3 unexpected ways COVID-19 is impacting the packaging industry

The packaging industry saw its share of changes in 2020.

In the midst of the COVID-19 health crisis, packaged products became more important than ever. Concerns over food safety, a desire for products with an extended shelf life, and the explosion in demand for e-commerce almost overnight created unique challenges for those in the CPG industry. The only trend for a while seemed to be unpredictability.

In an effort to try to make some sense of 2020, our experts recently shared overall trends they've seen in the packaging industry as a result of the health crisis. Some changes were so unexpected that they deserved their own article! Read on for unexpected ways COVID-19 is impacting the packaging industry:

1. Year of the dog

According to Freight Waves, pet food suppliers saw a sudden surge in demand for their products as many Americans, faced with the idea of spending months alone at home, headed to the shelters to adopt pets. 

TD Ameritrade reports that between April and June 2020, 33% of Americans considered adopting a pet. Many shelters report that they have no adoptable animals left. And the ASPCA reported that the number of animals entering shelters dropped by 35% from 2019. 

“When COVID hit, everybody went out and bought a dog,” JJ Lewis, vice president of enterprise sales for GlobalTranz, told FreightWaves. “What that did was it brought a lot of people to the stores that had never bought pet supplies.”

Back in March 2020, faced with COVID-19 related restrictions, pet food sales accelerated faster than ever as owners stocked up. One large pet supply company reported a 300% increase in freight volumes! After March, sales dropped off for a while as owners depleted their stock. As August 2020 came around, however, pet food sales pulled ahead of 2019 numbers.

And even though more people are shopping for pet products overall, consumers are reducing the frequency of their shopping trips and stocking up more. The result? Packaging solutions that can provide safe, shelf-stable pet products are in demand. Pet Food Industry reports that the market segments seeing the most growth are dry pet food, as well as wet pet food packaged in trays and cups.

“When COVID hit, everybody went out and bought a dog. What that did was it brought a lot of people to the stores that had never bought pet supplies.” - JJ Lewis, vice president of enterprise sales, GlobalTranz

What this means for the packaging industry: Increased and unstable demand for pet food means growing demand for packaging solutions that enable manufacturers and contract packagers to push safe, shelf-stable product out the door faster. We've seen first-hand evidence of this: Interest in our pet food packaging equipment has nearly doubled year over year. 

Demand for dry, shelf-stable pet food, especially in bulk, means increased demand for flexible plastic pouches, especially with zipper reclosures.

2. Stocking up on cannabis

Groceries aren’t the only things consumers are stocking up on! Cannabis users are visiting retail outlets less often and spending more per visit, likely for safety and scheduling reasons.

Ecommerce cannabis sales have also seen an increase during the health crisis. I mean, what's better than ordering your cannabis products from the comfort of your couch?

Pot Guide reports that sales of pre-rolls, often shared among friends, are down, while sales of larger amounts of flower are way up. And let’s face it: COVID-19 affects the lungs, so it’s no surprise that the biggest increase in cannabis products goes to products that are eaten, not inhaled. Sales of edibles are up more than 28% on average.

2020 certainly had its fair share of challenges, but the cannabis industry is holding up fairly well. Cannabusiness was deemed essential by most US states during the COVID-19 pandemic, and while the industry did see it's share of challenges, it remains strong.

"Sales of [cannabis] edibles are up more than 28% on average." - Potguide

What this means for the packaging industry: As e-commerce takes hold and consumers stock up in bulk, growers and contract packagers have been forced to quickly adapt their packaging to meet the 'new normal.' Cannabis companies that may have been ambivalent about automating their packaging have now seen the need for automation to handle excessive and unpredictable demand. Then numbers don't lie: We're seeing a year over year increase of 60% in interest in cannabis packaging machinery.

Additionally, with the disruptions in the global supply chain (especially Asia), many cannabis companies have seen the benefit of soucing their packaging and equipment locally. This provides economic opportunities for local communities, at least temporarily.

3. Bringing artisan coffee home

During a time when the home is so many things: A place to live and a place to work (and for those with kids, a place to teach), sticking to a morning coffee routine becomes all the more important. Many consumers are opting for the convenience, safety, and wide variety offered by artisan coffee subscription services and online ordering.

The Perfect Daily Grind reports that "online sales and coffee subscription services saw an explosion in demand in the early months of 2020 as Covid-19 spread across the world." One Columbian roaster reported their online sales increased by about ten times in May and continue to be about eight times as popular as they were, even when not in full lockdown mode. A UK roaster saw sales increase so much that they created a subscription service to help manage demand.

The online coffee market is a competitive one, and coffee roasters and suppliers quickly realized they needed to set themselves apart from the competition. This often involved offering things like education, diversifying their product lines, and creating premium, novel packaging.

"One Columbian roaster reported their online sales increased by about ten times in May and continue to be about eight times as popular as they were, even when not in full lockdown mode."

What this means for the packaging industry: When demand for their products increases literally overnight, coffee subscription services (and the roasters that support them) are turning to automated coffee packaging equipment to increase throughput and efficiency. In fact, we've seen our established coffee clients invest in additional coffee packaging equipment in 2020. And they usually need equipment fast, so they take advantage of in-stock equipment that can ship out to their facility fast.

A desire for unique, premium, or small-batch-look packaging means more coffee companies are opting for premade bags, which offer a high-end look and almost unlimited options for novel shapes. These businesses then require premade pouch packing equipment to automate the filling and sealing of their coffee pouches.

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