Reflections on the Packaging Industry’s Wild Year

The past 12 months have been unlike anything else we have experienced in our lifetimes. This pandemic has shaken up our industry in many different ways, with both positive and negative repercussions for our business.

Increased Demand for Packaging Materials

The first thing we noticed as the pandemic hit was an increased demand for paperboard and plastic supplies. Restaurants were rapidly forced to expand take-out and delivery services. Retailers shifted even further into e-commerce business models. E-commerce was already on a steady upward trend throughout the past decade-plus, but demand suddenly spiked and many business owners struggled to keep up. 

At first, this increase in demand for packaging materials was manageable. Now, we are faced with shortages as the need still outweighs the available supply. As a packaging systems company, First Packaging Systems has always taken a proactive approach to maintain our inventory in anticipation of customer needs. We’ve had to expand our efforts, grow our team and be even more aggressive in the past year to maintain this service. We’ve anticipated shortages and increased demand, and have been able to make sure our customers have the materials they require for product packaging, bulk packaging and shipping. 

Material Manufacturing Pressure

We’ll never forget hearing about the Covid-19 test kit company who attempted to buy the full three-shift production capacity of a Fortune 500 company’s two corrugated materials manufacturing facilities. They wanted to purchase everything because they had such a high demand for these packaging materials and wanted to lock in a stable supply. The manufacturer had to politely decline this offer because they had so much demand of their own. In all our years in business, we’ve never seen an acquisition offer of this scale.

Packaging Industry Trends

At FPS, we saw several major trends arise during the Covid-19 pandemic:

1. E-commerce Explosion—E-commerce and home delivery services have grown so immensely because of the virus, leading to major disruption in the packaging industry.
2. Covid-19 Tests & Vaccines—The distribution of Covid-19 test kits and vaccines have dominated the packaging landscape. They have rightfully taken priority over other manufacturing services.
3. Lack of Quality Labor—Though the overall job market has been hit hard, the need for skilled workers in the packaging industry has skyrocketed. Manufacturers are having a hard time filling these positions with a quality labor force.
4. Employee Illness & Safety—Because of Covid-19 regulations and general concern for worker safety, it has been difficult for manufacturers to fill production shifts or add production shifts to meet increased demand.
5. Need for Automation—With labor issues and increased demand for materials, manufacturers are realizing how important technology and automation are. Those who weren’t ready to adapt to more automated systems have fallen behind the curve.
6. Transportation Issues—Many companies in our industry depend on sophisticated systems and algorithms to deal with complex transportation schedules. The pandemic has made many of these algorithms ineffective because they weren’t designed for this “new normal” that was thrust upon us.
7. Safety and Sanitization—Sanitization products and disinfectant cleaners experienced a shortage at first as new health procedures had to be implemented at manufacturing plants. Now, the market is actually a little inundated.

Anticipating Trends and Adapting to Change 

First Packaging Systems anticipated and adapted to these changing trends and kept our customers running as smoothly as possible. Some of the new trends are here to stay, and the impacts the pandemic has had on business aren’t likely to vanish overnight.

Our business has grown, and we are continuing to look for new people to join our team. Our company is equipped to meet the evolving demands and challenges our customers are facing.

So, what should we expect in 2021 and beyond? Next week on the FPS Blog, we will tackle that huge question and take a look ahead for what we expect the rest of this year to have in store for the packaging industry and the customers we service every day. 

If you are looking to streamline your packaging systems and improve your packaging process, contact First Packaging Systems today at (909) 613-5955 for a thorough review of your packaging facility. We can show you exactly what changes you should be making for better efficiency and profitability.