy the product they need from another manufacturer. In addition, consumers are also concerning themselves with the sustainability practices of the entire value chain. If a retailer or retail channel doesn’t subscribe to sustainable practices, customers won’t think twice about shopping elsewhere for compliant products.

Consumers spending more time at home and seeing their garbage cans fill up more often may discover a new awareness of the environmental impact of their actions. 

SKUs are Proliferating 

The food and beverage, consumer products and healthcare industries have seen product and packaging SKUs grow at unprecedented rates for years. When everyone thought SKU proliferation would take a step back, we’ve seen greater CPG company innovation and many more new products. Brand owners forecast a 42% increase in the number of SKUs over the next 2 years. 

Post-COVID-19, the prediction is that the movement will continue, as “googling” during our COVID year has fueled pent-up demand for more and different products. The race for competitive advantage will run through new SKUs.

For more post-pandemic projections and discussion of how the packaging and food & beverage industries are adapting, watch our webinar replay, “6 Post-Pandemic Predictions for Packaging Manufacturers”!