2020 was supposed to be the ‘year of sustainability’, building on the momentum of last year where climate action and reducing plastics pollution were at the forefront of discussions. Focus has quite rightly shifted towards overcoming the Coronavirus pandemic (Covid-19).
In part 1 of this series, we use IGD insight to look at the impact on the FMCG and packaging industries alongside consumer behaviours and what the potential implications are on the environment. Part 2 focuses on positive action taken in response to Covid-19 and how we can capitalise of these to create a sustainable packaging system going forward. We will also discuss whether the proposed next steps from IGD's collaborative sustainable packaging systems workshop, held in February this year, are still valid. The write up can be found here.
FMCG and packaging industries are dealing with the day-to-day challenges of Covid-19
Most companies are focussing on ensuring the safety of their staff and customers, managing elevated demand for essential items, and supporting their local communities. However, some are faring better than others such as those ensuring that people can still eat, drink and wash e.g. supermarkets – where many have reported sales increases of 20-30%, whereas the hospitality sector has been particularly hard hit. Pret A Manger recently sought £87m in urgent bank funding to support the business during the ongoing shutdown. The packaging supply chain is having to become more flexible and demand is unpredictable – it’s having to deal with staff shortages and challenging retail conditions. There has been a huge increase in demand for food and detergent related packaging, but less so in others where cash flow is likely to (if not already) become an issue. Another trend is that some companies are moving sourcing away from China and reconsidering materials used in packaging (Packaging Gateway).
We’ve altered the way we shop
Online: There has been a significant uptake on buying online, with new users trying it for the first time. Tesco reported a rocketing demand for online slots and increased its click and collect and online services by 30%, and Ocado recently reported a sales increase of 40.4% for Q2.
Advance ordering: Many businesses have adopted remote drop offs and click and collect-style purchases.
Local: Shoppers are prioritising local convenience when it comes to where they shop. The Association of Convenience Stores reported a huge increase in home deliveries of 600,000 per week, up by two thirds. A recent Hubbub survey also showed that more than a third of people are supporting smaller or local businesses, with 29% said they were using their local corner shop/convenience store for the first time.
Saving money: Consumers are also more focused on conserving money, doing more smaller top-up shopping trips and buying better quality food.
Fewer takeways: According to Hubbub’s research, 43% are buying fewer takeaways as they are worried about contamination – an important note in terms of packaging.
Importantly, there are signs that these shopping habits will continue with the majority of those surveyed saying they will continue with any changes made.
What does this mean for the environment?
- More packaging & packaging waste? There are already signs that many consumers have rethought their preference for ‘packaging free’ consumption. With hygiene and safety being more prominent in consumers’ minds, will they want to see a layer of film on their veg?
- Less reuse? Some foodservice chains have halted use of personal cups because of the risk of contamination. Will this continue and lead to a slowdown in other reuse initiatives?
- Less recycled plastic in packaging? There is a risk that the low oil price may lead to an increase in the use of virgin plastic materials.
- More single use plastics? Plastics are being seen in a new light and in some places, Covid-19 is being used to bring back single use plastic bags rather than accept reusable ones. We need to ensure that packaging is appropriate to its function but not at the detriment of more plastic pollution in the environment.
- More packaging waste in the home? With people eating at home rather than in restaurants undoubtedly there will be an increase in packaging waste in the home. With household recycling levels still relatively low, will this be effectively sorted and recycled?
- Less innovation and R&D? Standard packaging materials including cardboard, glass and plastic have seen an uptake compared with those considered to be more sustainable such as plant based ones, mainly due to scale and fast production turnaround. What will happen to these more sustainable options in their infancy?
Going forward, how will businesses respond to these new shopper habits whilst balancing the environmental impacts? Will they make it part of their business strategy going forward? And if so, what are the implications on the packaging industry?
In Part 2, we discuss how industry has responded to Covid-19 and how we can use these learnings to shift the packaging system to bring about lower emissions and less waste.