Imbroglio and Challenges for the Packaging Industry Post-COVID-19
May 21, 2020
by Mohd Imran Siddiquei and Waseem Khan, Institute of Business Management, GLA University
COVID-19 has been spreading with disastrous effects around the globe. The consequences of this pandemic are felt everywhere, including in the packaging sector. As social distancing would become a norm in the future to control the contagious virus from spreading, it will have implications for the packaging industry also. As the demand for essential goods like food, medicine, and other important items are zooming up, lack of packaging material may pose serious repercussions for the entire supply chain. The article will highlight challenges and opportunities for the packaging industry in tough times of COVID 19.
Virus Retention and Transmission
The exponential rise in delivered goods directly to home has raised serious concern over involuntarily spread of COVID 19. Social media has been flooded by post raising the question about the spread of infection due to packaging, consumers are worried and skeptical about the chances of infection carried on the packaging. As per experts, the chances of transmission of the virus through packaging is negligible. However, COVID-19 virus has been found to survive on the surface of cardboard for twenty-four hours (Neeltie et al, 2020). Although a desire for essential products generally seems to have overridden the fears of most consumers, it is a significant reminder of how misunderstanding and confusion can easily affect a shift in consumer behavior. In this situation, it would be a wise move to integrate and explore new materials that are virus resistance or less susceptible to virus transmission that can build a long-term competitive advantage.
Environmental Concerns Taking a Back Seat
The mantra of reduce reuse, recycle is taking a back seat due to tsunamis of COVID-19 implication. Traditional materials like cardboard, plastic, and glass have again gained the momentum as they are more fit and practical to deal with this contagious disease. There is a clear shift from sustainable packaging to traditional single-use disposable packaging. The fear psychosis in customers, retailers, wholesalers, and other stakeholder have pushed towards greater use of single-use packaging in order to control the transmission of the deadly virus.
Cost of Packaging Material
Kraft and other writing paper prices are set to increase dramatically after the Covid-19 lockout owing to an unprecedented scarcity of waste paper and a heavy tax imposed on ports-lying consignments of manufactured raw material. Kraft paper is commonly used to build cartons for cardboard and packaging. Following the Covid-19 pandemic, most countries either burn waste paper or put it on landfills to avoid coronavirus spread. This has caused a massive lack of raw materials.
Customer Awareness Level
As the coronavirus pandemic is raging worldwide, there is now a greater understanding of the value of purchasing packaged goods, particularly when it comes to foodstuffs. People have come to know and recognize that package goods are healthier relative to loose marketed products in developing economies. Consumers are preferring to buy edible products and short shelf-life products in packaged form and thus reducing the chances of transmission of the virus. This factor is further fueling the demand for the packaging industry.
Rise in E-commerce
With most traditional shopping outlets closed during the lockdown, online orders are booming as sellers seek to keep business running. Many retailers that previously would not have had a large online presence were often compelled to move their business strategy to e-commerce to ensure sustainability. As a result, the e-commerce-specific packaging requirement is high. The retail emphasis now is on delivering items to customers for the first time in a healthy way, so the value of packaging that provides goods safety having resistance technology has never been more important. The companies providing material to e-commerce companies would be benefited due to spurt in online sales. The momentum will help the packaging sector to generate revenue in these testing times.
Social distancing would play a crucial role in the economic implications for many types of businesses. Some businesses like restaurants, cafes are on the verge of closing downs, they are searching for alternatives ideas to remain sustainable and feasible. The restaurants have to take the inevitable decision to take the help of food delivery partners like uber eats, Zomato, swiggy, in delivering the food to the customer doorstep. Customers would prefer to order food through these platforms rather than visiting the places. The government is also encouraging Restaurants to deliver food to the customer at home. As more restaurants would opt for delivery partners, the demand for packing material would also increase.
COVID-19 has impacted the entire world in an unprecedented manner, some of the sectors have been impacted heavily while others can come out of the crises slowly as things are getting improved. The packaging industry is one of the few industries which have more positives implications comparison negative ones due to this contagious disease. Apart from a few challenges which will pass with time, the opportunities are much larger, can be converted into larger gains for the packaging industry in the future. Time has come to develop a unified strategy for the packaging industry to create economic value with aligning future goals in synchronization with supply chain, environment, and human health, which can deliver greater efficiency and benefits for our economy, environment, and society.