Remember the old saying, the only thing that’s constant is change? This year is no exception. Four major trends are propelling organizations to act on new packaging optimization opportunities with a sense of urgency.
1. Covid-19 supply chain disruptions
You won’t be surprised that pandemic disruptions last year were the number one driver of packaging changes and optimizations the past few years. But unfortunately, every industry is still feeling the impact.
The Covid-19 pandemic has led to fluctuating demand, global supply chain disruptions fueled by staff shortages, new safety regulations, and the acceleration of eCommerce direct to consumer shopping. CNBC reports that shipping a container through major US ports now takes three times as long as it did pre-covid. As a company based near the Port of Long Beach, watching ships line up at critical ports is a stark reminder that these disruptions still have a major effect.Supply chain disruption is the new normal, and it’s critical for manufacturers to build flexible and agile response plans. The pace of change is only accelerating, with ongoing disruptive events, and an expectation to return to more normal operations.
2. eCommerce trends and continued shipping expectations
Two-day shipping has been instilled as a consumer expectation for nearly two decades now, with Amazon launching the Prime shipping program in 2005.But consumer shopping patterns are creating fluctuating demand, and distribution methods are more variable now than ever before. Although these trends were not created by the pandemic - even in 2018, 70% of consumers list convenience as a major driver of online shopping trends.
Yet, the past two years has only served to accelerate the direct to consumer, eCommerce journey (and make the supply chain extremely complex). Product and package design directly influence the distribution environment, placing the importance of optimization even higher.
It's now common place that products are packaged for massive trucks, independent Amazon delivery vans, in-store retail shelves and even drone drop offs and locker pick up - a much bigger variety than we've had to manage in the past. And it's not just the size of the transportation vehicle. Packaging must take into account highly variable temperatures, vibrations, humidity levels, warehouse space limitations, and now, Covid-19 sanitation policies. Digitization of the shopping experience is continuing to grow. In fact, 66% of US manufacturers in a PWC survey agree that implementing digital marketing and sales over the next two years is a “high” or “very high” priority.
3. Corporate sustainability initiatives gain traction
Material reduction and reuse has a meaningful impact on the bottom line today, and will continue to in the coming years. In a 2021 survey conducted by Deloitte states that almost half of the 750 executives surveyed reported that their environmental sustainability initiatives measurably boosted their corporate financial performance.Sustainable practices can more efficiently distribute truck loads and reduce emissions along with material waste. It’s no wonder that sustainability initiatives are a top driver of packaging improvements, but doing so requires careful tracking of actionable, real-time metrics.
4. Regulatory oversight is intensifying
In 1967, the Fair Packaging and Labeling Act gave authority to the Federal Trade Commission (FTC) and the Food and Drug Administration (FDA) to regulate product labeling to keep consumers informed. At the time labeling was relatively simple.
But times are changing, and regulators are responding to calls for greater transparency.California, Vermont, Maine, New York and Washington have passed legislation banning the use of PFAS substances in food packaging. This is just one area of regulation that’s being enhanced. Four additional packaging-related bills are currently making their way through congress. It's clear that regulatory oversight is on the rise, and will be placing new demands on manufacturers to increase transparency and accountability for their packaging decision-making.
The State of Packaging and Pallet Optimization
Packaging optimization is a great tool for managing the ever-changing supply chain environment - and businesses are in the hot seat to respond during these unprecedented times. Download this research report to equip you with the benchmarks and recommendations to reach your goals and drive efficiency.
