Packaging World first surveyed its readership about their immediate reaction to the pandemic, as relates to packaging, in late March 2020. Answers were thus collected just as COVID-19 began to impact CPGs, mainly via safety-based consumer behavior changes, restrictions to foodservice rocking the omnichannel, new in-plant health regulations, and destabilization in the supply chains that support CPGs. Responses came in just as a ripple of uncertainty spread across logistics and supply chains. Meanwhile, the omnichannel shifted from the pre-COVID status quo mix of retail, foodservice, institutional, and e-comm channels that got packaged products to consumers, to a ‘new normal.’ It remains to be seen how permanent the emerging omnichannel landscape will be.
Three months later, in June 2020, we asked our readers the same questions again to see if attitudes or strategies have changed as we settle into the pandemic world. Note, these aren’t the same respondents, so it’s not a direct, 1::1 comparison of the same people asked twice. Instead, it’s a look at any change in sentiment in view of a new set of responses.
I personally was anticipating big shifts since the velocity of change between March and June, in my consumer experience, seems to have accelerated. But in fact, packaging professionals responding in March were both ahead of the game, and prescient about what the future held for their industry back then. By late March 2020, during the first survey, CPG respondents were already a pretty long way down their path toward the existing landscape, and June’s responses often mirror March’s.
Same factors keeping CPGs awake at night
Just as it was in March, health and safety is the biggest factor on the minds of respondents as their primary COVID-19 challenge. Of all respondents, 23% point to some factors of health and safety as the major challenge. Special concerns within this category include difficulty social distancing in a plant setting (16%), worker compliance to safety protocols (5%), and a lack or shortage of necessary PPE for employees (5%).
A significant portion of people also are concerned about meeting demand (18%). Considering most respondents are in food and beverage, and consumers continue to eat at a similar clip to pre-COVID levels, this means that downstream supply chain issues that hinder keeping up with demand—like upstream supply chain disruptions—continue to be a sore point. Said one respondent,
“Packaging demand mix changes are making it difficult to keep up with demand.” And another, “We’re essentially changing from a foodservice provider to a retail provider.”
Finally, workforce struggles with absenteeism and disrupted engagement continue to bother respondents. Said one,
“We are considered an essential business, but have allowed employees to stay home if not comfortable coming to work. Our biggest challenge has been staffing.”
Still working from home at the same clip
The work-from-home mix hasn’t changed; 61% of respondents are still going into the office or plant, flat from 62% in March. It should be noted that the lion’s share of respondents, both then and now, have been in food and beverage manufacturing, which tend to present very hands-on job requirements. The preponderance of food and beverage respondents was about the same in June (78%) as it was in March (81%), so what was happening in late March has largely held constant for food and beverage manufacturers.
Rush to produce PPE levels off
As of June, 20% of CPGs and brands that responded have added or are considering manufacturing PPE in the form of masks, hand sanitizers, and gloves. This figure was 19% in March, so once again, the percentage remained flat. There is a certain, finite number of industries that are well-suited for PPE production. Distilleries and cosmetics companies were already well-prepared to make the switch to hand sanitizer and added that capacity early on in the pandemic. Same goes for companies with strong material supply chains, especially those with access to thermoformers, blow molders, or other molding or forming machinery. These brands were already were on board with PPE production in March, so there haven’t been many new brands adding a line for PPE manufacturing since then.
Upstream supply chain challenges enumerated
Roughly half of all respondents, both in March and in June, report supply chain disruption. The happy half who reported no supply chain disruption changed from 53% in March to 54% in June, so once again, the figure remains flat. This consistency continues to demonstrate how mature and advanced packaging professionals and CPGs already were on their COVID-19 journey by March 2020; very little changed in terms of attitude toward supply chains by June 2020, though among those who are experiencing disruptions, the number of supply inputs being disrupted is growing.
The types of supplies that are causing problems remain quite similar to those reported in March. Raw materials/ingredients remain the top culprit of supply chain disruption, with packaging materials the next most mentioned category. It should be noted, particularly as it relates to packaging materials and PPE, that many CPGs are not experiencing as many shortages of packaging materials or PPE, rather they are experiencing longer lead times that can be countered with temporary inventorying of packaging materials and PPE.
“Lead times on sanitizers and some packaging materials have been extended, though we have not faced shortages,” said one respondent.
“We have seen longer lead times for packaging and ingredients, but for the most part, have been in stock on our core items,” said another respondent.
Finally, of those experiencing supply chain disruptions in June, 38% report that the disruptions are primarily domestic, 23% report that disruptions are primarily internationals, and the remaining 38% claim disruptions are a mix of foreign and domestic
Remote access’s time to shine?
Many stakeholders have observed that, due to production facilities closing their doors to outsiders during the pandemic, now may be a moment where the immense potential for remote access and monitoring for troubleshooting and vendor support might finally be realized. We asked of our audience a new question in June (not on survey in March) if they allow vendors into their facilities for maintenance, etc. To our surprise, 78% of responses allow vendors into their facility as of June 10th, leaving only 12 respondents saying they do not let vendors in.
That means our sample size of possible remote monitoring/access converts is limited to only 12 individuals out of 56 total responses. Of those 12 respondents, five already allow machinery builders and other vendors remote access to their machinery. Another four do not and never will, according to them. This leaves only three respondents in the 56-respondent set who had not allowed remote access prior to the pandemic, but are more open to it now. While this doesn’t illustrate a groundswell of new support for remote access capability, necessity has convinced at least a few that they should be looking into remote access. When asked their reasons for changing their attitude toward remote, the two write in responses said:
“New restrictions due to COVID-19,” and “Not having in-person tech support.”
The jury is still out on if this pandemic will result in accelerated remote monitoring adoption. If only in two of the responses, there were certain mentions of increased openness to remote. But the relative openness to vendors and suppliers coming into plants for maintenance and troubleshooting, even during COVID-19, kept the sample sizes too low to extrapolate. We continue to follow remote access adoption rates.