The Fast Moving Consumer Goods (FMCG) sector has witnessed considerable changes and advancements over the years. The behavioral pattern of the consumers has changed expansively. Fast moving consumer goods are the products that are quick-selling and are priced relatively low. These products have a short shelf life and are mostly perishable. The demand for FMCGs is increasing at a rapid rate, which will influence the overall growth trajectory.
The COVID-19 pandemic has changed the growth projections of many sectors and businesses around the world. The FMCG sector is no exception. The growing prevalence of the virus forced many countries to impose strict lockdowns around the globe. This aspect led to tremendous losses. The FMCG sector was least-affected as compared to other sectors. Many sectors were exempted from the lockdown restrictions. Although the FMCG sector was disrupted due to supply chain disruptions and logistics problems, the loss was manageable.
The FMCG sector observed a slowdown in the consumption pattern in the first month of the COVID-19 lockdown but due to the spurt in demand for many products under this category, it quickly regained traction. Thus, these factors have a prominent impact on the growth of the FMCG sector. The food and beverage category observed the foremost growth across the sector. The lockdown exemptions assured smooth running of the production cycle under the food and beverage sector. Furthermore, the players in the food and beverage sector focused on expanding their production facilities to meet the overwhelming demand.
The healthcare sector was not behind in terms of growth. Sanitizers, disinfectants, and other hygiene-related products witnessed sudden uptick in the sales due to the expanding demand. This factor served as a prominent growth accelerator for the FMCG sector.
The COVID-19 pandemic has reshaped the megatrends of numerous industries around the world. The FMCG sector is one of them. These trends will have long-term and short-term implications. Here are some more details about the different sectors under the FMCG sector.
Food and Beverage Industry
The food and beverage industry was already at its peak but with the advent of the pandemic, the demand for food products and beverages observed a sudden demand. People started stockpiling on food products and drinks fearing the implications of the lockdown. The duration of the pandemic lockdown restrictions were also uncertain. Hence, the sudden demand led to an increase in the production capacities. These factors boosted the packaging demand on a large scale.
With the rising awareness among the consumers about the harmful effects of toxic packaging, the demand for sustainable and smart packaging is increasing at a rapid pace. Advanced packaging technologies are being used for developing plastics that are both sustainable and useful. The consumers of FMCG products prefer items having sustainable packaging. Manufacturers in the FMCG sector have not abandoned packaging sustainability and are committed to achieve high recyclability goals. These factors bode well for the growth of the FMCG sector.
Smart plant-based packaging may also gain tremendous demand even during the pandemic. During a time when hygiene is considered as an important indicator of a good food product or beverage, smart plant-based packaging can work wonders. This packaging type nowadays comes with sensors that inform the consumers about the food sourcing details, the temperature, and pH levels.
Delivery of food products has also increased considerably during the pandemic. This is where a good packaging type comes into picture. Smart packaging is the new norm across the packaging industry. Advanced packaging technologies like plant-based bioplastic food packaging helps in expanding the shelf life of the food products and also assures efficient transport to the desired consumer without any damage. This factor will play a vital role in increasing the demand for various packaging types during the forecast period.
Immense demand is being observed across the healthcare sector during the COVID-19 pandemic. The demand for medicines, devices, and other items across the healthcare sector observed a sudden spike due to the advent of the pandemic. The pharmaceutical industry has been observing expansive demand for medicines like tocilizumab. These factors have proved to be growth generators for the FMCG sector in the healthcare sector.
The packaging demand for these medicines has expanded at a rapid pace during the pandemic. Various countries sent pandemic assistance to many developing economies across the first and second COVID-19 wave. This aspect boosted the demand for smart medication packaging to a certain extent which proved to be a game-changer.
Despite of the fact that the demand for smart medication packaging has increased, some factors are ruining the growth prospects. The shutdown of many industries and the disruptions in terms of supply chain has led to considerable losses. Even if the medical and healthcare sector was exempted from the lockdown restrictions, the packaging sector was not spared. Numerous packaging production facilities were closed and this fact led to exceptional damages. The rising demand for packaging was inversely proportional to the production of the packaging, eventually having a large influence on the growth of the FMCG sector.
The packaging for food and beverages met with the same fate during the lockdown period. The food and beverage products were left out from the restriction but the packaging industry was affected. The relaxations in lockdown provided by numerous countries helped the packaging industry regain growth. The players in the FMCG packaging sector focused more on expanding their production capacities which served as a prominent growth factor. The expansion of the production capacities led to immense growth. All these aspects will serve as growth-churners for the FMCG packaging sector and will assist in deciding the growth trajectory.
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