The CPG packaging industry has thrived during the pandemic, with consumers traveling less and spending more. Brands found ways to overcome CPG challenges due to a high demand for products customers needed.
Consumer preferences, the availability of materials, and changes in processing continue to evolve, bringing about new packaging company challenges. Here are five challenges these businesses and their clients may face in the coming year.
1. Delivering During an Ongoing Pandemic
While business is picking back up, the global COVID-19 pandemic continues. This leads to increasing demand for certain products, leading to CPG packaging shortages.
Online buying is on the rise, requiring CPG brands to ship products. This uses even more packaging materials, adding to this packaging challenge. In the UK alone, online sales grew 74% from January 2020 to January 2021.
During the pandemic, businesses were forced to adapt their e-commerce model to meet the increasing product delivery demands. This continues to be the case, as CPG brands are still experiencing packaging shortages and will need to make additional modifications.
2. Balancing Production and Social Distancing
Manufacturers face pressure when trying to balance production with social distancing. This is especially challenging with increasing demand.
It’s difficult to increase or even maintain production when workers performing hands-on tasks must be a certain distance apart. This forces companies to find creative ways of getting the job done.
3. Shifting Consumer Behavior
Sustainability is a top priority for customers. Companies are listening to their concerns and are beginning to look for alternative packaging materials that are environmentally friendly.
Many businesses have set goals to eliminate using plastics in their CPG packaging altogether. Many are switching to paper and cardboard-based containers.
The corrugate market is struggling to keep up. Shortages of these materials is prompting some companies to go back to using plastics, which isn’t aligning with what many consumers want. Possible solutions to the challenge are to use other packaging materials such as seaweed or bamboo.
4. Increasing Prices
Price increases occur when supply is low, and demand is high. Paper costs, along with other essential costs, have risen, affecting the price of boxes.
A shortage of wood and steel is also affecting the pallet market. This makes it difficult to ship products, leading to significant delivery delays.
Companies can overcome this challenge by considering pallets made of other materials such as plastic. Another option is to reuse pallets.
5. Changing Technology
Technology changes rapidly in every industry, and CPG packaging is no exception. Along with the focus on sustainability, many companies are doing what they can to reduce their carbon footprint. Using innovative technology enables this to happen while ensuring the latest processes are put in place.
Upgrading technology requires capital, which can be a challenge when faced with supply chain issues and other shortages. The increasing business will help provide funding for the technology needed to keep up with the changing times.
The key to overcoming packaging company challenges is continual planning. This requires rethinking processes and keeping up with CPG trends.
High performance enables CPG brands to add value across all channels. Research shows e-commerce makes up 65% of growth among consumers.
Companies are experiencing new challenges as the packaging industry continues to evolve. This leaves more room for innovation and improvement.
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