Covid-19: effect on Paper and Packaging companies
The coronavirus pandemic is causing widespread concern and economic deprivation of business, consumer and communities all over the world. Manufactures encounter several challenges due to this crisis paper and packaging producers are no exception. Self-isolation has resulted in short supply and plethora of manufacturing units is sourcing supply chains away from china.
The impact of covid-19 on the packaging industry will have mixed impact and it depends on their portfolios to different end-users of packaging. Most of the packaging manufacturers supply their products and services to important industries including pharmaceutical packaging, packaged food, labelling of hand sanitizers and disinfectants, and packaging of soaps, detergents and hand washes which are currently in high demand. However, without significant packaging, entire food, pharmaceutical, and consumer goods industry will collapse.
Although the COVID-19 pandemic continues to transform the growth of various industries, the immediate impact of the outbreak is varied. While a few industries will register a drop in demand, numerous others will continue to remain unscathed and show promising growth opportunities. Technavio’s in-depth research has all your needs covered as our research reports include all foreseeable market scenarios, including pre- & post-COVID-19 analysis
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As many end-use industries are on the rise such as Personal care, Pharmaceutical, Healthcare, and Cosmetics, it is anticipated that the future of the Composite Packaging market is prominent and the market will grow substantially in terms of value as well as volume during the forecast period. Over recent years, the horizon of consumers is shifted to online shopping which also expected to create a lucrative market for Composite Packaging.
Packaging companies that serve these more resilient sectors are likely to do well in the current environment, with stockpiling, changing demand patterns and government measures likely to lead to an increased demand for certain products.
Research conducted by UK-based packaging industry expert Infiniti Research at the end of May revealed that industries that supply for groceries, consumer goods, pharmaceuticals, and e-commerce are “expected to witness a steep increase”. The demand for luxury and industrial packaging, however, may show a decline.
Social distancing measures implemented globally have meant that some products, such as in the cosmetics and beauty industry, have been low in demand. The global recession forecasted for 2020 will also likely have a negative impact on consumer spending according to Moody’s.
What should packaging companies consider post-coronavirus?
Infiniti Research advises packaging companies to consider implementing recovery strategies to include a mixture of financial resilience and plans for restarting operations at packaging plants, plus strategic customer-focused moves “such as understanding the impact of Covid-19 on consumer packaging choices”.
The global packaging market size during the COVID-19 pandemic is projected to grow from USD 909.2 billion in 2019 to USD 1,012.6 billion by 2021.
During the COVID-19 pandemic, states and local municipalities are practicing extreme caution to avoid the spread of the coronavirus. Healthcare products, such as syringes, vials, and cartridges, are required on a large scale amidst this pandemic to fulfill the increasing global demand.
The plastic packaging segment is projected to lead the market during the forecast period.
Flexible Packaging Market in India is segmented as below:
· End-user
o Food and Beverage Industry
o Pharmaceutical Industry
o Personal Care Industry
o Others
Impact of covid19 on different packaging industry
· Food and Beverage Packaging Industry
The food and beverage segment plays a vital role in packaging industry. The primary reason of the food and beverage industry before the pandemic includes the increase in on-the-go consumers and rise in adoption of packaged and ready to eat food products. The outbreak of covid-19 pandemic has mixed impact on this segment. Offline food chains which includes cafes and restaurants which are entirely closed in all the regions which will impact negatively in the market. Moreover, the packaged food and beverages are witnessing an upsurge in the demand, due to rise in necessity food products, and shelf stable foods. China is the largest importer of dairy products is down with 30%-40% with the world market. However, demand of grocery segment, dairy products segments increases and it drives the revenue of the manufactures of vacuum packaging, trays, protective films, including PVC film and shelf life-extending modified atmospheric packaging and others.
Companies such as Coca Cola have experienced a delay in supply chain and unable to receive raw material from China consequently, experienced delay in production.
The US Food and Drug Admiration announce that it will provide temporary flexibility regarding nutrition labelling on packaged food during the pandemic.
· Healthcare Packaging Industry
Pandemic will not hamper the growth of packaging products in healthcare industry. Plastic which is banned by the government is back in the business due to the pandemic. The plastic sector has the highest demand and several manufactures has started using plastic for health care safety. In the current situation, the government has allowed running of packaging plants with minimal strength. However, due lack of workforce, shortage in raw materials, and transportation restrictions hamper the supply of products. Demand will rise for specific products including dietary supplements such as flexible blister foils, closures, rigid plastics, pumps, to name few.
· E-Commerce Packaging Industry
E-commerce also encourage social distancing, due to which there has been an exponential rise in online purchase of necessity consumer goods including grocery and hygiene products drive the growth of packaging industry. E-pharma, e-consultations, saw 55%-70% spike in the growth. Moreover, initial raise in food delivery declined in second phase over the world. However, there has been a decline of 25%-30% in electronics, including mobile phones as China accounted for most cases of COVID-19 and as per the International Trade Union Federation (ITUF); the country is the largest producer of the electronics and its parts globally. Protective inner packaging, flexible padded pouches, and traditional corrugated cardboard boxes are benefiting significantly from the increase in ecommerce spend.
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