Kickstart: Packaging during a pandemic

You may remember that when coronavirus-related shutdowns began, the canned food shelves on your local supermarket got a little bare. Even now you may have problems finding your preferred brand. Personally, I couldn't find my favorite peanut butter on the shelves between March and July. (I know. First World problems.)

Here's the thing: That demand for jarred, bottled and canned foods isn't expected to end anytime soon. And that's very good business for suppliers of food packaging.

Silgan Holdings Inc. of Stamford, Conn., reported record sales across its plastic and metal containers as well as closures business areas for the second quarter of 2020.

Volume demand for plastic containers was up 14 percent for Silgan and metal container volumes rose by 15 percent. Net sales numbers also were up for both units.

Why? Demand from health and hygiene products in plastics, for one, but mostly home cooking.

"It seems clear that consumption pattern is [changing]. We're eating at home more," Adam Greenlee, president and chief operating officer, said during a quarterly call with analysts on July 22. "It was always restaurants that were our main competition. This is a fundamental shift. … We think there will be a more sustained trend for home consumption."

On the flip side, Coca-Cola Co. has seen its sales slide as bars and restaurants shut down, leading to what CEO James Quincey called the "toughest and most complex quarter in Coca-Cola history" during the Atlanta-based company's quarterly report on July 21.

As our sister publiction Ad Age writes, the global soft drink giant saw net revenue fall 28 percent in the quarter. So to compensate, Coke is cutting back. Executives blamed the pandemic, which has forced the closure of bars, restaurants and other so-called “away from home” channels.

"We are shifting to prioritize fewer but bigger and stronger brands," including "exiting some zombie brands," he said.

Of the company's roughly 400 master brands, "more than half are single-country brands with little to no scale," accounting for just 2 percent of total company revenues, he said.

Coke isn't alone. Mondelez International, the snack food company that makes Oreo cookies, says it will eliminate a quarter of its product varieties. General Mills reduced the number of Progresso soups it sold during the pandemic, and Jon Nudi, president of the company's North America retail business, said on a July 1 conference call that some of them probably won't come back.

Of course packaging demand isn't just about food.

The website slate.com writes that sanitizing wipes have remained in short supply throughout the pandemic, in part because companies are having problems accessing packaging.

"The private-label wet wipes manufacturer Athea Laboratories has been rethinking the way it does packaging, placing its product in a wider variety of canister sizes based on what's in stock from the packaging supplier in order to yield higher volumes," Slate reporter Aaron Mak wrote.

Customers are also giving up on having a specific color for a cap for brand identity.

"Now they're just happy with white, because that's what we can get," John Patton, executive vice president of sales and marketing, told Mak.