Prior to the pandemic, consumers around the world were focused on sustainability; reuse and recyclables, organic and natural food products, to do their part in managing the effects of climate change. Millennials led the charge by voting with their wallets, challenging retailers and suppliers to provide sustainable products and packaging solutions. Businesses were stepping up in more significant ways as they hired sustainability managers and built teams to direct their initiatives and sustainability agendas to fight the impact of globalization on the environment. There was considerable momentum for businesses to increase investments into sustainable product innovation, recyclable packaging alternatives, circular supply chains and responsible sourcing solutions to address consumer demands. Businesses anted up with aggressive sustainability platforms to strengthen their purpose and to support the United Nations, The Consumer Goods Forum, and other NGOs in working for a sustainable future.
When COVID-19 arrived, it brought an unusual and unprecedented shift in the way that consumers and businesses seemingly deprioritized sustainability. As the threat of infection swept across the world, consumer patterns shifted to essential goods and personal safety. At the same time, economic declines and unemployment pushed consumers to tighten purse strings. Retailers and suppliers were forced to respond by creating experiences that supported their associates and consumers to put health and safety first. This spurred a “pandemic use” of plastics and a lack of diligence in recycling that made environmentalists shudder at the years of work put against building the narrative with consumers and fighting plastic pollution to limit single-use and other plastic waste. The International Solid Waste Association, which represents recycling organizations in over 100 countries, indicates that America alone has seen an estimated 250-300% increase in the consumption of single-use plastic since the onset of the pandemic. While the majority of this is due to the increase in necessary PPE, single-use plastic bags, containers and utensils for take-out and packaged produce are also culprits. Additionally, the rise in e-commerce purchases has increased the amount of non-recyclable plastics to secure packages for shipping and delivery. If that is not enough, the pandemic also caused a crash in oil prices, which made the cost of producing plastics come down, incentivizing companies to purchase inexpensive plastics instead of investing in recyclable alternatives.
As the pandemic runs its course, many environmental groups are grasping at lost opportunities. They are working to maintain the level of momentum that was in place pre-COVID as the current world economy sees a blip in sustainability progress made in this area. But are their worries grounded? What is the outlook for sustainability? Have consumers really fallen off the proverbial wagon in favour of products that do not support sustainability? Are retailers and suppliers exploiting cheaper alternatives, and turning back their focus to old ways of generating excess waste, forgetting about the importance of sustainability as it relates to a cleaner and better earth? At first glance, it may look this way, but the pandemic has created a change movement that is imparting more aggressive views on sustainability that will likely continue to shape the future. While some environmentalists saw doom and gloom because of excessive plastics use and other gaps across fragile economies, others discovered a silver lining in the darkness shrouding the world as COVID spread. Carbon emissions have decreased, and air pollution levels are down. In Bogotá, Colombia, for example, air pollution decreased by 68% in April and 61% in Lima, Peru. Electricity use was also down by 6%. Wuhan, Delhi, Madrid, Los Angeles, and many other cities globally also logged massive reductions in harmful air pollutants. Due to these exceptional circumstances, some governments are taking the opportunity to advance sustainability agendas in their regions to further impact local environments. Similarly, businesses, both local and global, are joining forces with them (e.g. Natura, Coca-Cola, Tetrapak, who have all donated to recycling efforts in Chile).
In efforts to further leverage opportunities to future proof their businesses and the global impacts of climate change, a group of 155 global and local companies from 34 sectors, across 33 countries have signed a statement urging governments globally to align their COVID aid and recovery efforts with the latest climate science. These companies also committed to using science-based metrics to accelerate the transition to a green or zero-carbon economy as a part of this initiative. Signed in mid-May, this was the largest UN-backed CEO led initiative ever in driving change in support of climate science. Henkel CEO Carsten Knobel said, “Now, we need to invest in innovation, scale up the solutions we already have and work with our partners along the value chain towards climate-neutrality. To achieve that, we have set ourselves ambitious, science-based targets”.
As this initiative was secured, suppliers and retailers’ statements have created a domino effect around the world. Examples of their commitments and partnerships in support of sustainability have flooded the news in recent weeks as businesses work together to help reshape broken economies and strengthen efforts to create a better and greener world.
P&G’s Gillette announced a partnership with CVS pharmacies, Terracyle (innovative waste management company) and Fisher House Foundation (Veteran support organization) on a razor and packaging recycling program.
A.S. Watson Group pledged to reduce its plastic waste and support the use of sustainable palm oil.
General Mills launched a 3-year regenerative dairy pilot in partnership with Foremost Farms (dairy cooperative) and Understanding Ag (an agricultural consultant).
Mondelēz announced a packaging partnership with Philadelphia Packaging to utilize recyclable plastic containers in the European cream cheese market.
Amazon announces $2 billion climate pledge fund to invest in companies building products, services, and technologies to decarbonize the economy and protect the planet.
Fonterra deployed a dairy payment program for New Zealand farmers who meet co-op set sustainable targets.
Dole is seeking partnerships with start-ups and innovators to carry out its six brand promises around sustainability as part of its ‘Sunshine For All’ campaign.
Coles Australia announced grants to 12 small and medium-sized enterprises in support of sustainability and reduction of bush fires.
Diageo announced that their iconic Seagram’s 7 bottles will be made from recycled plastics (PET).
SC Johnson announced a new Mr. Muscle bottle made from 100% ocean-bound plastic through their global partnership with Plastic Bank. The Plastic Bank will support the opening of 509 plastic collection points in several countries across Indonesia, the Philippines, Thailand, Vietnam, and Brazil.
Walmart’s sustainability efforts take to the seas with MSC-certified sustainable private brand canned Tuna.
Unilever announced a new set of climate goals and will put carbon labels on all 70,000 of its products.
Allvale gazpacho, a PepsiCo brand opened a sustainable plant for production in Murcia, Spain. The plant will operate more efficiently by reducing water consumption by 30% and energy consumption by 20%.
The pandemic shed light on the interconnectedness of the world and exposed the fragility of our systems and processes. Gaps in the supply chain meant essential goods were not readily available to consumers. In other cases, a glut of some resources were wasted due to prohibitive cost in distribution or an inability to get them to the market quickly enough. However, it seems exposure to the world’s vulnerabilities has created a movement toward a new level of sustainability that has fueled a ground swell of partnerships between governments and business partners, suppliers and retailers, packaging companies, non-profits, and others to where it is certain that sustainability has not been forgotten.
Consumers continue to seek sustainable claims and packaging options. Research conducted by FMCG Gurus, a market research firm, indicates that 60% of global respondents polled during the pandemic say they are more concerned about the environment than before and 42% indicate they are more likely to maintain a sustainable lifestyle due to health and wellness concerns post-COVID. While more attuned to lower cost options, consumer voices suggest that they will continue to challenge retailers and suppliers to make cost-effective, sustainable product and packaging options available to them. This will only be possible if businesses work together to align their strategic agendas around sustainability and funnel them throughout their organizations.
Our research shows that while sustainability continues to grow in importance around the world, there is a disconnect between purpose and sales when it comes to sustainability. In order to drive progress on sustainability, a commitment from partnering stakeholders is required. Fostering the right behaviours at a commercial level will empower sustainable thinking; the prioritization of healthy and sustainable product offerings and innovation at competitive prices, promotion of responsible marketing practices, leveraging sustainable sourcing opportunities and more.
In recent months, many retailers have taken measures to adapt to the new situation and to make shopping easier for their customers. Supermarket groups Auchan, Carrefour and Kaufland, have all introduced bundled packages containing the most essential products such as flour, rice, milk, tea, and sugar. Biedronka, the largest retail network in Poland, has established cooperation with the Glovo mobile application for ordering food for delivery to an address indicated.
The pandemic also confirmed and accelerated previously observed trends in the CPG industry, such as paying more attention to sustainable development and the need to build closer customer relations and collaborative product development. The importance of balancing sales in e-commerce and stationary channels has also been reinforced. Some retailers that had not yet developed e-commerce capabilities have been forced by extraordinary circumstances to take immediate action in this area.
Overall, the need to take a more flexible approach to business is becoming more and more relevant. Some of the largest chains in Poland have decided to temporarily switch to a 24-hour system in the largest cities, to minimize the risk of stores overflowing during peak hours and reduce the risk of virus transmission between customers.
Temporary difficulties with supply chain deliveries, caused mainly by the closure of a large portion of border crossings, drew attention to too much dependence on foreign production. This has given rise to topics related to economic patriotism and the need to transfer more production into Poland to avoid similar situations in the future.
In recent months, a growing number of CSR actions were observed within the Polish market. Biedronka donated PLN 10 million to support centers taking care of the elderly. Żabka, a convenience chain, donated PLN 4.5 million to the Ministry of Health and decided to sell masks below market price. Maspex, a beverages and food producer, has donated over a million products to infectious disease hospitals.
One trend that has emerged in recent months is a preference for quality over price. People are choosing more durable products that will last longer. In turn, consumers are making fewer shopping trips but are purchasing more per trip as they look to accumulate stock. As consumers prefer to be in the stores for as short a time as possible, more and more stores are stopping to stock low-volume selling products. Having a wide assortment of products in a given category has ceased to be an advantage.
In recent months the e-commerce sector, which was already growing before the pandemic, has been developing more dynamically. This has led to the creation of new online stores as well as the transfer of activities to sales platforms by traditional stores. Before the pandemic, different studies estimated that between 55% and 62% of internet users made purchases online. This percentage, according to the Polish Economic Institute, increased during the period of social distancing restrictions by about 11% (i.e. to around 70%). This points to the fact that many stores have adapted or will have to adapt to the current market situation by implementing a multi-channel sales model. Research also reveals an almost 15% increase in the number of online stores registered on one of the most popular platforms in Poland in the first half of 2021.
The World Bank, in its June GDP forecast, is predicting a 4.2% recession at the end of the year, making it the worst year for the Polish economy since 1991, when the last recession in Poland was observed. The dramatic downturn is primarily due to a decline in retail sales, which is a driving force behind the Polish economy. According to calculations of the Central Statistical Office, retail sales in April declined by 22.9% YOY.
The Polish government had opted for a fairly radical strategy in fighting the coronavirus, having closed all shopping centers for almost two months. While closures did not extend to grocery stores, drugstores and pharmacies located within the malls, it had a very negative impact on their turnover as the overall number of visitors to shopping malls decreased significantly during this period. At the same time, for all stores that remained open, restrictions were placed on the number of people served.
Despite the recent increase in COVID-19 incidences in Poland (a record number of 599 new infections were recorded on Monday, June 8), the Minister of Health categorically ruled out the possibility of a complete, total lockdown of the economy.
From the point of view of both manufacturers and retailers, the presidential election carries a significant risk related to potential tax increases. The coronavirus pandemic has significantly reduced state budget revenues at the same time as the current government continues to expand social programs. Analysts say that VAT revenues dropped by more than 20% in April 2020 compared with April 2019. The re-election of the current president will probably mean the continuation of the current economic program, which with a high degree of probability, will mean further tax increases that may affect both large commercial networks and producers.
@Walgreens and @VillageMD to Open 500 to 700 Full-Service Doctor Offices within Next Five Years in a Major Industry First #BetterTogether #HealthcareHeroesRead More
@CocaColaCo India partners with Common Services Centers to list its products on CSC's Grameen eStore platform to enable the availability of affordable, essential hydration to rural communities through Village Level Entrepreneurs #BetterTogetherRead More
An excellent sustainable step forward! @Beiersdorf_AG and @WernerMertz develop a standard concept for cosmetic packaging made of old plastic #BetterTogether #Sustainability https://t.co/LRMlINdfddRead More
@KraftHeinzCo and DKSH expand their strategic partnership to Malaysia; evidence of a strong and fruitful partnership! #BetterTogether #FMCGRead More
@GSK to develop plant-based COVID-19 vaccine with Canada's @medicagoinc #CovidRecovery #BetterTogetherRead More
Coca-Cola India & United Way Mumbai initiate PPE and hygiene aid kit distribution to the frontline warriors in Karnataka during COVID-19 pandemic @CocaColaCo @UnitedWay #HealthcareHeroes #BetterTogetherRead More
Bravo! @discoverRB supports vulnerable communities around Berkshire with charitable partners as part of its Fight for Access Fund to help those most vulnerable and affected by the #COVID19 pandemic #BetterTogetherRead More
There are no reviews yet. Be the first one to write one.