Flexible packaging consumption will be lifted in the short term in both Europe and the US as a result of stockpiling, lockdowns and the increased need for medical supplies, says data and analytics group Wood Mackenzie (Edinburgh / UK; www.woodmac.com). US demand for consumer flexible packaging is forecast to rise by up to 10% this year, compared to 3% in 2019.

In Europe, demand could increase by more than 5% this year following 1.5% growth in 2019. “New restrictions on daily life have had a huge impact on how we consume [fast moving consumer goods],” said Rob Gilfillan, head of fibres, films and flexible packaging at Wood Mackenzie. “The speed at which governments have introduced these measures is unprecedented, with many sectors of the food processing industry struggling to adapt. This rapid change has caused a wave of panic buying and stockpiling across Europe and North America.”

The sudden lack of choice around how and where people consume food has forced huge volumes of food consumption away from the food service sector, such as restaurants and cafes. “This has been pushed through the retail sector instead, which naturally favours pre-packaged food in smaller consumer-sized packaging,” Gilfillan added. Already in March, European market players were telling Plasteurope.com about the notably higher demand, for example with food packaging made from polyolefins (see Plasteurope.com of 03.04.2020 and 03.04.2020). Huhtamaki (Espoo / Finland; www.huhtamaki.com) and Mondi (Johannesburg / South Africa; www.mondigroup.com) are among the packaging companies noticing the shifts in demand (see Plasteurope.com of 03.04.2020 and 14.04.2020).

Packaging sustainability has taken a back seat during this crisis but will come back to prominence once the current situation eases, says Wood Mackenzie. However, if crude oil prices remain low, the use of virgin plastics will be an attractive proposition compared with more expensive post-consumer recyclate.

The forecasts are obviously dependent on the extent of the current lockdown measures, and Wood Mackenzie pointed to the fragility of the supply chain. While the sourcing of flexible packaging raw materials is currently holding up, transportation costs have risen sharply, and this was the main driver of an increase in European BOPET film prices in March, it said.

In the healthcare sector, demand for flexible packaging in medical supplies, such as gowns and swabs, has increased since the beginning of March. “This increase in demand has moved through the supply chain, with converters pre-ordering large volumes of plastic film because they are anticipating a shortage in flexible packaging raw materials,” said Gilfillan. “BOPET film producers in both Europe and the US, for example, are reporting an uplift in bulk orders from packers looking to meet increased demand.”

Demand for comfort foods, such as chocolate and confectionery, baked goods and biscuits as well as alcohol and tobacco, has risen across both regions. In the US, coffee is in high demand, lifting demand for high-quality and high-value printed laminates for the retail coffee market. Coffee consumption in the country is estimated to be at least 50% higher than is typical for this time of year. Converters manufacturing unprinted flexible packaging for the meat and cheese sector are also reporting higher than usual orders.