Covid-19 Executive Briefing
Understanding the economic impact of the Covid-19 pandemic and the implications for the packaging sector
- ECONOMIC IMPACT -
Latest update: 25 August 2020
Fitch Ratings reports that the combined GDP of the US, China and Eurozone contracted by 4.1%
Cumulative output in the Eurozone declined by 15.3% in H1 2020, according to the European Central Bank.
According to the IMF, the pandemic has cost an estimated $375bn a month globally. It projects a $12tn loss for the global economy over the next two years.
The end of the UK furlough scheme is predicted to push unemployment to 10%.
Impact of Covid-19 on GDP GROWTH
- SECTOR IMPACT: PACKAGING -
Latest update: 26 August 2020
Consumer market impact
GlobalData’s latest forecasts show a decline of 4.0% in consumer products for 2020 compared to baseline predictions, equivalent to $362.5bn in lost revenue.
Kraft Heinz second quarter 2020 sales increased 7.4% versus the year-ago period
Covid-19 could change longer-term consumer behavior; the most successful companies will alter their strategies to accommodate this.
Suppliers with international operations continue to acknowledge the necessity of moving away from single-source dependencies, as well as the incorporation of digital tools to improve resilience throughout and beyond the pandemic.
Consumer goods firms recognize the continued importance of sustainable supply chains amid the pandemic. Unilever recently piloted new technology to improve the traceability of its palm oil and soy on the journey it takes from planation to mill.
packaging market impact
The rise of the e-commerce channel is significantly impacting the packaging industry, and suppliers are optimizing packaging to be more robust for this channel to meet manufacturer requirements.
Packaging for shelf-stable food products continues to be in demand, while demand for luxury goods packaging is stale as discretionary spending is reduced. Packaging for the foodservice channel is reduced as consumers exercise caution and some are avoiding food cooked outside of the home even if delivered.
Manufacturing ecosystem company Fictiv reported that 96% of US manufacturers are working to increase supply chain agility, and 87% are making digital transforming a high priority, with both themes evident in the packaging industry.