Defeat packaging supply interruptions
Consumers need safe food, medicine and other consumer goods now more than ever.
As McKinsey & Company note, the ﬁght to defeat COVID-19 is starting to affect consumer product choices. Packaging designs and substrates that demonstrably address hygiene and consumer safety concerns, like those that minimise the possibility of the virus’s survival on the packaging surface, are being sought out by obviously-cautious shoppers.
It’s called the ‘anxiety economy’ and it’s not going to go away anytime soon.
While anxiety around whether the virus can live on food packaging – and for how long – might dissipate as the crisis becomes less life-threatening, the heightened awareness around how food is packaged will stay with us for a long time. As feelings of panic and helplessness raise consumers’ awareness and inﬂuence, expectations of transparency from brands will increase. Messaging on packaging will need to be updated as consumers look for an outline on how the product was sourced, processed, transported and handled. Ingredient information will also feature prominently with more consumers, now highly aware of their health and more focused on mitigating illness.
At Masterpack Cape we hold an A-Grade BRC (British Retail Consortium) food packaging safety certiﬁcation for the manufacture of paper bags and folding cartons. This means we are part of a leading international product safety and quality certiﬁcation program used by certiﬁed suppliers in over 100 countries. It facilitates standardisation of quality, safety, operational criteria and manufacturers’ fulﬁlment of legal obligations, which helps to protect the consumer.
Not all companies are equally exposed to COVID-19 risk.
Globally, consumer goods have proved to be a relatively safe haven. The declines, while steep, have still not been as pronounced as in other sectors. Many consumer goods are considered ‘essential’ and so don’t react to slowdowns as much as other products in other sectors. But COVID-19 is becoming a household name across South Africa and demand for food packaging materials is increasing, especially shelf-ready packaging, driven by retailers’ needs to meet rising consumer demand that requires shelves to be restocked faster than normal.
Packaging companies have a responsibility to adapt to this new environment.
Supply chains are becoming more and more valuable. At Bidvest-owned Masterpack Cape, our strategic selection of partners has allowed us to meet the challenging service requirements of both national and regional customers. Globally, the coronavirus has accelerated existing trends such as ‘China Plus One’, with companies seeking to reduce their reliance on any one country and looking to local suppliers as international supply chains falter. Masterpack Cape is well-positioned to maintain delivery to our customers, thanks to our national footprint, strong ﬁnancial proﬁle and the incredible dedication of our staff.
But it’s the economic shock that will have the greatest effect on packaging trends in the short-term.
Many South Africans are facing a future where lower household disposable income is the reality. This, coupled with strained corporate balance sheets, will create signiﬁcant pressure to reduce selling prices and costs along the entire supply chain. Packaging will need to evolve to become more cost-effective, without losing its premium qualities. This will require signiﬁcant collaboration between packaging companies and their customers, while access to multiple supply partners will be vital. At Masterpack Cape, we have a proud tradition of producing work that assists our customers to gain a competitive edge in their market. Now, more than ever, we will be concentrating on providing packaging that is well priced, top quality and delivered promptly to customers like Woolworths and Shoprite. Our ‘theory of constraint’ thinking will also ensure we continue to deliver on tight budgets, short runs and fast lead times.
As many consumers’ purchasing decisions are forced to change, there will be a need for food producers to rethink product lines, with many consumers looking for smaller pack sizes at more affordable prices. ‘Travel size’ products are projected to grow in a devastated economy, with consumers forced to downsize on luxury products. These will include products across different segments including beauty, personal care, washing powder and salad dressings. As ﬁnancial constraints force consumers to shop on a tight budget, small pack sizes increase the opportunity for trial and product switching.
As the ‘new normal’ takes effect, food producers and manufacturers will be judged on the level of thinking they’ve put into their product packaging so that it meets the demands of a stressed, ﬁnancially constrained and fearful consumer.
Many consumers hold the belief that food packaging is a ‘major environmental problem’ and ‘wasteful and unnecessary’. At Masterpack Cape, we have incorporated environmentally responsible practices across all levels of our company. This commitment isn’t set to change, but we recognise that packaging needs to play a more vital role in supporting the needs of consumers in vastly more practical ways.
Consumers are looking to brands for education.
What hygiene processes has your brand incorporated into your supply chain to make the product safer? How can it be stored efficiently so it lasts longer? What affordable food choices can be added to it to make it stretch further? These are the kinds of messages consumers will be looking for as tough times bite.
As Winston Churchill said, “Even in the toughest times, organisations should keep in mind that opportunity does indeed exist.”
The COVID-19 crisis and the ensuing economic challenges will change consumers’ expectations. From the panic buying, seen during our lockdown, with a focus on bulk buying, once back to old routines, consumers will not be the same as those who walked into retailers at the beginning of 2020. Their world views have shifted. Transparency, integrity and trust are all essential if brands are going to continue to enjoy the support of these much-changed consumers. Packaging is your voice. It can also prove your commitment to sharing consumers’ concerns and pain. Helpful portioning, care to prevent waste and smart affordability options will be key to succeeding in a very different retail environment. Those companies that do take the time to see the new world through the consumers eyes will also have the chance to create a better one.
September 30, 2019
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