COVID-19 Economic Impact Tracker

Freedonia economists and analysts consider the effect of the latest coronavirus.

COVID-19 Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights about the impacts of the COVID-19 coronavirus. This page features ongoing updates.

For our most recent take on the economic impact of COVID-19 on the US & Global economies please see: COVID-19 US Economic Impact Update and COVID-19 Global Economic Impact Update.

Knowledge Center Subscribers can access the US and Global reports for free as part of their subscription.

What Will Businesses Look Like on the Other Side of the COVID-19 Pandemic?

June 5, 2020 - It’s important to keep in mind that the effects of the COVID-19 pandemic will not just be on the demand side (e.g., what do people want? what can they afford?) of global markets. Additionally, the effect of the pandemic on the supply side of industries will not be limited to supply chains.

Companies are widely rethinking what they should be doing – what services to provide and what products to make – and what they don't need to be doing. These decisions are being made both by choice and by circumstance, but many businesses will emerge from the crisis following different structures and models than the ones they relied on before.

For instance, General Motors’ CEO Mary Barra noted recently that the company is carefully going through each line item of expenses and seeking greater efficiency in process. She noted that GM might permanently reduce the number of vehicle platforms and reduce their complexity, with an eye toward keeping only the versions that customers want most.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Home Pools: Consumers Trying to Stay Cool Face an Overheated Market

June 5, 2020 - One side effect of the COVID-19 pandemic is a reluctance among owners to open community pools and an equal reluctance among consumers to gather at the pools that are open. The same holds for beach areas, which are typically a respite for people seeking relief from the summer heat – some are open, some are closed, but some people worry about encountering the crowds.

So what’s an overheated person to do? Buy a pool.

As a result, all pool types – from in-ground to above ground to kiddie pools, whether molded vinyl or inflatable – are seeing high sales. For consumers without the space or the capital for an in-ground pool, prefabricated pools are the solution. However, many retailers are experiencing pool shortages – sold out stock and wait lists are widespread. Customers have turned to searching for stock in areas that have not yet seen their temperatures spike to summer levels.

According to a Summer 2019 Freedonia National Online Consumer Survey, roughly 25% of respondents reported having a pool or spa at home and a similar number reported having access to a pool or spa maintained by a private neighborhood association or apartment/condominium complex. Therefore, there remains a large segment of the population that might be seeking private water recreation options this summer as access to public and community options is limited or slow to open.

For more information, see The Freedonia Group’s report on Global Pools & Spas. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Las Vegas Casinos Have Reopened, Providing Hints for Adapting Other Tourist Destinations & High Traffic Areas

June 5, 2020 - On June 4, Las Vegas casinos reopened to a surge of traffic on a weekday that rivaled peak weekend crowds. Before reopening, casinos are required to submit their plans for hygiene and social distancing measures to the Nevada Gaming Control Board.

Here are some elements of the roadmap forward as these facilities adapt to a new COVID-19 reality while accommodating large crowds:

  • Masks – All employees wear masks and/or face shields. While some casinos require all patrons to wear masks, others limit mask requirements to roulette tables and other spaces where shields are not feasible.
  • Temperature Checks – Some facilities check for fever among all visitors, while others only do so for guests checking in to the hotel.
  • Plexiglas Shields & Dividers – These are being installed check-in and other customer service counters as well as at some game tables.
  • Hygiene – Handwashing stations and hand sanitizer dispensers have been placed on gaming floors and other high-traffic spaces.
  • Physical Distancing – Decals on floors, removing some pool chairs and other seating, and putting every other slot machine out of service has been done to promote improved guest spacing.
  • Technology – Hotels are encouraging mobile check-in and the use of keyless, contact-free mobile credentialing for room access.
  • Foodservice – Restaurants are encouraging mobile ordering and repositioning bartenders’ drink making stations apart from guest seating.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Disposable Masks & Respirators, Global Medical Face Shields, and an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Specific Freedonia Focus reports include Gambling, Lodging Services, and Amusement Parks. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Automation: Our Ticket to Living With the Possibility of Endemic COVID-19

May 29, 2020 - The conversation is shifting to how do we live with COVID-19, as more experts believe it will become endemic.

Touchless technologies and automation will likely be among the things key to successful reopening. Opportunities exist in:

  • Touchless plumbing – no-touch faucets, toilet flushes, soap dispenser, hand dryers, towel dispensers
  • Automatic doors – moving beyond grocery store and big-box entrances to office entrances and public restrooms
  • Keyless/touchless entry – rise of facial recognition (a contact-free biometric system) for allowing access
  • Contactless payment systems – online ordering, even for in-store or pick-up purchases, and rise of mobile payment options (e.g., Apple Pay, Paypal, Venmo)
  • Automated manufacturing – enables improved physical distancing among workers and makes reshoring strategic industries more cost effective

For more information, see The Freedonia Group’s coverage of plumbing products,windows and doors, and other construction and building products; as well as security reports and info about payments cards and services from our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

6 Trends Altered Because of the Coronavirus Pandemic

May 29, 2020 

2019: The sharing economy is on the rise, particularly for transportation.

2020: Ownership is king; no one wants to share.

2019: Tariffs are causing companies to rethink their supply chains.

2020: Pandemic closures and trade restrictions are accelerating that trend.

2019: Innovation happens among smaller, more nimble companies.

2020: The big get bigger, as they are the ones with resources to ride the recession out, purchase from troubled competitors, or finance R&D operations.

2019: Online grocery shopping is a niche.

2020: Online ordering and curbside pick-up are considered necessary parts of doing business.

2019: One-day or same-day delivery is expected for e-commerce orders.

2020: Deliveries of non-necessities might take a week or more.

2019: Single-use plastic bags are out; they generate a lot of waste and are a litter problem.

2020: Single-use plastic bags are in; they are seen as more hygienic than reusable bags, which are brought from home and rarely cleaned.

For more information, see The Freedonia Group’s coverage of global e-commerce, retail bags, packaging industry, machinery and equipment, as well as our sister publisher Packaged Facts’ reports on Online Grocery Shopping, The Amazon Food Shopper, Amazon Strategies and the Amazon Shopper, and Global Food E-Commerce. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

COVID-19 Pandemic to Provide Lasting Bump to Online & DIY Sales For Major Home Improvement Retailers

May 29, 2020 - Among the recent earnings call transcripts of Home Depot and Lowe’s were the following points of interest:

  • strong growth in online sales
  • increasing sales to DIY consumers

This was not surprising, as millions of US consumers adhered to various stay-at-home orders promulgated by government officials and avoided going out. Furthermore, many consumers opted to use this time spent at home to complete various renovation and repair projects – from painting rooms to installing decks.

While the COVID-19 pandemic was the primary driver of these sales, there’s nothing to suggest that this will be a one-time occurrence. Online sales growth will continue to climb as both homeowners and construction professionals use online platforms to easily and more safely order the building materials they need. Like many grocery stores, Home Depot and Lowe’s both offer curbside pickup, a feature that saves time for busy contractors that is better spent on completing jobs.

DIY construction activity is also expected to rise going forward, even without the spectre of the coronavirus hanging over homeowners’ heads. In addition providing a sense of achievement to those who successfully complete projects, even minor improvements and repairs can enhance the value, efficiency, and beauty of a residence. Indeed, homeowners who successfully accomplish one or more smaller projects while sheltering in place may feel like trying a larger or more ambitious project, such as installing flooring, cabinets, or even a new kitchen or bathroom.

For more information, see The Freedonia Group’s collection of research and analysis on construction and building product industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Trio of Articles Indicate Continuing Uncertainties in Home Remodeling Market

May 29, 2020 - Three articles – published within days of each other – each had a slightly different take on the effects of the COVID-19 pandemic is having on the home remodeling market:

  • One article indicated that dealers and contractors in the kitchen and bathroom remodeling industry were seeing the effects of the coronavirus pandemic lessen as more consumers expressed an interest in these projects.
  • Another article stated that home renovation activity fell sharply between March and April of 2020 as consumers cancelled many projects in the wake of the coronavirus outbreak.
  • Finally, a report which that while many homeowners had put off home renovations because of the pandemic, they expected to undertake home repairs going forward.

The home remodeling market – as the above articles indicate – is in a great deal of flux right now. On the one hand, states are “re-opening” and consumer spending is increasing, and some of that will spill over into the construction market. Others, noting that unemployment and financial uncertainty remain high, expect only marginal improvement in the home improvement segment.

The Freedonia Group predicts that construction spending – including that of the home improvement market – will contract in 2020 but will post rebounds in 2021 and the years beyond as the economy improves and more consumers feel confident enough in their own finances to invest in their residences.

For more information, see The Freedonia Group’s collection of research and analysis on construction and building product industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Frozen Foods Are Hot Right Now… So Are Canned Foods

May 20, 2020 - There are a few key factors behind the rise in frozen and canned food sales:

  • Comfort Foods. 58% of respondents in the new Freedonia Group National Online Consumer Survey noted that they are buying more comfort foods because of the coronavirus pandemic.
  • Stocking Up. This is trend is largely done – as seen in the big decline in April grocery sales compared to those in March – but replenishing will continue as long as we’re eating primarily at home.
  • Easy Meal Prep. If, like me, you’re prepping family meals three times per day, you’re looking for quick options. 
  • Feeding Picky Kids. Parents are not interested in battling food choice right now, so they are offering more foods that they are confident their children will eat.

However, despite the general negative perception of frozen and canned foods as full of preservatives, salts, and other unhealthy ingredients, there are canned and frozen items that do not count as processed foods or that are minimally processed. Such products as frozen vegetables, frozen chicken breasts, canned beans, canned vegetables, canned fruit without syrup all do not automatically count as unhealthy eating simply because of their formats. They do provide short-cuts, but they aren’t necessarily unhealthy. These versions will just last longer than their fresh cousins. Canned versions are also shelf-stable, saving precious refrigerator space for other food items.

Fighting against the perception of canned and frozen foods as highly processed food is a distinction that packaged food companies will want to make when possible. Only 36% of respondents in The Freedonia Group proprietary survey noted that they were buying more processed food because of the coronavirus, and only 29% reported that they were reducing their purchases of fresh produce.

For more information, see The Freedonia Group’s coverage of the packaging industry and analysis of the food and beverage industry from our sister publisher, Packaged Facts.

Near Sourcing & Rebuilding Local Stockpiles of Critical PPEs Will Require Support

May 20, 2020 - Near sourcing is a trend that will change the supply chains for medical masks, critical personal protective equipment (PPE), and the materials needed to make them.

Governments and industry are seeing the value of following the model common in hygiene nonwovens markets, producing the nonwovens close to the converters and placing converters closer to where the masks and other critical PPE will be needed. This serves as a hedge against future pandemics or similar supply chain disruptions. 

As more companies adopt near sourcing tactics, they will place a certain amount of upward pressure on global average prices for these goods. More suppliers will set up production capacity in places like North America and Europe, which lack China’s cost advantages in economies of scale and low labor costs. A combination of strategies such as a push toward greater automation in production or government subsidies will be needed to support these higher-cost producers if near sourcing is to remain a priority.

Don & Low’s recent investment in meltblown production capacity in Forfars, Scotland, is one such example. The company reportedly received 80% of the cost to acquire and install the new line from the Scottish government. This capacity will make the company one of only a few companies in Europe that can make the material needed for respirator masks. The government saw value in having local capacity to produce PPE for healthcare and other frontline workers.

For more information, see The Freedonia Group’s coverage of the textile and nonwovens industries, including a new COVID-19 Impact Analysis report for Global Disposable Masks & Respirators.

COVID-19 Pandemic Plays Large Role in Driving Up Lumber Prices

May 20, 2020 - Much as drivers are seeing prices rise for gasoline, so too are construction professionals seeing price hikes for one of the key materials of their trade – lumber.

The COVID-19 pandemic has played a key role in causing this increase in pricing. Construction projects in many parts of the US were slowed as states adopted work rules – such as social distancing – that added to the time needed to complete jobs. In other states, nearly all construction was halted as governors declared much building activity to be nonessential. In consequence, a number of lumber producers have temporarily or permanently ceased operations, reducing lumber supplies as fewer homes were completed and renovation activity fell off.

At the same time, large numbers of US consumers suddenly found themselves at home for extended periods of time, providing ample opportunity to complete those tasks – including home repairs and maintenance. As indicated by the most recent data, building materials suppliers and distributors saw solid sales growth in April. While some of this was due to seasonality and construction professionals stockpiling materials for future use, sales were supported by homeowners engaging in DIY projects, such as building decks and fences, renovating rooms, and installing shelving.

Going forward, it is expected that lumber prices will continue to rise as housing starts rebound and consumers feel more confident in undertaking large-scale home improvements – such as kitchen and bathroom renovations – that have historically most often been done by professional contractors. However, the DIY segment will continue to play a role in building construction, which will further boost lumber pricing and lumber production going forward.

For more information, see The Freedonia Group’s collection of research and analysis on construction and building product industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

From Corrugated Packaging & Displays to Social Distancing Supports

May 19, 2020 - Smurfit Kappa has introduced its Safe Portfolio line of desk dividers, standing workspace dividers, retail screens, and signage to communicate safe spacing. These products are designed as alternatives to plastic dividers. Although not intended for extended use, these products feature a varnish coating so that they can be cleaned with alcohol-based cleaners.  

Key advantages of using corrugated materials include their low cost, light weight, and recyclability. The material also accepts printing for additional customization, including branding, safety information, or other instructions. Corrugated products are also able to be made with a high level of post-consumer or post-industrial recycled content, boosting the environmental profile of items made from it. Studies also indicate that COVID-19 has a shorter lifespan on corrugated compared to smoother materials such as plastic and steel.

Companies around the world and across industries are looking for ways to pivot into the current challenge, seeking opportunities to repurpose what they  do to solve these new problems. Here is a company that is literally thinking outside the box.

For more information, see The Freedonia Group’s coverage of the packaging industry, including Global Corrugated Boxes (and a companion COVID-19 Economic Impact Report on the industry) and US Retail-Ready Packaging, as well as COVID-19 Impact Analysis reports on safety products such as Global Disposable Masks & Respirators, Global Disposable Medical Gloves, and Global Industrial & Institutional (I&I) Disinfectants & Sanitizers.

Lack of Funding for Affordable Housing to Support Demand for Prefabricated Housing

May 19, 2020 - Among the effects of the COVID-19 pandemic on the US housing market is an expected drop in multifamily housing construction, particularly of apartment and condominium complexes in the nation’s urban centers due to such factors as:

  • a slowdown or stoppage in construction as ordered by state governors and local mayors
  • state and local governments – facing precipitous declines in tax revenues – will reduce funding on a wide range of projects, including the construction of affordable housing
  • wariness of committing to large-scale projects among construction firms due to economic uncertainly and concerns about their own financial positions

This dropoff in multifamily housing construction could be especially severe for those active in building housing units for low- and middle-income families. As the US already faces a shortage of affording housing, any fallback in the building of these units could be especially dire.

However, one potential bright spot is the nation’s prefabricated housing industry, which can provide the moderately priced housing units increasingly in short supply across the US. These residences include:

  • manufactured homes that increasingly offer the designs and amenities seen in traditional site-built residences
  • modular housing units that can be used to more rapidly and inexpensively erect apartment buildings in US cities
  • accessory dwelling units – “tiny homes” – which can solve housing shortages by providing small residences that can be installed nearly anywhere

For more information about the US prefabricated housing industry, see the Freedonia Group’s recently published study, Prefabricated Housing.

Fresh Consumer Insights on Shopping Habits During the COVID-19 Pandemic

May 18, 2020 - According to data from The Freedonia Group’s newest National Online Consumer Survey conducted in April-May 2020, the coronavirus pandemic continues to impact US shopping habits.

58% of consumers report that the coronavirus pandemic has negatively impacted their ability to buy non-essentials. Consumers are still seeing many retail outlets closed. and delivery of non-essential items is not moving as quickly as it was before the pandemic. Retailers can respond by improving their online processes and offering local delivery using their own staff.

74% say that they are minimizing their time spent shopping or browsing in stores. Consumers are concerned about exposing themselves and their families to the virus or are frustrated by lines and changes in procedures, so they are interested in being efficient with their time in brick-and-mortar stores. Retailers can respond by clearly labeling aisles, providing disposable maps to new shoppers, and keeping enough staff on hand to ensure that lines move swiftly.

49% say they are spending more time finding deals and specials. Unemployment filings are still rising, and the national unemployment rate rose to 14.7% in April, so many consumers are feeling economically insecure even if their personal work situation is stable. Retailers can respond with clearly labeled discounts, online coupons, and other benefits for loyalty card holders, and – in an era of rising food prices – note where prices are being held steady.

For more information, see The Freedonia Group’s coverage of the consumer goods and packaging industries as well as our sister publisher Package Facts’ coverage of various consumer industries, including pet products and services, food and beverages, and payment cards and related services.

Food Retail Sales Were STILL Way Up In April Compared to 2019…But the Major Stock-Up Buying From March Has Eased

May 18, 2020 - The most recent release of monthly sales data from the US Census Bureau reported that unadjusted retail sales at food and beverage stores posted a 13.4% increase for the first four months of 2020 compared to the same period in 2019. While April 2020 sales were down 12.8% from March’s historically high levels, it was still 14.5% above comparable sales in April 2019.

This reflects a few main factors:

  • Consumers are largely done with the major stockpiling of their pantries, freezers, and refrigerators ahead of stay-at-home orders and are now more targeted in their stockpiling (e.g., of products such as fresh meat and canned/dry beans which have at times had limited availability).
  • Children continue to dine at home as most schools and related cafeterias remain closed.
  • While the percentage of consumer food spending that has shifted from eating out to eating at home remains high, some consumers increased their spending on carryout and delivery foodservice in April as they either got tired of cooking or became more likely to venture out.
  • The US Labor Department reported that food prices jumped 2.6% from March to April, a spike that was widespread but sharpest in meats, poultry, fish, and eggs followed by cereals and bakery products.

Expect May food retail sales figures to remain above same-month 2019 patterns but likely not to the same degree as April 2020. Dine-in operations have begun to open in many states, and more workers are returning to their primary workplace. However, a large number of consumers are still feeling economically uncertain or working at home, thus still limiting away-from-home food purchases.

Carryout and delivery foodservice spending will continue to rise as restaurants offer delivery deals and continue to improve their carryout and delivery procedures with expanded online ordering and contact-free payments, carryout, or delivery.

For more information, see The Freedonia Group’s coverage of the packaging industry as well as our sister publisher Package Facts’ coverage of the food and beverage industry.

Contraction in Number of Retail Outlets to Affect Building Construction Market

May 18, 2020 - A recent article in the Wall Street Journal pointed out that thousands of retails stores are expected to close over the next five years as shoppers not only buy less, but – when they buy – increasingly do so online, for reasons of not only safety but also convenience. Among the many effects of this shift to online shopping is its effect on the building construction market.

The closure of so many stores over the next few years will affect retail construction going forward – with so many empty storefronts, builders and investors will be reluctant to embark upon new projects, as this glut of retail space will offer prospective store owners plenty of options. This decline in retail construction spending will affect demand for a wide range of building materials, from the basics (e.g., structural products, plumbing fixtures and fittings, flooring, lighting, and others) to more retail-specific items such as store fixtures (both cabinets and shelving) and the related casework for displays and cashier stations.

However, there will exist pockets of opportunities for the construction market. Eventually, a number of these retail sites will have occupants, be they retail stores, restaurants (such as quick-serve or pop-up kitchens), or even multifamily housing units. As these retail stores are refurbished and refitted, this will support demand for a wide range of building materials.

For more information, see The Freedonia Group’s collection of research and analysis on construction and building product industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Will High COVID-19 Infection Rates at Some Skilled Nursing Locations Have Long-Term Generational Effects on Perception of the Industry?

May 18, 2020 - A recent article in the Wall Street Journal noted that the senior housing industry has had to make a number of adjustments to living, working procedures, and marketing efforts due to the COVID-19 pandemic. Widely reported news of the spread of illness in senior housing during this pandemic has led to a number of older adults rethinking their plans to live in assisted living centers if instead they are able to stay home and have supplemental care from visiting nursing aides and/or family members. However, will the experience of this pandemic – and the expectation of future pandemics – linger with younger generations and leave them with a similar preference for aging at home?

While older adults have generally shown a strong preference for aging in place, that preference hasn’t been as enthusiastic among younger generations who have recently been more open to community living as they age. According to data from the September 2017 edition of The Freedonia Group National Online Consumer Survey, 62% of respondents 65 and older strongly agreed with the statement “I prefer to age in place”. In contrast, only 45% of millennials felt that strongly. In fact, 20% of millennials neither agreed or disagreed with the statement, indicating an openness to the option as their awareness is more likely to include active senior living centers that are more attractive and home-like compared to the senior care facilities available to past generations.

The industry and governmental regulators must take significant steps to reassure younger people that elder care communities are safe and good options for care, as younger people will help older family members make decision about where to live as they age and will ultimately decide for themselves one day as well.

For more information, see The Freedonia Group’s report on the elder care industry and other consumer topics, as well as Global Disposable Masks & Respirators and Global Disposable Medical Gloves. Additional targeted research is available from Freedonia Custom Research.

Adaptation of Products that Promote Aging-in-Place to Increase Even After Pandemic Passes

May 18, 2020 - A recent article in the Wall Street Journal highlighted the challenges faced by the senior housing segment due to the COVID-19 pandemic. Many older US consumers and their families are concerned about the safety of such housing options, considering that many have seen COVID-19 outbreaks among residents and staff. Therefore, many are more seriously looking into how they can remain safely in their homes instead.

Older citizens have chosen to design their residences with senior-friendly features in order to “age-in-place” and delay or prevent the need to move to assisted living. Homes can incorporate a wide range of elements that facilitate aging-in-place, including:

  • walk-in bathtubs and showers with integrated seating and grab bars
  • toilets with elevated seats
  • sinks, showerheads, and toilets with “touchless” sensors that can be easily operated by those with arthritis or other issues
  • cabinets with doors that can be opened by simply pushing on them (instead of a pull or handle)
  • cabinets and countertops with integrated LED lighting
  • single-floor living and ramps instead of stairs (both inside and outside the home)

Going forward, builders and homeowners will continue to respond to this need by incorporating more of these features into residences. In addition to older homeowners opting to invest in remodeling their homes for aging-in-place, increasing numbers of other consumers will specify these products, as they not only enhance the convenience of their homes but also promote good hygiene, as such features as touchless faucets and cabinet doors minimize the risk of disease transmission.

For more information, see The Freedonia Group’s collection of research and analysis on the construction, building product, and elder care industries. Additional targeted research is available from Freedonia Custom Research.

What’s Next For the Disposable Mask Industry in 2020 & Beyond?

May 12, 2020 - The Freedonia Group recently finished an analysis of the global disposable mask market. Two of the many important questions answered in this report center on if there will be sufficient supply and if the pandemic will fundamentally change future mask demand.

Production of masks is skyrocketing. In normal years, masks are mostly manufactured by small to medium sized companies you’ve never heard of (with the notable exceptions of 3M and Honeywell, which operate in the critical N95 respirator market niche). In 2020, mask makers now include disparate firms such as GM, Boeing, Foxconn, Prada, Eddie Bauer, and Panasonic. However, their contributions are temporary, so the long-term availability of masks depends largely on China’s 9,000 or more mask companies ramping up production, supplemented by increased activity among other textile powerhouses in Asia. Requirements for 2020 will likely be met, especially if exacting production standards are not enforced.

Whether this extra supply will be satisfied with additional future sales or lead to product surplus and unused capacity will be determined by factors such as:

  • how quickly virus cases level out and hospitalizations decrease
  • when and how countries open up their economies and what mask requirements are in place both for businesses and consumers
  • what medical stockpiling of these products looks like following economies reopening
  • when a vaccine or drug treatment for COVID-19 becomes widely available
  • the introduction and use of competitive products or processes including mask sterilization and reusable masks

For more information, see The Freedonia Group’s coverage of Global Disposable Masks & Respirators, Global Disposable Medical Gloves, Global Filters, Global Nonwovens, and Global Disposable Medical Supplies. Additional targeted research is available from Freedonia Custom Research.

Why Are Disinfecting Wipes Still So Hard To Find?

May 12, 2020 - Prior to the coronavirus pandemic, disinfecting wipes weren’t a high priority repeat shopping item for most households. According to data from The Freedonia Group’s National Online Consumer Survey conducted in July-August 2019, only 38% of respondents reported buying surface cleaning wipes (disinfecting or otherwise) more than once in the previous 12 months.

However, with the onset of the coronavirus pandemic, disinfecting wipes became a particularly hot object. They are a convenient cleaning option at a time when many people find themselves cleaning surfaces at home or at work multiple times a day. According to data from The Freedonia Group’s newest National Online Consumer Survey conducted in April-May 2020, 62% of respondents reported buying surface cleaning wipes (disinfecting or otherwise) more than once in the previous 12 months.

This big shift in new consumer demand was on top of increased use by existing wipes users at home and heightened demand from places such as commercial businesses, factories, retail stores, hospitals, and eldercare facilities.

So why is it getting easier to find toilet paper and hand sanitizer, but not disinfecting wipes? The spike in use was bigger and the barriers to entry are higher.

In response to the increased demand, Clorox has been running more shifts, shifted production capacity to the basic versions, and reached out to third-party manufacturers. The company is also making investments in capacity expansions, presuming that demand will remain high in the longer term.

Reckitt Benckiser, which sells Lysol and Dettol disinfectant products, expanded capacity and concentrated production on core needed production.

With heightened demand expected to continue through this crisis period and beyond, other wipes manufacturers may develop products for consumer markets. For instance, firms such as NicePak, which do a lot of business in healthcare and contract cleaning markets, could make headway by sending similar products to the consumer market once supplies are steady in the markets they already serve.

For more information, see The Freedonia Group’s Wipes, Global Nonwovens, and Industrial & Institutional Cleaning Chemicals. Contact your sales representative or The Freedonia Group’s customer service for information on our upcoming special Industrial & Institutional Disinfectants & Sanitizers report. Additional targeted research is available from Freedonia Custom Research.

Ready-to-Sew Consumer Face Mask Kits Available Via a Partnership With Filtration & Textile Companies

May 8, 2020- Hollingsworth & Vose has partnered with Midwest Textiles to offer ready-to-sew face masks for consumer use. This kit includes a layer of Hollingsworth & Vose’s Nanoweb FM filtration media made of spunbonded nonwovens not used by medical personnel, so it has no negative impact on the industry’s ability to provide personal protective equipment for first responders. This filter media can be inserted into the pocket of a reusable mask or stitched into a disposable one.

This is one way for the market to provide supplies to consumers, who are often struggling to obtain what they need for their own protection and to comply with orders or recommendations to wear face coverings when away from home. Filter companies can use this as an opportunity to repurpose breathable filter media that might otherwise be used in other applications that are not in high demand in the current economic climate. Consumer protection needs are not as high as those of medical personnel because consumers are generally able to use social distancing measures to mitigate their risk.

For more information, see The Freedonia Group’s coverage of the Global Face Masks and Global Filters industry as well as Global Disposable Medical Supplies and US Disposable Medical Supplies.

Surface Disinfecting Wet Wipes Suppliers Seeking Certification of Efficacy Against Coronavirus

May 8, 2020 - Nice-Pak, a leading producer of private label wipes including varieties for surface disinfection applications, is working with Microbac, a testing laboratory, to determine if its products are effective specifically against SARS-CoV-2. Its sister company, PDI, which concentrates on the commercial and institutional sectors, is also submitting products to these tests.

Nice-Pak, which already has a number of products listed on the EPA’s list of disinfectants to use against SARS-CoV-2, will be among the first to get this certification.

This is an important angle, as Nielsen notes that the ability protect against germs and bacteria is a high priority for consumers. Consumers throughout the world are willing to pay more for homecare products that keep the family protected against germs/bacteria or that kill germs/bacteria in an effective way. Products that give consumers greater confidence will have a leg up on the competition.

For more information, see The Freedonia Group’s coverage of the Wipes and  Global Nonwovens industries.

North American Truck Sales Hit Unprecedented Lows

May 8, 2020 - A softening of truck orders in 2019 – which followed a record spike in 2018, when the strength of the US economy and changes to business taxes encouraged equipment investment – has now been compounded by the COVID-19 pandemic in 2020. While orders increased in January 2020, orders began to fall again in February until they unprecedented lows in April at just 4,000 vehicles, according to an article published by the Wall Street Journal. Most traditional markets for trucks have experienced severe turmoil since March, causing a dramatic decline in orders for the models needed to transport materials and goods.

The COVID 19 pandemic has caused weakness throughout much of the North American economy, and fewer trucks are needed on the road right now as there are fewer goods being produced and distributed. Even as states reopen manufacturing plants and employees return to work, the uncertainty regarding how long the economy will be depressed will likely reduce order rates in the coming months as well.

Further complicating matters, it is not clear how many existing orders for heavy trucks in North America will be cancelled in coming months as companies go out of business and others reduce production and delay plant openings.

While 2020 is shaping up to be a year or record lows, the North American heavy truck industry will increasingly look to 2021 and beyond for new opportunities as it weathers the COVID-19 pandemic.

For more information, see The Freedonia Group’s Global Diesel Engines and North American Medium- and Heavy-Duty Truck Aftermarket studies as well as our Medium- & Heavy-Duty Trucks & Buses: United States and Global Medium- & Heavy-Duty Trucks & Buses Freedonia Focus reports. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

US Flooring Market Cautiously Optimistic in Face of COVID-19

May 8, 2020 - US manufacturers of flooring are beginning to restart production and boost operations as a number of states loosen restrictions on commercial activity. Many flooring producers were optimistic about 2020 before the pandemic, as a strong housing market and a high level of consumer interest in home improvement projects was expected spur demand for flooring materials.

While the housing market is expected to see declines in 2020 due to the COVID-19 pandemic, the US flooring industry is still confident that sales – while not as high as were originally projected – will not fall dramatically. US flooring manufacturers are anticipating sales to be supported by factors such as:

  • the nation’s shortage of affordable housing – home builders will continue to erect new homes to meet demand for housing
  • remodeling interest among some homeowners – especially those sheltering in place for weeks and looking to improve the appearance or functionality of their homes
  • the continuing popularity of hard-surface flooring that can be installed by do-it-yourself consumers, such as luxury vinyl tile, decorative tile, and laminate and hardwood flooring
  • lessened competition from China, the expected continuation of tariffs are compounded by supply disruptions caused by the production limitations that followed stay-at-home orders in Q1 and early Q2

For more information about the US flooring industry industries, see The Freedonia Group’s studies on Global Flooring, Global Carpets & Rugs, and Global Hard-Surface Flooring, as well as its coverage of the Construction and Building Products industry.

Strong Home Prices to Provide Incentive to Home Builders to Maintain Production

May 8, 2020 - Consumers are increasingly getting used to higher prices for a number of products, such as toilet paper and meat, due to supply shortages. This recent Wall Street Journal article indicates that shoppers for a pricier product – a home – will also be confronted with rising prices for the same reason: a lack of homes on the market that are available to purchase.

This shortage of homes presents an opportunity to the nation’s homebuilders, many of whom have been buffeted by shutdowns (in some states) and worker safety requirements – such as social distancing and the need to more frequently sterilize equipment – that have added to the time and expense of homebuilding. While new homebuilding is expected to decline in 2020 – especially in the second quarter of the year – it is anticipated that this market will rebound in 2021 and beyond. Indeed, if home prices remain high, builders may ramp up production to maximize profitability – an especially important consideration for firms that saw sales declines in 2020.

For detailed information about the effects of the COVID-19 pandemic, see The Freedonia Group’s:

Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Survey Hints at Future Remodeling Projects Due to COVID-19 Pandemic

May 8, 2020 - The large majority of US consumers are spending much more time at home in light of shelter-in-place orders and stay-home recommendations. This, in turn, is causing many people to think about their living spaces. As more people are in the home for longer periods of time, homeowners are considering ways to improve their residences by adding space or enhancing convenience.

This recent study shows that many homeowners are thinking about the best ways to remodel to make their houses more suitable to their post-COVID-19 needs – while bowing to the realities of life during and after the pandemic. These home improvement projects can include:

  • additions or expansions to create more space
  • updating kitchens to accommodate families dining together more frequently or adding amenities that re-center the kitchen as the focal point of family life
  • adding bedrooms or bathrooms to enhance privacy and convenience for family members who may be living in a home temporarily (due to shelter-in-place orders) or permanently (due to job losses)
  • installing a home gym (many states have closed gyms and recreation centers)
  • installing more and larger windows to provide more natural light

While not all homeowners will undertake these “dream” projects, it is expected that some consumers – after several months of remaining at home – will decide that their homes will need an upgrade and will either plan for or embark on one (or more) home improvement projects. Whether performed as a DIY project or through the work of professional contractors, this uptick in home improvements will boost demand for a wide range of building and construction materials.

For detailed information about the effects of the COVID-19 pandemic, see The Freedonia Group’s:

Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Packaging Values: Sustainability vs. Hygiene?

May 4, 2020 - Plastic and single-use packaging, in general, hit its stride in part by suggesting that it was cleaner and more hygienic than paper or reusable options. However, as time has gone on, these benefits have taken a back seat to concerns about resource use and trash generation, which have caused many to question the dominance of single-use packaging.

With the onset of the COVID-19 pandemic, arguments for the superior hygiene benefits of single-use packaging are making a resurgence. This has been most notable  in the suspension of single-use bag bans in much of the US. For instance, California suspended the charge for single-use plastic retail bags for 60 days. Many retailers have reverted to single-use bags, arguing that bags brought from a consumer’s home may be contaminated with the COVID-19 virus and put their employees at risk.

However, California’s Division of Occupational Safety & Health recommends that stores ask consumers to bag their own purchases as a response to concerns about contaminated bags. This can be done either in a designated bagging space, if the store has one, or at their own cars.

Although there is a fair bit of debate about how long the virus lasts on various surfaces – including plastic bags, paper bags, and textile bags – most seem to agree that the biggest hygiene challenge to retailers is person-to-person contact. As such, wearing masks, using shields and touch-free payment systems, and frequent hand washing are still the best solutions to preventing spread.

The long-term challenge is what the renewed availability of free plastic shopping bags will do to consumer habits, which had begun tilting toward reusable bags following years of phase in of different regulations.

For more information, see The Freedonia Group’s catalog of packaging research, including Retail Bags, and Global Single-Use Plastic Packaging Regulations as well as research from our sister publisher, Packaged Facts, covering the food and beverage industry. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Packaging Values: Sustainability in a Shelter-in-Place World

May 4, 2020 - Consumers who stocked up their pantries to ahead of the stay-at-home orders or to reduce their shopping trips found themselves with more packaging than they normally have. Even consumers who have been trying to reduce their waste footprint are stocking their homes with canned food and food ensconced in layers of plastic and paperboard, waxed or otherwise. Households are also inundated with countless boxes from increased e-commerce deliveries.

Must sustainability be sacrificed to extended food shelf life?

Must sustainability fall victim to our need for delivery as we reduce in-person shopping?

Are these truly either/or situations?

Must consumers and packaged food companies choose between their sustainability values and the needs of our current situation in a world still largely sheltering in place?

There are answers to these questions. With some creativity and continued dedication to systemic change, packaging firms and consumer packaged goods companies can still answer both needs:

  • Amazon continues to move vendors toward frustration-free packaging and e-commerce ready packaging that can be shipped as-is and does not need to be placed inside another box or mailer.
  • Innovative types of film can be used to better protect the food inside.
  • Single-material packaging is better positioned for recyclability.

The problem for sustainably minded consumers is that their options aren’t as widespread as they should be and the available options are still too often priced for better off consumers.

A functioning waste infrastructure – including municipal composting facilities and recycling capacity that covers a more diverse array of materials and forms – is also needed. Such a public investment would pay off in reduced landfill and a more circular economy.

For more information, see The Freedonia Group’s catalog of packaging research, including Food & Beverage Packaging Innovation and Global E-Commerce Packaging, as well as our sister publisher Packaged Facts’ food and beverage industry research. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Sustainability: What Is the Long-Term Effect of this Pause on Greener Business Practices?

May 4, 2020 - Companies have pressed pause on  their greener business practices for a number of reasons. For instance, Starbucks eliminated its program that allowed customers to bring their own reusable cups for hygiene purposes, and General Motors ended its car sharing and long-term rental programs because many people have been sheltering at home rather than traveling or commuting.

Recessionary economic conditions have companies tightening their belts as revenue has been sharply reduced and uncertainty remains as to how long that will last. The challenge for companies – big and small – will be to spend strategically, where it is needed, to ensure that long-term goals are not side tracked. Executives such as General Electric’s CEO Larry Culp noted in an interview with CNBC, “We don’t want to spend one dollar more than we need to this year, all the while making sure we don’t shortchange the long term.”

Sustainability focused investor groups understand the complexity of the current situation but are continuing to watch and report on what companies are saying and doing with regard to their sustainability pledges.

It’s worth understanding that sustainability is still a business opportunity. If people come out of the crisis living and working differently (e.g., online school, increased online shopping, more work from home, video conferences over in-person business travel, virtual trade shows, greater concerns about complex international supply chains), how can businesses respond in a way that reduces waste and energy usage? Packaging and power supplies are significant costs in many businesses.

BP is one such company that is keeping its eye toward that future. BP Chief Executive Bernard Looney noted in a recent conference call that the long-term outlook for the company must be an ongoing turn toward renewable options. He said, “The pandemic I think only adds to the challenge for oil in the future.”

For more information, see The Freedonia Group’s extensive catalog of off-the-shelf research. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Once Promising Home Improvement Market Threatened by COVID-19 Pandemic

May 4, 2020 - 2020 was supposed to be a good year for the home improvement market as low unemployment, wage growth, and rising property values were set to encourage thousands of homeowners to undertake significant renovation projects – remodeling kitchens, adding bathrooms, replacing roofing or siding, or installing new flooring. Instead, the home improvement industry faces a period of decline due to the COVID-19 pandemic.

As indicated by a number of reports, home remodeling spending in the US expected to decline throughout the rest of 2020 and into the first part of 2021. While construction has been classified as an “essential” business by both the US Department of Homeland Security and by the majority of state governors across the US, the home remodeling industry will still face a number of challenges going forward that will limit sales opportunities, such as:

  • homeowners dealing with unemployment (even if temporarily) and thus unable to invest in home renovations
  • consumers more broadly concerned about their future economic well-being and thus putting off home improvement projects
  • homeowners unwilling to let people into their homes to make estimates due to concerns about spreading coronavirus
  • slowdowns in the pace of work due to social distancing on job sites and other mandates (such as those regarding cleaning equipment) that add to the time needed to complete a job
  • potential shortages of building materials as suppliers adjust operations in the face of reduced demand
  • delays in the shipment of ordered materials due to a shortage of truckers carrying materials or logjams in ports

For detailed information about the effects of the COVID-19 pandemic, see The Freedonia Group’s:

Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Q1 Financial Reporting Confirms Paint Is a Highlight in This Challenging Home Improvement Environment

May 4, 2020 - Paint. That’s what’s in right now.


  • It’s easy – most people don’t need to hire a professional to paint an interior space.
  • The impact is fast – most rooms can be painted in a few hours.
  • A color change can freshen a space at a lower price than buying new furniture or flooring.

Masco noted this trend as well in its Q1 2020 earnings call transcript on April 29. The company’s president and CEO Keith Allman addressed the probable reasoning behind this bright spot:

  • “As shelter-in-place orders were issued throughout March, we saw a significant acceleration in the sale of Behr paint as more and more do-it-yourselfers took advantage of the time at home to undertake painting projects.”
  • “Homeowners may take on more do-it-yourself projects themselves, especially easy to do projects such as painting as opposed to having other people in their homes.”

For more information, see The Freedonia Group’s coverage of the Global Architectural Paint industry. For detailed information about the effects of the COVID-19 pandemic, see The Freedonia Group’s:

Freedonia Custom Research is also available for questions requiring tailored market intelligence.

States Are Loosening Business Restrictions, but That Doesn’t Mean Consumers Are Ready to Come Back

April 28, 2020 - You can lead a horse to water, but you can’t make it dine on-site or go bowling or see a movie or travel on an airplane or get a haircut…isn’t that how the saying goes?

Despite more and more states announcing plans to loosen stay-at-home restrictions, it is reasonable to expect that consumers will be slow to return to normal, pre-crisis spending patterns due to:

  • the overwhelming share of the population that reports they approve of the physical distancing orders and shelter-in-place policies
  • continuing consumer concerns about their personal health or the health risks to family members due to the coronavirus
  • recessionary conditions leading consumers – even those who are still employed and seeing minimal financial impact due to the crisis – to curtail discretionary spending, regardless of their desire or need to purchase items or make household investments
  • consumers still working from home not yet needing to get lunch away from home, buy work clothes, or get items dry cleaned

On the positive side, a number of key factor will likely boost consumer interest in getting out of the house and participating in activities that reopen, including:

  • Bored, stir-crazy consumers will be looking for an excuse to leave their homes.
  • Creature comforts such as haircuts, massages, and manicures may help some consumers handle
  • Websites have allowed consumers to browse, if not shop, during the stay-at-home period, leading to wish lists and shopping carts urging consumers back into stores to make final purchases.

Marketing, operational processes, and product or service offerings that appeal to the positive factors and minimize concerns about the negative factors will help service and retail businesses slowly open to the best possible outcomes until consumers feel confident enough to return in full force.

For more information, see consumer analysis from The Freedonia Group and our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Airbnb Has Established Cleaning & Disinfection Protocols for Hosts

April 28, 2020 - Airbnb released information about an enhanced cleaning process to protect guests and hosts from the spread of disease and to give travelers confidence to resume travel plans.

Recommended steps include ventilating rooms, cleaning then disinfecting, using disposable gloves, using disposable cleaning supplies (e.g., wipes, paper towels), washing hands frequently, and taking care of frequently touched surfaces as well as textiles and linens.

The company also noted that the Center for Disease Control recommends leaving a space unoccupied for 24 hours before bringing in the next set of guests. For those unable to commit to the cleaning protocol, hosts can sign up for the Booking Buffer feature that automatically leaves homes vacant and unable to be occupied for a set time frame, currently 72 hours, between guests.

The hospitality industry – which sees high levels of unique traffic, including customers from other parts of the world – is a particularly key market for cleaning and disinfection industries. Good cleaning protocols in these locations are essential for controlling a second spike in infections as well as giving customers confidence to return to dining and travel activities.

For more information, see The Freedonia Group’s research on industrial & institutional cleaning chemicals, wipes, and global disposable medical gloves industries as well as the travel services industry. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Reductions in Lumber Mill Capacity Reflect Shifting Housing Market

April 28, 2020 - Prior to the COVID-19 pandemic, the housing market was expected to have another year of growth. A shortage of housing units (especially affordable ones catering to first-time home buyers), generally favorable economic conditions, and increasing numbers of younger consumers looking to move out of apartments and into their own homes made the nation’s homebuilders look favorably to 2020 as a year of sales and profit.

Enter coronavirus, and with it mass unemployment, social distancing, and, in some cases, construction shutdowns. A year that started out with so much promise has quickly turned into a time of retrenchment as building and construction firms across the US – despite their essential nature – have slowed or, in some cases, stopped work on existing projects altogether.

Bowing to this new market reality, many of North America’s leading engineered lumber producers have announced plans to cut back on production for the near term, reducing and in some cases ceasing outputs. While this is not expected to have an effect on supply in the short term due to the general slowdown in construction projects, it may have an effect later in the year. Shortages of such key construction materials as lumber, plywood, OSB, and particleboard will make it more difficult not only for homebuilders but for suppliers of such products as cabinets, millwork, decking, hardwood flooring, and furniture to quickly boost output to meet rising demand.

For more information about the US home building and construction industries, see The Freedonia Group’s coverage of the Building and Construction Industry. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Lysol Discussion Highlights the Need for Product Usage Information & Warnings on Packaging

April 27, 2020 - Many have been giggling about the thought that anyone would ingest disinfectant cleaning products. However, a note from Reckitt Benckiser Group – the manufacturer of Lysol – is a reminder of the need for proper labeling and carefully worded product usage information.

In the US, consumer cleaning products are required to meet labeling requirements as established through the Federal Hazardous Substances Act (FHSA) regulations and administered by the Consumer Product Safety Commission (CPSC). The FHSA requires that the point-of-purchase label informs consumers about the potential hazards of exposure, which product ingredients contribute to those hazards, how to appropriately handle and store the product to guard against risk, and what type of first aid would need to be administered in case of ingestion or other improper usage.

In the case of Lysol and other disinfecting cleaning products, such warnings are necessary in that the products are toxic if ingested and ingestion is a reasonably foreseeable accident that could hurt the purchaser, user, or others, including young children.

In some cases, the required notices are extensive. The need for so many warnings and detailed product information can effect packaging design. Labels must be large enough for the warnings to be legible, even when the manufacturer may prefer to emphasize other elements of the product (e.g., efficacy against contaminants, ease of use, scent).

For more information, see The Freedonia Group’s research on US Industrial & Institutional Cleaning Chemicals and Global Industrial & Institutional Cleaning Chemicals, as well as US Labels, Global Labels, and other elements of the packaging industry.

Renewed Interest in Hygiene to Boost Demand for Touchless Plumbing Products

April 27, 2020 - Studies indicate that one of the effects of the COVID-19 pandemic is an increase in one of the most simplest – yet effective – ways of combatting the virus: washing hands. Nearly 80% of US consumers report changing the way they wash their hands. Building owners and facilities managers will want to do what they can to make sure that this number can increase. Additionally, they will want to reassure workers and visitors in light of heightened hygiene concerns, as businesses, restaurants, and other facilities consider how to safely reopen as the crisis begins to ebb.

One way in which this can be done is to install touchless plumbing products. These items, so named because they can be operated by sensors, can be activated by a user simply by moving a hand or foot near the sensor – avoiding any contact with the plumbing fixture or fitting. This is an important consideration for many people concerned about germs or coming in contact with a surface that may be contaminated with coronavirus. Furthermore, use of these plumbing products can reduce water usage and impart a more modern look to any bathroom facility – important considerations for any building owner or manager.

Types of touchless products than can be installed in bathrooms include:

  • lavatory and kitchen sink faucets
  • toilet fixtures
  • urinals and bidets
  • showerheads and related components
  • soap and hand sanitizer dispensers
  • paper towel dispenser

For more information, see The Freedonia Group’s recent publications, including the full industry study covering Plumbing Fixtures & Fittings (which includes coronavirus market impact analysis) and the special slide deck COVID-19 Impact Report: Plumbing Fixtures & Fittings (which covers the current crisis and places it in the historical context of other recent economic crisis).

Toilet Paper Shortages Cause Demand for Bidets to Shoot Up

April 27, 2020 - For many US consumers, the quest for toilet paper has been a Sisyphean ordeal, as stores have either sold out of or greatly limited purchases of this once humble product. However, some consumers have decided to largely eliminate this quest for toilet paper by installing a product only rarely seen in the US bathroom: the bidet.

Common in Europe and much of Asia, bidets sharply reduce or even eliminate the need for toilet paper. While bidets have traditionally been large standalone fixtures, many of newer bidet models are smaller in size. Indeed, many of these units can be attached to existing toilet fixtures and can be run on existing water supply lines – eliminating the need for costly plumbing work.

Bidets provide a number of additional advantages:

  • environmental – toilet paper production in the US is an energy- and water-intensive process, not to mention the virgin paper pulp and chlorine involved for most types
  • on-site plumbing protection – reduced use of toilet paper can minimize the incidence of clogs and extend the service of a home’s drain, waste, and vent systems
  • improved municipal waste treatment – sewer systems will find it easier to treat waste water, as there will be less toilet paper to break down in waste treatment systems
  • home value – installing a bidet can create a bathroom with a more modern or European style, enhancing both its utility and value
  • hygiene and skin protection – bidets clean better than paper and are gentler on delicate skin
  • economics – reduced spending on toilet paper will cover the cost of a more basic add-on bidet option within 6 months

Still, bidet suppliers have a cultural resistance to overcome in the US. However, the scarcity of toilet paper – particularly high-end varieties – has created an opportunity on which the industry can capitalize. Consumer education, increasing exposure to bidets in travel and high-end hotels, and appealing to younger and environmentally concerned consumers will further boost sales.

For more information, see The Freedonia Group’s recent publications, including the full industry study covering Plumbing Fixtures & Fittings (which includes coronavirus market impact analysis) and the special slide deck COVID-19 Impact Report: Plumbing Fixtures & Fittings (which covers the current crisis and places it in the historical context of other recent economic crisis).

Sales of Top Food Brands Surge; Shortages on Grocery Shelves Could Mean Opportunities for Upstarts

April 24, 2020 - I think no one is surprised by news from Modelez that sales of Oreo cookies and Cheez-it and Triscuit snack crackers are surging. Who among us hasn’t stocked up on beloved snack treats for our kids (or ourselves) now eating every meal at home?

At times of crisis, consumers often seek out known brands, particularly those that we associate with childhood or simpler times. Also, as more shoppers are looking to get in and out of grocery stores quickly, known brands makes decision making easy.

However, as demand spikes and supply chains struggle to keep up, some store shelves have limited stocks of the best known brands. I remember telling friends after a recent shopping trip, that the store had everything I was looking for, if not the exact brand.

This crisis presents several opportunities for upstart companies and less known brands:

  • If consumers try these brands when their preferred and known version is unavailable, they might be willing to keep buying it post-crisis
  • Limited supplies of known brands can make it easier for less known brands to stand out on shelves, perhaps getting prime eye-level space they would not have otherwise had
  • Consumers suddenly doing more cooking and providing all meals of the day from their kitchens might be seeking variety and find that hoped for novelty in upstart food companies
  • Consumers looking to avoid in-person shopping might discover new brands online. New brands are more likely to sell through direct-to-consumer channels, skipping retail shelves altogether

For more information, see our sister publisher Package Facts’ coverage of the food and beverage industry as well as The Freedonia Group’s coverage of the packaging industry. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Post-Coronavirus, 2021 a Pivotal Year for Point-of-Sale (POS) Market

April 24, 2020 - By next year, the aftershocks of the current coronavirus pandemic will fully be felt, according to experts with our sister publisher Packaged Facts. As a result, the market is expected to face a significant setback in 2021, as the corrosive effects of a global recession if not depression set in, along with fintech players’ tactical responses to the changed economic and consumer credit landscape. 

Many companies in the sector are fueled by private capital interests that may or may not be willing to support the petri-dish experimentation of credit strategies that has characterized this new consumer credit industry. Packaged Facts points out that none of these companies has lived through an economic crisis and while this industry segment benefited from the after-shocks of the Great Recession, their own business models haven’t been stress-tested by a major downturn.

Even so, Packaged Facts argues that prime and super prime credit consumers will tend to return to that credit status, despite the significant personal finance setbacks that will follow from the COVID-19 economic downdraft. This means that prime+ debt they hold today may take a while—maybe even a long while--to be paid off, but that payoff will indeed happen.

Packaged Facts therefore projects the U.S. point-of-sale financing industry to claw its way back to aggressive double-digit growth, thereby approaching $2 trillion in revenues by 2025. 

For more information, see our sister publisher Packaged Facts’ report Point-of-Sale Installment Loans: The U.S. Market and International Perspectives, with COVID-19 Market Impact Assessment. We publish market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, consumer financial products and services, consumer goods and retailing, and pet products and services.

A Solid Market Footing, Pandemic Notwithstanding

April 24, 2020 - As of April 2020, the U.S. pet industry has been battered by the coronavirus pandemic for over a month. Currently undermining business operations in the pet industry and beyond are:

  • the number of coronavirus cases and casualties climbing every day
  • unemployment claims skyrocketing due to business cutbacks and closures, stay-at-home orders, and social distancing
  • daily gyrations across international stock markets

Combine this with the employment uncertainty—highlighted by the nearly 17 million (and still growing number of) unemployment claims filed by mid-April—and even the recession resistance of the pet market will be challenged throughout 2020, although the federal stimulus package intended to jump-start recovery will likely mitigate losses to some degree, notes our sister publisher Packaged Facts in the new report Reptile Products: U.S. Pet Market Trends and Opportunities.

Not knowing how long the medical coronavirus crisis will last, how severe the economic fallout will be, or how much the pandemic will alter relationships between domestic and world markets, it is hard to predict the impacts on the U.S. pet industry. Nevertheless, numerous societal and demographic factors at play in the market are likely to remain in force during and after the crisis, suggesting the business is on firm footing for recovery after the pandemic.

For more information, see our sister publisher Packaged Facts’ coverage of the pet industry.

US Automotive Industry & Supply Chains Temporarily Reshaped by COVID-19

April 21, 2020 - US automobile manufacturers have quickly altered their operations due to COVID-19. Many firms adjusted to slumping new car sales by slowing down assembly lines or ceasing production altogether, while other manufacturers have worked to re-tool production to make ventilators and other needed medical equipment. This contraction of automobile production activity has affected hundreds of companies across the US.

Suppliers of automobile parts and components have been hard hit as orders for their products have dried up. Given that – in many cases – these suppliers rely on subcontractors with the parts needed to put together steering, axle, chassis, and the other assemblies, the shutdown of a single plant can ripple down to multiple other businesses.

Furthermore, this drop in orders will affect those companies that provide raw materials to the industry. Getting beyond the more obvious metals used to produce modern automobiles, such as steel and aluminum, a wide range of other inputs is also required, such as plastic resins, rubber (not only for tires but for acoustical and vibration control), composites (e.g., fiberglass and carbon fibers), coated fabrics (for upholstery, headlining, air bags, etc.), and glass.

Some of those materials – including plastics and coated fabrics – can be reposed into needed personal protective equipment and some plastics, gaskets, and other items will be used for ventilators. However, a prolonged shutdown of the nation’s automobile production capacity would still have dire effects cascading through to parts suppliers and firms that provide key raw materials.

For more information, see The Freedonia Group’s extensive catalog of off-the-shelf research. Each report includes analysis of competitive strategies, including joint ventures and merger and acquisition activity. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

How Pandemic-Related Shifts in Our Eating & Shopping Habits Will Alter the Equipment Needed to Keep it Fresh

April 17, 2020 - The coronavirus pandemic has drastically shifted how we purchase foods and beverages. For example, the most recent release of monthly sales data from the US Census Bureau reported that unadjusted retail sales at food and beverage stores posted a 30% increase from February to March of 2020 and a 26% increase over comparable sales in March 2019.

This shift is also altering the landscape of cold storage equipment:

  • A sharp decline in foodservice revenues has caused food distributors to readjust their business toward retailers, increasing the need for cold storage at distribution sites and in grocery stores.
  • A spike in e-commerce food sales, long thought to be the final frontier of traditional consumer shopping, is requiring additional investment in cold storage equipment to accommodate both direct-to-consumer shipped orders and in-store or curb-side pickups.

There is expected to be some amount of return to normal shopping habits when the pandemic passes and consumers are not restricted to certain shopping behaviors. Therefore, to some degree, this may be a short-lived bump in equipment sales to meet an immediate need.

However, this pandemic will also lead to some permanent changes in consumer behavior, reinforcing what had already been a trend toward the use of e-commerce food shopping or curb-side pickup. Therefore, in certain areas, there will need to be a strong continuation of investment in cold storage equipment – both in stores and at food warehouses – to meet sustained demand.

For more information, see The Freedonia Group’s coverage of the Commercial Refrigeration Equipment industry as well as our sister publisher Package Facts’ coverage of the food and beverage industry.

Food Retail Sales Were Way Up In March…Yes, We All Stocked Up

April 17, 2020 - The most recent release of monthly sales data from the US Census Bureau reported that unadjusted retail sales at food and beverage stores posted a 30% increase from February to March of 2020, and a 26% increase over comparable sales in March 2019.

This reflects a few main factors:

  • consumers stockpiling their pantries, freezers, and refrigerators ahead of stay-at-home orders, which then led many to limit their shopping trips
  • the shift in eating patterns as schools were closed and children who had previously eaten meals from school cafeterias began eating at home
  • the percentage of consumer food spending that has shifted from eating out to eating at home, as stay-at-home orders closed dine-in operations at restaurants and other foodservice outlets throughout the country

Expect April figures to remain above same-month 2019 patterns but likely not as high as in March 2020, which included a lot of panic buying and stockpiling that will have been reduced in April, when many stay-at-home orders had already taken hold. Still, dine-in operations remain closed and a large number of consumers are feeling economically uncertain or working at home, thus still limiting away-from-home food purchases.

Still, carryout and delivery foodservice spending will likely see a bump as consumers seek more meal variety or a break from cooking. The addition of more restaurants offering contact-free payments, carryout, or delivery will also boost sales.

For more information, see The Freedonia Group’s coverage of the packaging industry as well as our sister publisher Package Facts’ coverage of the food and beverage industry.

Honey-Do Lists & DIY Projects: Strong Retail Sales but Tightening Business Restrictions in Some Places

April 17, 2020 – The most recent release of monthly sales data from the US Census Bureau reported that unadjusted retail sales at building material distributors and other related sales outlets posted a 25% increase from February to March of 2020 – despite the fact that many parts of the country were under shelter-in-place orders in the second half of March. Such sales were up 10% over comparable levels in March 2019.

While this increase can be partially attributed to better weather conditions as winter turned to spring and construction professionals stocking up on supplies in expectation of an increase in work as the weather improved, another factor may also have worked to boost sales: consumers undertaking long-delayed home improvement projects.

Many homeowners – either working from home or furloughed – suddenly found themselves with plenty of time on their hands and decided to take advantage of the situation by engaging in projects around the house. Others, casting a critical eye across their home, decided now was a good time to transform their residence into something completely different. Either way, home improvement centers, hardware stores, garden centers, and other retailers – to say nothing of the manufacturers of these items – have benefitted .

Sales have increased most for products that are best suited to DIY projects, particularly paint and wallpaper, flooring (most notably easier to install types such as luxury vinyl tile, laminate flooring, and decorative tile), garden supplies and tools, and outdoor furniture and grills. Cabinets, plumbing fixtures, drywall, and lumber appeal to customers who have the skill and tools to tackle larger or more complicated projects.

However, this spike in sales has led some government agencies to close all or part of such stores, since visiting crowds were getting too big to allow sufficient social distancing and protection for the staff. For instance, Michigan’s governor has tightened business restrictions so that large discount and home improvement stores that were otherwise labeled as “essential” and allowed to remain open during stay-at-home orders must close areas "dedicated to carpeting, flooring, furniture, garden centers, plant nurseries, or paint".

In order to keep from being subject to additional restrictions, retailers must institute policies and practices that will allow safe shopping and ensure appropriate distances between customers, including limiting the number of customers allowed at a time. Greater use of online ordering and curbside pick-up services will help.

For more information about these products and the US retail sales outlook, see the following Freedonia Group reports: Live Goods: Plants, Trees & Shrubbery, Cabinets, Countertops, Outdoor Furniture & Grills, Outdoor Kitchens, Global Flooring, Global Architectural Paint, and Global E-Commerce.

Outbreaks at Meat Processing Plants: Concerns About Worker Safety & Food Supplies

April 15, 2020 - On Sunday April 12, Smithfield Foods announced its decision to close a major pork processing plant in Sioux Falls, South Dakota, after an outbreak of COVID-19 infections among at least 238 of the facility’s 3,700 employees. Other meat processors that have closed plants for the same reason include Cargill, JBS, and Tyson Foods, and more are likely to close as the infection spreads in the rural and farming area where these plants are most commonly located.

The concern isn’t for the safety of the food – as the FDA reports, "currently there is no evidence of food or food packaging being associated with transmission of COVID-19.”

The problem is the transmission of the virus among workers, many of whom work in close proximity to one another and often without sufficient personal protective equipment (PPE), particularly in light of nationwide shortages of these supplies, even for medical workers. These workers then spread the illness further into their communities.

The meat industry was already stressed by the sharp reduction in demand from the closure of the dine-in foodservice industry. Now, livestock farmers are finding the market for their animals among processors is being limited. Supplies of retail chains are likely to hampered as well; for instance, the closed Smithfield pork processing plant represents up to 5% of US pork production.

Access to more personal protective equipment, improved testing procedures, plans for disinfection and reporting if a worker tests positive, and consumer and worker confidence in plant disinfection procedures are among the measures that will get the plants open and running again. There will likely be consumer concern about the safety and ethics of big meat processing, which might propel some to shop from local butchers and direct-from-supplier shares of cows and pigs.

For more information, see the following reports from our sister published Packaged Facts – Global Meat & Poultry Trends, Eating Trends: Meat, Dairy, Vegetarian, and Vegan, and The Organic and Clean Label Food Shopper – as well as The Freedonia Group’s Meat, Poultry, & Seafood Packaging and Global Food Processing Machinery.

E-Commerce & Softening Lean Inventory Patterns Drive Need for Warehouse Space

April 15, 2020 - Supply chains are changing as consumers increase the amount of shopping they do via e-commerce and more of food and supplies are being distributed through consumer – rather than commercial­ – channels as people spend more time in offices and other commercial spaces. Additionally, there is more of a consumer appetite for having stocks of goods, thus requiring suppliers to loosen their lean inventory programs.

As this Wall Street Journal article indicates, the sudden changes in the buying habits of US consumers for a handful of goods has caused demand for warehouse space to increase.

This need for millions of square feet of additional warehouse space is expected to boost demand for a wide range of building and construction materials, key among them:

  • metal roofing, siding, and wall panels
  • other low-slope roofing products and such roofing accessories as drains and liquid-applied roof coatings
  • cement and concrete used to make subfloors, flooring, and such areas as loading docks
  • insulation – especially those materials required to maintain temperatures in structures designed to store frozen and refrigerated items
  • overhead doors
  • commercial-grade HVAC systems
  • material handling equipment, including racks, conveyors, and storage and retrieval systems
  • safety equipment and burglar alarms

Furthermore, the nation’s building contractors and construction professionals would welcome a surge of warehouse construction activity. While construction has been deemed essential in most states, many firms expect at least a short-term drop in operations as home and business owners react to challenging economic conditions by delaying – if not canceling altogether – construction projects such as major home improvements or key renovations. Builders and contractors will be more than ready to assume the task of quickly erecting warehouses needed for storing such essentials as food and toilet paper.

For more information about the products listed above, see the following reports from The Freedonia Group: Low-Slope Roofing, Roofing, Roofing Accessories, Global Roofing, Global Cement, Global Cement & Concrete Additives, Insulation in the US, HVAC Equipment, Global HVAC Equipment, Garage & Overhead Doors, Windows & Doors, Global Material Handling Equipment, and Safety & Security Alarms, as well as Global E-Commerce and Packaged Facts’ Global Food E-Commerce.

McDonald’s Reduces Restaurant Remodeling: COVID-19 Pandemic Reverberates to Commercial Construction Market

April 15, 2020 - The recent announcement that McDonald’s would – as part of a company-wide retrenchment program – remodel fewer of its restaurants going forward is yet another adverse event for the US construction industry to weather. While there has a been a significant level of concern regarding the effect of the coronavirus pandemic on the housing market, the commercial construction industry will also be affected by COVID-19.

While a significant part of McDonald’s renovation plans for its restaurants were technological upgrades to more quickly process food orders and offer enhanced menu displays, every store renovation project also requires the use of a wide range of building materials, such as:

  • lumber and plastic components needed to make store furniture, kiosks, and related fixtures
  • decorative laminate surfacing to provide durable yet attractive wall and counter surfaces
  • countertops with integrated charging ports for personal electronic devices
  • new kitchen equipment, such as cooktops, refrigerators and freezers, and fryers
  • upgraded plumbing fixtures and fittings and such related products as grease traps

It is anticipated that other businesses will delay, if not cancel altogether, large-scale renovation going forward as companies look to reduce expenses. Other businesses that require franchisees or other operators to regularly engage in regular renovations to modernize their appearance include restaurants, hotels, retail stores, banks, and senior living facilities.

For more information about the US commercial construction industry, see The Freedonia Group’s coverage of the Building and Construction industry, and for more information on the prospects of these key industries see the following reports: Restaurants & Foodservice, Elder Care Services, and Commercial Banking.

Food Industry: Insufficient Workers With Immigration Limitations

April 13, 2020 - Even before the coronavirus pandemic sharply curtained legal border crossings for seasonal workers, farmers were concerned that they would not have enough workers to plant and harvest crops.

Most farm work – particularly of delicate crops such as strawberries – is still very labor intensive, relying on a stream of seasonal worker, much of which comes from Mexico and other Latin American countries. Even where innovation has made greater automation possible, it is not an option for farmers who do not have the margins, particularly in this economic climate, to afford major investments.

If food is not planted in sufficient amounts to cover the market’s needs, food prices for consumers will rise. If the food cannot be harvested in a timely manner or some is lost to climate or weather conditions, there will be additional losses driving prices up even further.

Therefore, the need for adequate workers in the farming industry will have long-running impacts. Immigration regulations will need to be loose enough to cover for the lack of domestic workers in this area, and coronavirus containment procedures will need to be in place to prevent outbreaks among the migrant worker population, many of whom live in cramped temporary housing where social distancing is not possible and sanitation conditions are typically not optimal.

Current efforts to increase processing of H-2A temporary guest worker visas will help as it is something that many growers have been asking for. The suggestion from the Trump administration to reduce wages for foreign guest farm workers is more controversial, however, and has been met with resistance from immigrant and labor advocates as well as advocates of immigration restriction.

For more information, see our sister publisher Packaged Facts’ coverage of the food industry. Relevant information from The Freedonia Group includes our Global Food Processing Machinery report, which also includes COVID-19 market impact analysis. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Food Industry: Transportation & Logistics Challenges in the Supply Chain

April 13, 2020 - What if there are not enough truckers to bring crops to processors or stores?

What if there are not enough commercial flights (a key transport channel for perishable items) running from South America?

What if border crossings are limited, and the movement of produce and other perishables from fields outside of the US slows?

These are some of the supply chain concerns that keep food retailers and food processors awake at night. Logistics are an increasing concern as the coronavirus pandemic moves around the world.

Regulatory solutions have included dedicated lanes for movement through border crossings and relaxed driver hour limitations for those carrying essential products. However, driver losses due to illnesses or quarantine will be tough to overcome since the commercial driver cohort includes a lot of older workers and new commercial drivers cannot be trained overnight.

Airborne freight shipping will likely remain costly while there are fewer commercial flights in operation worldwide. Shipments of goods often ride in the cargo holds of passenger flights, but those are in limited supply now as travel is largely restricted to essential movement. This will limit imports and possibly product selection and will likely result in food price increases.

For more information, see our sister publisher Packaged Facts’ coverage of the food industry, including Global Food E-Commerce. Relevant information from The Freedonia Group includes such reports as Global Bulk Packaging, US Rigid Bulk Packaging, Global Commercial Refrigeration, US Commercial Refrigeration, and Global Pallets, as well as Global Food Processing Machinery, which also includes COVID-19 market impact analysis. Additional information from Freedonia Focus is available in these reports: Freight by Truck, Air Transport Services, and Water Transport Services. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Food Industry: Waste & the Supply Chain – Surplus & Shortage at the Same Time

April 13, 2020 - Food waste – considered a leading environmental problem even before the coronavirus pandemic – has become an even bigger problem in recent days. Raw milk is being dumped and produce is rotting in the fields, all while many grocery stores have limited supplies and have instituted limitations on how many containers of milk consumers may buy per trip.

What’s the problem? A large part of the food supply chain is oriented around the foodservice industry – restaurants, school cafeterias, and other locations that are suddenly seeing sharply limited need in light of school closures and stay-at-home policies that have temporarily barred on-site restaurant dining.

Important government support measures would include:

  • government purchases to redirect supply to food pantries and school meal distribution programs
  • loans to enable food processors to redirect their operations to retail products
  • support for farmers who have to dump excess product because limiting output during the pandemic is not possible without leaving the food supply vulnerable to insufficient production when eating trends normalize

One private sector response, which provides more work for underemployed foodservice staffers, is selling groceries through foodservice outlets. Firms such as Panera Bread and Subway have started to offer take-home groceries in addition to prepared food.

Suppliers, processors, and retailers will all need to remain flexible, including shifting packaging purchases from bulk and large-scale containers to smaller containers needed for individual and family purchases at the retail level. This will require packaging companies to shift their own production  operations  to make enough smaller packaging options available.

Another kink in the shift from foodservice operations to more retail sales is that retailers are struggling to keep up with demand at their warehouses and in stores. In an attempt to work through a solution of labor needs, Sysco (a leading supplier to the foodservice industry) made a deal with Kroger (a major retail grocer) to allow its furloughed workers to temporarily work at Kroger distribution centers.  

For more information, see our sister publisher Packaged Facts’ coverage of the food industry, including The Organic and Clean Label Food Shopper, Affluent Food Shoppers, Global Food E-Commerce. Relevant information from The Freedonia Group includes our influential coverage of the Packaging industry, which encompasses reports on Global Bulk Packaging and US Rigid Bulk Packaging, as well as the Meat, Poultry & Seafood Packaging report, which includes a new addendum with COVID-19 market impact analysis and an estimated market size for year 2020. Capital goods analysis is found in Global Food Processing Machinery, which also includes COVID-19 market impact analysis. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Seafood Industry Facing Challenges from In-House Dining Shut-Downs But Has Opportunities to Appeal to Home Cooks

April 10, 2020 - The seafood industry is seeing challenges during the coronavirus crisis. Many food industries are balancing losses in the foodservice market against gains in the retail as consumers shift their food spending away from restaurants to stocking their home refrigerator, freezer, and pantry.

However, the seafood industry has typically relied heavily on foodservice, with more than two-thirds of the value of consumer spending on seafood occurring at restaurants, caterers, and others. Higher value versions (e.g., scallops, lobster) are particularly hard-hit by the loss of sales to this sector. The worldwide industry is further hampered by economic slowdowns in key global seafood-consuming nations such as China, Italy, Japan, and Spain.

Seafood sales are more challenged on the retail side than many other foods:

  • Many consumers are not in the habit of cooking seafood.
  • Some home cooks consider seafood more difficult to cook properly.
  • Picky tastes among children may keep families from buying and serving seafood to the family at large.
  • Seafood is often more expensive than other proteins, which will prevent consumers who are concerned about their budgets in an uncertain economic period from buying it.

However, consumers still view seafood as healthy. Additionally, more time spent at home is leading some home cooks to experiment with recipes they might have considered to be too complicated or time consuming before. Falling prices associated with an oversupply may also convince consumers to increase seafood purchases made through retail outlets.

Marketing efforts to bolster sales could include emphasizing the healthful benefits and nutritional content of seafood, as well as providing chef-driven instructional videos and recipes. Products that are free of artificial flavors, colors, and preservatives take advantage of current clean eating trends. However, ready-to-eat and recipe-ready products accommodate consumer desire for convenience.

For more information, see our sister publisher Packaged Facts’ coverage of the food industry, including The Organic and Clean Label Food Shopper, Affluent Food Shoppers, Global Food E-Commerce as well as The Freedonia Group’s reports on Meat, Poultry & Seafood Packaging, which includes a new addendum with COVID-19 market impact analysis and an estimated market size for year 2020, and Global Aquaculture.

Face Masks: Production Shortages & Export Restrictions

April 7, 2020 - On Thursday April 2, the Trump administration invoked the Defense Production Act requiring 3M to prioritize sales of its face masks to the US Federal Emergency Management Agency over other customers.

Before the COVID-19 crisis, 90% of 3M’s N95 mask capacity had been going to industrial customers. However, the CEO of 3M has already noted that the company has shifted sales so that 80% of its US sales now go to healthcare facilities in the hardest-hit areas, while the other 20% go to federal agencies such as FEMA. The concerns were that 3M – which sells US-made masks to Canada, Mexico, and Latin America (including countries where it is the sole supplier of N95 masks) – would not be able to fulfill the needs of domestic and global customers. However, restricting supply to other countries may lead to retaliation and shortages in these or other areas.

The US is only responsible for about 30% of the global production of medical disposable equipment in value terms. While the US is, overall, a net exporter of these products, that status does not hold across all individual product categories. Particularly in a time of crisis, the US must cooperate with all markets within global industries, which is part of what could make the demand that 3M reappropriate its existing and expanding capacity deeply problematic. Canada, which buys US-made face masks from 3M, is a key supplier of wood pulp, a primary material used to make N95 face masks as well as test kits and gloves. Global supply chains demand cooperation to function smoothly.

As of Sunday April 5, Canada’s Prime Minister Justin Trudeau did not yet have plans to retaliate and expressed hope that the supply situation could be addressed through diplomatic channels instead.  

For more information, see The Freedonia Group’s US Disposable Medical Supplies, Global Disposable Medical Supplies, Global Nonwovens reports. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

US Home Building Declared Essential by Department of Homeland Security

April 2, 2020 - Building and construction professionals across the nation were cheered by the recent decision by the Department of Homeland Security (DHS) that home building was an “essential” business. While individual state and local authorities can issue regulations more closely defining what is an essential business, the inclusion of home builders by the DHS in its list of essential industries means that – in many jurisdictions – the erection of new single-family and multifamily housing units can continue.

This declaration underscores the importance – even in a time of pandemic – of the home building industry to the US economy. In addition to the millions of jobs the industry provides, the US faces a lack of affordable housing, something which can only be remediated by the construction of new homes and apartments. Integral to the recovery of the US economy after the COVID-19 pandemic subsides will be the addition of new and affordable to nation’s housing stock.

While construction of new homes will continue in many parts of the US, state and local governments across the country are working to limit the spread of coronavirus on jobsites by requiring:

  • social distancing between workers
  • limited numbers of subcontractors on a job site at any given time
  • periodic temperature checks of workers
  • frequent cleaning and sterilization of tools and equipment

For more information about the US home building industry, see The Freedonia Group’s coverage of the Construction and Building Products industries.

Expanding Range of Manufacturers Declared “Essential” Shows Importance of Construction Industry to Nation

April 2, 2020 - The US Department of Homeland Security issued revised guidelines as to which firms could be considered “essential” and thus could remain in operation during the COVID-19 pandemic. Among the firms specified by the DHS were those involved in the production of:

  • cabinets
  • windows and doors
  • plumbing products
  • heating, ventilation, and air conditioning (HVAC) equipment
  • paints and coatings
  • store fixtures
  • appliances

This revised guidance as to what is considered to be essential demonstrates the continuing importance of the nation’s construction industry, even in times of crisis. The US faces a shortage of affordable housing units and – in many areas – will require additional medical facilities to treat those affected by COVID-19 and other ailments.

By declaring that firms manufacturing those items used in homes, medical facilities, and other structures, the US is signaling its commitment to ensuring that the US will not only continue to fight coronavirus but also to ensure that the economy – once the pandemic ends – can return to normal as quickly as possible.

For more information about the US cabinets, windows and doors, plumbing, HVAC equipment, appliances, and paints and coatings industry, see The Freedonia Group’s coverage of the Construction and Building Products industries.

Despite Pet Industry’s Strengths, 17% Sales Drop Projected for 2020

April 1, 2020 – The pet industry is famously recession resistant, coming through both the September 11, 2001, attacks and the Great Recession of 2008-09 relatively unscathed. However, not even the new “pet parent” sensibility can make the pet industry recession-proof in the midst of the novel coronavirus pandemic. 

In its just-published U.S. Pet Market Outlook 2020-2021, market research firm Package Facts forecasts that total U.S. retail sales of pet products and services will decline by 17% in 2020, compared with the 5% growth anticipated prior to the coronavirus pandemic. The firm projects a substantial, though partial, rebound in 2021 that will stem from the underlying strength of the pet industry.

The U.S. pet industry is coming off a strong performance in 2019, with overall sales of products and services rising 5.4% despite the maturity and impressive scope of the pet industry.

For more information, see Pet Market Outlook 2020-2021 along with the rest of the pet industry coverage from our sister publisher, Packaged Facts.

Pet Ownership in Challenging Times & the Effect on Pet Industry Sales

April 1, 2020 – Increased ownership rates for dogs, a pattern evident in the wake of the Great Recession, “might help soften the blow of pet industry losses,” according to David Sprinkle, research director for Packaged Facts, “and in the long term, losses aren’t characteristic to the U.S. pet market.”

Ownership (and adoption from pet shelters) of the most companionable and pettable pets may get a boost among a national population that is now largely isolated, staying at home, and well aware of the mental and physical health benefits of pet ownership.

New pet parents tend to be key buyers of pet products as they look to accommodate an expansion of their pet family or to make their home suitable for their first pet. Pet industry businesses can partner with pet shelters and rescue groups to highlight the ongoing need for homes for these animals and the companionship benefits they have for homebound people.

For more information, see Pet Market Outlook 2020-2021 along with the rest of the pet industry coverage from our sister publisher, Packaged Facts.

Opportunities in the Pet Industry

April 1, 2020 – The pet industry is expected to see declines in three out of the four pet industry sectors –pet food and treats, veterinary services, non-food pet supplies, non-medical pet services – in a year affected by COVID-19 and economic challenges.  

Non-medical pet service sales are expected to suffer the sharpest drop in 2020 – at 47% – due primarily to the link between pet boarding services and business/leisure travel. Also projected to drop in 2020  are sales to the veterinary sector and of non-food pet supplies, reflecting in part the discretionary nature of some of the services and products involved.

However, somewhat mitigating the overall market loss will be continued (though tapered) growth in essentially non-discretionary pet products, primarily pet food and cat litter. Pet food, the largest pet industry sector, is forecast to grow 4% in 2020, compared with a 6% growth forecast before the COVID-19 pandemic impact. A slightly less rosy outlook for pet food sales will reflect, as during the Great Recession, some trading down to value and store brands.

Key opportunities exist in products and services that emphasize the ongoing wellbeing of pets. Suppliers will also want to emphasize the value associated with their products.

For more information, see Pet Market Outlook 2020-2021 along with the rest of the pet industry coverage from our sister publisher, Packaged Facts.

Pet Industry: Opportunities in E-Commerce

April 1, 2020 -- A continued boom in pet product e-commerce delivered incremental gains in 2019, while a larger-than-expected pet food sales increase in mass channels bolstered the overall market.

Online retailers are well-positioned to continue gains in shares and sales. A pre-coronavirus pandemic surge in Internet sales of pet products – leading to a platinum-plated IPO for – spurred massive pet market investment in e-commerce logistics, which should help shore up the products side of the industry in the coming months. This advantage is doubly important because the shift to e-commerce has grown the overall pet products sector and not merely cannibalized sales from brick-and-mortar outlets. Packaged Facts projects the online share of overall pet product sales to reach 24% this year and 26.5% by 2024.

For more information, see Pet Market Outlook 2020-2021 along with the rest of the pet industry coverage from our sister publisher, Packaged Facts.

Domestic Textile & Apparel Companies Developing Safety Masks

March 31, 2020 – Although N95 respirators are the face masks most in demand by healthcare workers and first responders, they require a meltblown polypropylene filter material that is not easily produced at the high quality necessary for it to be effective. Therefore, most of these products are still being made by companies such as 3M and Honeywell that already have knowledge and capabilities in this area.

However, a coalition of apparel and textile companies in the US have begun supplying a useful but less sophisticated class of face masks. Because these companies are not technical textile companies, they are making masks with jersey cotton and antimicrobial coatings using a design approved by the US Department of Health and Human Services. These masks were also approved by the US Food and Drug Administration so that they could be labeled as medically certified for use in hospitals. While they are not able to filter out viruses, they are better than nothing for use by healthcare workers interacting with patients or for the general public in situations where there is not an known infection present.

Others are developing a mask that is generally reusable but that features a replaceable meltblown polypropylene N95-level filter. Another group, Stop the Spread, is innovating by promoting partnerships. The organization is a new coalition of volunteer CEOs seeking to connect businesses that can provide different levels of assistance in the production of goods needed to respond to the COVID-19 crisis.

Joint ventures, technology transfers, and industry coalitions will allow companies to adapt to the changing conditions and needs of the COVID-19 crisis and expand production capacities into needed areas. The assistance of regulatory agencies that can either fast-track approval or offer a pre-approved design will allow manufactures to respond more nimbly.

For more information, see The Freedonia Group’s Global Nonwovens, US Nonwovens, Global Filters, Global Medical Disposable Supplies, and Disposable Medical Supplies in the US reports. Each report includes analysis of competitive strategies, including joint ventures and merger and acquisition activity. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

The Defense Production Act & Recasting Manufacturing Capacity For Ventilators

March 31, 2020 – In a time of lean manufacturing and just-in-time operations, there are often limited stocks available for supply chain crunches or other sudden shifts in demand. So on Friday March 27, President Trump used the Defense Production Act to compel General Motors to produce ventilators, even as insiders noted that the company was already putting workers on an urgent project to do so.

General Motors, Ford, and others are repositioning their operations to produce or procure through their supply chains the components needed by ventilator manufacturers. They and others are also using capacity made available by reductions in their regular manufacturing operations due to reduced demand or challenges accessing key components.

Because ventilators are complex items produced under strict safety measures that often require medical-grade plastics and cleanroom operations that a vehicle manufacturer may not have, joint ventures are needed. Stop the Spread, a new coalition of volunteer CEOs seeking to connect businesses that can provide different levels of assistance in the production of goods needed to respond to the COVID-19 crisis, helped connect GM with its partner Ventec among other companies that can help GM meet its needs.

Manufacturing firms have long used joint ventures to adapt to changing conditions, improve technological capabilities, and expand production capacities. Companies will need to dive into such operations in more depth to respond swiftly to the coronavirus pandemic. Considering how current capabilities align with the needs of other businesses and how current needs in industry and health align with their operations would be the way to start.

For more information, see The Freedonia Group’s extensive catalog of off-the-shelf research. Each report includes analysis of competitive strategies, including joint ventures and merger and acquisition activity. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Concerns About Coronavirus Transmission Promote Use of Single-Use Plastic Bags

March 26, 2020 - One unintended consequence of the coronavirus outbreak has a been a resurgence in the use of single-use plastic bags. Derided by many due to their perceived negative effects on the environment, many local and state governments across the US – including the key states of California and New York – have banned use of or begun charging fees for single-use bags in recent years, and leading grocery retailers announced plans to stop giving them away at their stores.

However, a growing number of stores are again giving away single-use plastic bags as part of their efforts to reduce the spread of coronavirus. In fact, one state – New Hampshire – has temporarily banned reusable bags, and Maine postponed the implementation of its plastic shopping bag ban. The reason: concerns about the cleanliness of reusable bags. While coronavirus can be removed from plastic surfaces (many plastic shopping bags are made from a high level of recycled plastic content), few shoppers clean their own reusable bags after each use. Thus, to minimize concerns about coronavirus spreading via cross-contamination, retailers are encouraging and again supplying single-use plastic bags.

While the long-term effect of these efforts remain unclear – no one is sure how hygienic practices will change as the virus becomes less of a threat – in the short term, at least, demand for single-use plastic bags is expected to rise.

This presents an opportunity for plastic bag manufacturers to reargue their position that plastic shopping bags – which are readily recyclable (even if the recycling rate remains low) and often made with high post-consumer recycled content – are the more sustainable option compared to polypropylene reusable bags, which are not recyclable. However, now they are adding the hygiene angle. In fact, the Plastics Industry Association has already requested that the US Department of Health and Human Services endorse plastic bags as the safest choice during this pandemic.

To counter that argument and support what had been the increasing consumer habit of carrying reusable bags, the reusable bag industry will need to educate consumers about adequate bag cleaning measures and ensure that the bags are able to withstand frequent cleaning cycles.

For more information, see The Freedonia Group’s Retail Bags report as well as total coverage of the Plastics and Packaging industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Lumberyards & Hardware Stores Declared Essential Businesses

March 26, 2020 - A number of governors – including those of our most populous states – have closed all but “essential” businesses in an attempt to limit the spread of the coronavirus.

Fortunately for the construction industry, most governors have included lumberyards and hardware stores as among those businesses classified as essential. In many cases, owners and industry associations have pushed to keep these business open due to such factors as:

  • the large number of people employed by the industry ­– not only by lumberyards and other retail outlets, but also in the construction industry as a whole
  • the key role lumberyards play in ensuring that construction materials can reach contractors and other construction professionals
  • the broad range of products offered by these stores – many of them carry items essential to health and safety, such as cleaning supplies, waste receptacles, toilet paper, and wipes, as well as items needed to maintain a house, which become more important as consumers are told to stay at home
  • the ability of stores to deliver goods while minimizing contact – such as by limiting hours, arranging for curbside pickup and delivery, or by coordinating deliveries when few people are at job sites

Indeed, as state and local authorities increasingly consider erecting temporary medical facilities or converting existing structures (such as college dormitories) into sites for housing coronavirus patients, demand for building materials is expected to climb: proving that the nation’s lumberyards, hardware stores, and other construction products retailers are “essential”.

For more information, see The Freedonia Group’s extensive research on the construction & building products industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Automation: Positioning Companies for Reshoring & COVID-19

March 24, 2020 - Companies that have embraced a high level of automation are better suited to keep operations flowing in the age of social distancing.

But for most industries, this is not new. In fact, this trend has been underway for quite some time. Some industries have adopted automated processes as a way to produce goods in the US that are more cost competitive with those sourced from Asia, particularly since rising employment costs and trade uncertainties with China had already made goods produced overseas not always the given lower cost alternatives they once were.

More manufacturers are noting another benefit to high-tech operations: flexibility. Greater use of technology allows companies to better operate in a world where uncertainty is a common condition.

Automation also allows manufacturers to develop the next generation of products and to perform more complicated tasks via innovations in advanced software and sensors. These underlying software and sensor improvements are leading to product developments that span capital goods industries.

However, one potential downside to automation at a time like this is that the skilled labor pool capable of servicing this equipment is small. If qualified technicians are out of commission with illness, it would be a lot harder to get replacement personal who can handle these pieces of equipment than it would be to just add more unskilled labor to a more manual manufacturing process.

For more information, see The Freedonia Group’s coverage of industrial components and machinery and equipment industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Pallet Manufacturers Considered To Be Essential to Nation’s Infrastructure

March 24, 2020 - Many US consumers are faced with conflicting messaging – assurances from suppliers that there is sufficient product to meet demand, yet empty shelves at grocery stores and other retail outlets across the US. For a number of goods, the main issue is getting product from the manufacturer to the warehouse to the retail outlet. While there are a number of factors that can delay the shipment of goods, a shortage of pallets – used to safely carry numerous cargoes across the US – would be disastrous to the logistic needs of the nation.

Cognizant of this, the Cybersecurity and Infrastructure Security Agency (CISA) has included pallet manufacturers and distributors on its list of “Essential Critical Infrastructure Workers” that the nation needs to ship food, medical supplies, and other needed goods to consumers across the US. Indeed, as US Food and Drug Administration regulations generally require pharmaceuticals and medical products to be shipped on virgin, or newly made, pallets to minimize the risk of cross-contamination, it is necessary for pallet manufacturers to maintain – if not expand – production over the few weeks as respirators, masks, surgical gowns, and other items are transported across the US.

For more information, see The Freedonia Group’s coverage of the Pallets industry. Freedonia Custom Research is available for questions requiring tailored market intelligence.

What Exactly is “Essential”?

March 23, 2020 - As the COVID-19 crisis continues, state governors are beginning to mandate broad closures of private “non-essential” workplaces. Businesses such as grocery stores and pharmacies are obviously considered necessary to operate and are exempt.  But beyond that, how do you determine what businesses are “essential”?

This week, the American Chemistry Council penned a letter arguing that chemical and plastics manufacturing is an essential business that needs to be maintained throughout the crisis. While this seems questionable on its face, the group has a point – cleaning products and hand sanitizers are products of chemical manufacturing, and plastic materials are used in all sorts of essential medical products.

Additionally, others – like the steel industry – are making the case that manufacturing that would be difficult or costly to restart should be deemed essential. Still, some firms are voluntarily closing when a staff member is found to be infected.

This just goes to show the definition of “essential” is extremely hard to parse, given the interconnectedness of the economy and daily life. But one thing we can hopefully all agree on – despite all the time we are spending at home now, videogame retailers are definitely not essential. Sorry, GameStop.

For more information, see The Freedonia Group’s extensive off-the-shelf industry coverage. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

How Movie Studios Are Reacting to the COVID-19 Pandemic

March 23, 2020 - States are taking a variety of steps to help curb the spread of COVID-19, from limiting the size of public gatherings to shutting down movie theaters and other entertainment spaces. This has caused the nation’s two largest theater chains, Regal Cinemas and AMC Theaters, to temporarily shut down all of their theaters in the US.

Unsurprisingly, theater closures are bad for business for the nation’s movie studios. Theatrical releases are scheduled up to a year in advance, and theaters are the main revenue generator for movies that cost hundreds of millions of dollars to produce and market.

Some studios have opted to delay releasing big-budget films until later in 2020, with the hope that the COVID-19 pandemic will be contained and consumers will feel more comfortable congregating in theaters again. NBCUniversal, however, is taking a slightly different approach. In addition to delaying some its releases, the studio also announced that it would release select movies as a digital rental, priced at $20, at the same time as or recently after its theatrical release.

Granted, the movies that NBCUniversal has selected so far are not among its biggest revenue generators, so the risk of lost sales is not as large. However, for an industry that has long resisted altering its business model even as consumers have changed how they view most of their entertainment, this shift is significant and could have a long-term impact on the theaters that support movie studios’ revenue.

Basically, businesses must address this uncertain environment by considering how they can continue to reach and serve customers, even if they have to use avenues they had previously resisted.

For more information see Freedonia Focus’ Motion Pictures & Video: United States and Recreation: United States reports. Freedonia Custom Research is available for questions requiring tailored market intelligence.

Decline in New Home Construction Can Affect Multiple Industries

March 23, 2020 - Reports that coronavirus will cause a slowdown in new home construction could have a severe impact on a number of construction-related industries across the US. In addition to the economic disruption caused by the temporary layoff of the thousands of employees who erect America’s homes, a steep decline in home building would also affect such industries as:

  • lumber mills that supply the wood products intensively used in home construction across the US
  • plants that supply prefabricated components – such as roof trusses and wall panels – that are increasingly being used to speed up construction
  • fastener manufacturers, many of whom were buffeted by the imposition of tariffs on metal imported from China, when they often used to make nails, screws, bolts, and other fasteners
  • producers of the many items need to finish a home: roofing, siding, flooring, plumbing products, drywall, cabinets, countertops, and wiring
  • landscapers and garden supply firms that provide and lay down the lawns and outdoor spaces cherished by homeowners
  • concrete suppliers who pour the foundations and slabs on which homes are erected

For more information about these industries, see The Freedonia Group’s coverage of the Building and Construction Industries.

FDA Suspends Routine Surveillance Facility Inspections; Quality To Be Maintained

March 20, 2020 - On March 18, the US Food & Drug Administration announced that it would be suspending all domestic routine surveillance facility inspections in order to assist in limiting the spread of the COVID-19 virus. For-cause inspections will be evaluated on an individual basis. Earlier in March, the agency had already postponed most foreign facility inspections through April, keeping only inspections deemed mission-critical, a status that will be considered on a case-by-case basis.

The FDA notes that facilities will still be subject to reporting requirements and should engage in Current Good Manufacturing Practice requirements covering sanitation, processing controls, and controls pertaining to food safety hazards. Facilities will continue to be evaluated on that reporting. The FDA notes that the violation rate on such inspections in the previous fiscal year was only about 5%.

Although 47% of consumers who responded to The Freedonia Group’s National Online Consumer Survey indicate that they worry about foodborne illness, 49% of consumers indicate that they trust that products available for sale are likely to be safe. This attitude shows that consumers tend to place much of the onus of food safety on the corporations and government agencies that regulate the food supply. Food suppliers need to assure consumers that this change will not affect food quality at a time when consumers are particularly aware of their health.

For more information, see The Freedonia Group’s Meat, Poultry, & Seafood Packaging, Global Food Processing Machinery, and Food Safety Products, with additional coverage available from our sister publisher Packaged Facts’ food & beverage industry coverage. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Supply Chain Challenges

March 20, 2020 - Conditions in 2019 and 2020 – from the trade wars and various tariffs applied globally to COVID-19-related workforce reductions, production stoppages, and border closures – have put international supply chains front and center.

30% of companies report considering changes to their supply chains, starting with short-term alternative sourcing options and moving on to relocations, onshoring, supplier diversification, and other more long-term ideas.

The longer the coronavirus crisis lasts, the more companies are likely to consider changes, big and small. The trade war with China got the ball rolling; the coronavirus will provide additional incentives to make adjustments.

For more information, see The Freedonia Group’s catalog of global reports covering machinery and heavy equipment industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Flexibility: That’s the Key for Manufacturers

March 18, 2020 - Manufacturers are seeing supply chain disruptions, changing demand patterns, and staffing crunches due to social distancing and illness.

As a result, some are using available capacity, materials, and skill to redirect. For instance, in the UK, the Department for Health and Social Care sent specifications for how to make ventilators to more than 60 manufacturers, including motor vehicle and aerospace firms such as Rolls-Royce, Airbus, Jaguar Land Rover, Honda, and Ford. Many of these firms had already reduced or curtailed their regular production operations due to reduced demand or challenges accessing key components.

Companies are being asked produce components or to make staff available to assist specialist firms, and to shift their own production capacity, if possible.

The challenge is that these vital pieces of equipment are complex machines that are produced under strict safety regulations. However, specialist manufacturers, engineers, and government agencies are working out a basic, functional version that is cheaper and easier to produce.

It typically takes 2-3 years for a ventilator to pass regulatory muster and be approved for use. However, specialists could work with auto manufacturers and others that have advanced manufacturing facilities to adapt their operations to suit current designs.

Manufacturing firms have long used joint ventures to adapt to changing conditions, improve technological capabilities, and expand production capacities. Companies will need to dive into such operations in more depth. Considering how current capabilities align with the needs of other businesses and how current needs in industry and health align with their operations would be the way to start.

For more information, see The Freedonia Group’s extensive catalog of off-the-shelf research. Each report includes analysis of competitive strategies, including joint ventures and merger and acquisition activity. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Short Term Effects of Coronavirus COVID-19 on the Global Pharmaceutical Industry

March 18, 2020 - The rapid spread of the coronavirus (COVID-19) is projected to continue through the third quarter of 2020 or longer and have a mixed impact on the pharmaceuticals industry. 

During the pandemic, individuals will continue to take prescription and over-the-counter medicines to treat their various health problems and needs. In fact, medication consumption will likely rise, both because of patients taking medications to treat the symptoms of COVID-19 and because the virus imposes pressures on the primary healthcare system and inhibits the access to hospitals and physicians for elective procedures.

However, the supply side faces its own challenges.

  • On March 3, India issued restrictions on the export of 26 active pharmaceutical ingredients (APIs) and the medicines and vitamins made from them, certain antibiotics, the hormone progesterone, and vitamins B12, B1 and B6. This was due to reduced stockpiles of key ingredients sourced from China and the inability to get more. The US and Europe rely on supplies from India.
  • By March 13, suppliers noted that supplies were returning, as import shipments have resumed, with airlifts in the case of high-value ingredients. Still, the restrictions remain in place, with the option to apply for a waiver.
  • China is also a key supplier to the US. US officials are considering ways to increase domestic capacity of such drugs. Others are at least considering ways to diversify supply chains. Still, the need for regulatory oversight makes changes expensive and time consuming.
  • Additionally, US production facilities themselves could be closed or capacity could be temporarily redirected to items crucial to either treating or limiting the spread of COVID-19.

Supply shortages appear to be largely a short-term issue. Though it could encourage production of APIs outside of China, there are a number of issues relating to raw material availability, expertise (or lack thereof), logistics, and government regulation. As a result, changes in supply will have a very slow transition and may not actually shift much in the long run.

For more information, see The Freedonia Group’s Global Pharmaceutical Packaging and US Pharmaceutical Packaging studies, with additional coverage from Freedonia Focus (Pharmaceuticals: United States) and our sister publisher Packaged Facts (Pet Medication in the US). Freedonia Custom Research is also available for questions requiring tailored market intelligence.

What Does It Look Like On the Other Side of “Social Distancing” & Closed Businesses

March 18, 2020 - As we’re all facing or currently operating in conditions of remote work, closed restaurants, limits on large gatherings, and curfews, many start to wonder: what does recovery look like?

The Freedonia Group is based in Ohio, where restaurants and bars closed on Sunday night, K-12 schools closed on Monday, colleges are doing remote learning, the primary election was postponed, and waterparks, movie theaters, and gyms closed as well. Other states are following suit, based on recommendations from the Center for Disease Control.

The Freedonia Group also has an office in Beijing. Reaching out to colleagues there, we find that people are returning to work, but in limited numbers so that people are still not gathered in large groups or in close quarters. Health inspectors make period appearances to ensure that people are not sitting too close together and are wearing the mandated masks.

A number of retail outlets are still closed, as there are few customers out in malls and shopping centers. Reservations are sometimes needed for public transportation to restrict the number of people at given stations.

Some goods – particularly marks – are still in short supply and customers need an appointment to get an opportunity to buy them, kind of like trying to buy tickets for a hot concert. Prices of in-demand goods, including personal electronics like tablets and laptops that enable remote education and work, are up and not likely to see any sales for the foreseeable future.

China is several weeks ahead of the US in terms of development of and recovery from COVID-19, so it seems that the return to normal will likely come in stages and not happen overnight.

For more information, Freedonia Custom Research is available for questions requiring tailored market intelligence.

Industries That Have Grown & Still Present Opportunities in China & Elsewhere Due to the Coronavirus Crisis

March 18, 2020 - Despite closures elsewhere, opportunities for market expansion exist in technology and hygiene:

  1. Online Shopping: In addition to the major online retailers – Taobao and JD – local supermarkets are also starting to operate their own website or apps. They can deliver within two hours, faster than the major retailers because these are often closer to the shoppers’ homes. 
  2. Online Education: Most children didn’t previously take online courses, but now it is all online for the time being. However, parents are concerned about eye strain and the difficulty of learning, as children might be less focused when they don’t have face-to-face contact with teachers. Even subjects like sports, piano, dancing, and drawing – which aren’t considered typical avenues for online learning – are being taught remotely because there is no other option. In many cases, different apps are required for each course, which could lead to greater adoption on a permanent basis, particularly for electives and tutoring that takes place outside of school hours.
  3. Electronic devices (e.g., tablets, laptops, desktop computers) are needed by remote workers and students alike. Families that previously had only one such device to share now find that they need more or versions with larger screens so that the children can study at the same time the parents work.
  4. Online payment: Consumers are encouraged to avoid using cash for the time being because it might carry the coronavirus. Plus, with contact-free deliveries, payment must be made remotely rather than be given to the delivery person. Even older generations are learning how to use these options. This might be the nail in the coffin for cash among many younger people who were already preferring credit/debit cards and mobile payments.
  5. Hygiene Products: Hand soaps, face masks, wipes, hand sanitizers with at least 60% alcohol may see just a short-term increase, but the virus may also cause consumers to develop new habits, as is what happened in areas that were hard hit by SARS.
  6. Medical products, especially forehead/ear thermometers: With increased vigilance, consumers and various businesses and public agencies are checking workers and visitors on a regular basis. These products are more hygienic and faster for testing a lot of people, and are therefore poised to see fast growth.

For more information, see The Freedonia Group’s Industrial & Institutional Cleaning Chemicals, Global Nonwovens, and Global E-Commerce reports, as well as information from our sister published Simba Information (e.g., Electronic Education Report Newsletter). Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Wipes to Clean Your Smartphone & Other Frequently Touched Surfaces

March 11, 2020 - On Monday March 9, Apple issued new guidance for how to clean its devices. The statement notes that 70% isopropyl alcohol wipes or Clorox Disinfecting Wipes can be used on the hard nonporous surfaces (e.g., display, keyboard, and other exterior surfaces). The company cautioned not to submerge the products or allow moisture to get into any openings.

Infection prevention specialists have long noted that smartphones and other such hand-held devices are germ magnets since people carry them with them all the time, pass them among other people, and put them to their faces when making phone calls. As such, wiping down these and other commonly touched surfaces is good practice.

It is reported that wipes and other products that are effective at protecting against colds, flu, and other human coronaviruses are probably helpful against COVID-19 as well. The EPA generated a list of registered antimicrobial products for use against novel coronavirus SAR-CoV-2, the cause of COVID-19. It notes that the registration number, found on the product label, is the more important piece of information to look for when purchasing, since the antimicrobial agent might be used in a variety of products or sold under multiple brand names.

The Freedonia Group National Online Consumer Survey, conducted July-August 2019, found that women were more likely than men to have purchased any type of disposable wipe product at any point in the last 12 months. Women were far more likely to have bought a surface cleaning wipe product, but men had a slight edge on buying antibacterial skin cleaning wipes.  

For more information, see The Freedonia Group’s Wipes, Industrial & Institutional Cleaning Chemicals, Global Disposable Medical Supplies, and US Disposable Medical Supplies reports.

Is the Crude Oil Situation a “Double Punch”, a Two-Sided Coin, or Both?

March 10, 2020 - On Monday March 9, crude oil fell to its worst day since 1991, with the coronavirus hampering demand at the same time OPEC and Russia went into a supply-side trade war. This is the double-punch that hit the energy industry hard and was a big reason for the S&P 500 having its 19th worst one-day drop by percent change and the worst since 2008.

However, there’s a flip side. Crude oil and gas prices are falling, potentially benefiting industrial users and consumers. Not only is industry using less oil as global demand pressures are reduced by curtailed business travel and manufacturer closures in quarantined areas, but Saudi Arabia is increasing supply.

Lower crude oil prices will help chemical producers outside of the US, at least on the raw material side, since there are a number of companies that produce ethylene and other basic chemicals from crude oil instead of from natural gas. However, that will likely not be enough to offset the drop in demand for more chemical end-use products as the effects of canceled events, flights, vacations, etc., ripple their way through the global economy.

Consumers will likely be happy about the lower gas prices. However, with many limiting or delaying travel plans out of real and/or perceived risk of either contracting COVID-19 or being stuck in a quarantine zone in this volatile time, they are not likely taking advantage of it in the way they ordinarily would. A return to higher levels of consumer confidence will be needed for consumers to absorb this higher level of production.

For more information, please see The Freedonia Group’s coverage of Chemicals, Plastics & Other Polymers, and Consumer Goods. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

Pallets: An Opportunity

March 10, 2020 - There’s a lot of talk about the risks of transmitting the coronavirus through personal contact, but there exists another method of transmitting the virus. According to disease experts, coronavirus can remain viable on a surface for up to a day after an infected person makes contact with it. While a number of structures and surfaces are being subject to regular disinfection, the pallets on which the vast majority of consumer goods – including the disinfectant wipes and hand sanitizer being used to treat surfaces – are seldom subject to decontamination, and thus are inadvertently potential sources of infection.

This is a matter of concern, given the key role China plays in the global trade market – everyday, millions of pallets enter and leave Chinese ports and warehouses with goods and materials that are shipped around the world. Given this volume of pallet movement, it is not unlikely that pallets can be a source of potential infection.

Whether a real threat exists – the COVID-19 virus only lasts on smooth surfaces for anywhere from a few hours to several days and ocean shipments from China to the US take a month or more – the perceived fear can be enough to drive people to action. While pallets can be disinfected or sterilized, it is more likely that pallets thought to be contaminated will simply be scrapped and removed from pallet stocks. This will have the potential to boost demand for new pallets, as enough pallets could eventually be removed from trade network that pallet stocks erode. Indeed, if government agencies – such as those in China or the European Union – mandate the removal or disinfection of pallets felt to be contaminated, millions of new pallets will be needed to replenish global stocks.

For more information, see The Freedonia Group’s coverage of the Pallets industry.

COVID-19 & US Plastic Resins – Salt In The Industry’s Wounds

March 9, 2020 - In a recent Plastics News article, watchers of the chemical market give a relatively optimistic outlook for the effect of COVID-19 on plastic resin markets. Market disruptions are described as likely to be “temporary” and to even provide some growth opportunities, such as PET for water bottles and polyethylene for cleaning chemical containers. Additionally, China appears to be recovering from its virus-induced economic shutdown.

However, the coronavirus could hardly come at a worse time for US plastic resin producers. The industry is going through a shale gas-driven building boom, with billions of pounds of new resin production capacity opening in the past few years and billions more in the works. Yet sluggishness in the US manufacturing sector during 2019 dried up demand for plastic resin, raising the question of where all the new capacity is going to go. Sustainability pressures – including bans on single-use plastic products – are also on the rise.

Resin producers had hoped for a rebound in 2020, but instead are faced with another economic shock from COVID-19. While the jury is still out on how severe the economic effects of the virus will be, even a “minimal” or “temporary” downturn is not what the US plastics industry was looking for.

For more information, see Freedonia Group’s coverage of the plastics industry.

Chinese Agricultural Drone Company Is Repurposing its Products to Combat the Spread of COVID-19

March 9, 2020 - XAG, a manufacturer of agricultural robots and drones, has pledged 5 million yuan and has repurposed some of its products to fight the spread of COVID-19 in China. The fund will be used to support the nearly 400 professional operators of XAG drones who have joined the disinfection operation.

Drones provide a number of unique advantages when used for human disinfection, including reducing the risk to operators by limiting the potential for exposure to COVID-19 and disinfecting a wider area more accurately and in less time.

XAG’s drones are particularly well suited for disinfecting rural areas – which present little obstruction – but densely populated urban areas are a challenge for UAVs to operate in effectively. In urban areas, XAG’s R80 robotic utility vehicle proves more effective; it can more easily traverse and disinfect urban terrain than drones, and has successfully demonstrated that it can operate both in and out of buildings.

While still in a limited testing phase, XAG’s demonstrations show that the use of automated vehicles can efficiently provide both air and ground coverage while limiting human exposure to COVID-19.

Creative adaptation of existing equipment and technologies will help businesses thrive as problem solvers in this volatile time.

For more information, see The Freedonia Group’s Global Agricultural Equipment.

Instacart Expands from Personal Delivery by Launching “Leave at My Door Delivery” Feature for Groceries

March 9, 2020 - Mimicking the contactless delivery practice that has become not only popularized, but also required, in many parts of China, Instacart has sped up the rollout of its “Leave at My Door Delivery” feature. The feature had been in the testing phase, but Instacart decided on March 5 to launch the drop-off service option more broadly in response to widespread consumer interest, which is growing on the back of consumer fears about the coronavirus.

Under this option, customers have their groceries dropped at their door at a designated time rather than waiting for a representative to hand-deliver the items. Drop-off delivery is a way to limit contact with people who might carry the virus as well as a way to limit the spread from people who are self-quarantined and concerned that they have it.

However, even after the virus outbreak subsides, contactless delivery is likely to remain a popular option because it gives customers more flexibility and reduces the likelihood of missing a delivery altogether. If you are ordering perishables on a warm day, you will still want to time your deliveries carefully so your ice cream won’t melt – but you also won’t miss out on your delivery completely if you end up stuck in traffic.

For more information, see The Freedonia Group’s Global E-Commerce report as well as Global Food E-Commerce and Online Grocery Shopping from Packaged Facts, our sister publication.

Major Conferences – Including SXSW – are Being Canceled; Effects Will Be Widespread for Attendees & Businesses Throughout Host Cities

March 9, 2020 - A growing number of major conferences, conventions, and other events are being canceled as the coronavirus outbreak spreads. A few major tech conferences – such as Google’s I/O developer event – are moving to digital-only formats and canceling the in-person side.

Conference and other event organizers will lose out both on the planned income and – most likely – any money already spent on developing and promoting the event, since most are refunding tickets and admissions. Those who had planned to attend these conferences and conventions will suffer from reduced chances to network, collaborate, make sales, and learn about new products and processes.

Such cancelations have a broader economic impact in host cities, as businesses from hotels and restaurants to local event planners and transportation providers lose revenue opportunities. Cities will also lose out on the bump in tourist activity and the resulting exposure of business people traveling to their city. Organizers of South by Southwest say Austin area businesses took in $335.9 million in business associated with the 2019 edition of the event.

Even when events do take place, attendance will be down given how many major companies are barring or sharply curtailing business travel. Meeting Professionals International, and industry association, is providing additional guidance for planners and suppliers in this changing business environment.

 Freedonia Custom Research is available for questions requiring tailored market intelligence to better understand our changing market conditions.

Coronavirus Concerns Causing Starbucks to Temporarily Eliminate Beverage Service in Reusable Cups

March 5, 2020 - In January 2020, Starbucks announced a new set of sustainability goals through 2030, which included further movement from single-use to reusable packaging. This shift includes cups as the company has been both participating in the NextGen Cup Challenge and giving customers $0.10 discounts if they bring their own cup or request to use a reusable ceramic mug in-store.

However, Starbucks, which is headquartered in Seattle where a virus cluster has resulted in 10 reported deaths related to COVID-19 to date, announced on March 4 that it would be suspending the use of reusable cups as part of its efforts to respond to the public health crisis. This move is framed by Starbucks as temporary, and the reusable cups will be back when the outbreak dissipates.

The impact, although temporary, is not insignificant. This is a speedbump on the path toward getting Starbucks customers – and others – to change their habits, something that is needed for greater adoption of reusable cup policies.

Still, foodservice businesses are expected to increasingly consider more sustainable packaging options (e.g., fiber-based, recyclable, compostable, and reusable products) for cups, lids, and carryout containers in the coming years.

For more information see The Freedonia Group’s Foodservice Single-Use Products report.

Possible Construction Supply Shortages?

March 5, 2020 - Developers are starting to wonder about the impact of COVID-19 on their ability to complete existing projects or to begin new large projects.

US and European contractors rely heavily on Chinese imports for building products ranging from steel to wiring to cabinets. Work stoppages at China’s manufacturing facilities and ports have constrained supplies for building products, leading to delays in the receipt of crucial materials that were not shipped prior to major shutdowns.

Financial fallout for both contractors and customers is expected, although the total impact will vary significantly based on the duration of the outbreak. Although major projects purchase the supplies they need well in advance and therefore may not be effected, others may not be so lucky.

In the meantime, firms are looking for alternate supply channels – both in the US and outside of China – even though they are more expensive. Additionally, contractors may be looking to buy up available supplies in order to have a stock on hand, which would drive prices up even further. Overall, these behaviors drive up prices and shift demand.

As a result, even construction material firms with adequate domestic supplies available to sell might be challenged by unpredictable sales trends that contradict typical seasonal patterns.

For more information, see The Freedonia Group’s extensive collection of reports on the Construction & Building Product industries.

Indoor Air Quality: HVAC Systems & the Coronavirus

March 5, 2020 - The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHARE) has published resources on how building HVAC systems can properly combat airborne infectious diseases, including a dedicated webpage that provides proactive guidelines for building industry professionals concerned about COVID-19. 

Keeping indoor air quality high and having proper air circulation and ventilation are extremely important in reducing a person’s risk of contracting viruses like COVID-19, especially in high-risk areas like healthcare facilities. ASHARE recommends a two-step approach: exhausting air out of the building, and cleaning air within the building with filters and by circulating clean air from outside.

Filtering air, however, is not by itself an effective in reducing the transmission of COVID-19. Many commonly used air filters, such as many types of HEPA filters, are only rated to capture particles 0.3 microns or larger. Coronaviruses, on average, are 0.1 microns in size and may not be captured by an air filtration system. To be effective, any system that incorporates filtration fine enough to capture such small particles will still require additional power to overcome the pressure drop involved in pushing air through smaller pore sizes and to be designed so that air does not leak past the filter.

Furthermore, the virus will continue to live on the surface of the filter for a time, so extra care must be taken by those changing the filters. Which all comes back to the core recommendation: wash your hands often, and do not touch your face!

For further information, see Freedonia’s reports HVAC Equipment, Global HVAC Equipment, Global Filters, and Consumer Air Treatment Systems in the US.

COVID-19 & the US Pet Industry: Initial Reports

March 5, 2020 - Addressing the health of pets and their owners in relation to the novel coronavirus outbreak, the Centers for Disease Control and Prevention (CDC) recommends that those infected with COVID-19 avoid contact with pets and other animals. This position gained force today with news reports that the dog of an infected owner in Hong Kong is “now believed to be the first case of human-to-animal transmission.” 

Nonetheless, and even though COVID-19 “seems to have emerged from an animal source,” the CDC advises that there is no evidence that pets themselves can spread COVID-19 to humans – a point reiterated by the American Veterinary Medical Association (AVMA) in its coronavirus bulletin.

On the pet medications front, according to the FDA’s February 27, 2020, Coronavirus (COVID-19) Supply Chain Update, veterinary pharmaceuticals or pharma ingredients sourced from China “soon could lead to shortages.” 

On the pet food side, there have been reports of in-store signage attributing out-of-stocks to coronavirus-related shipment delays.

For pet products as for many consumer markets, supply chains often link to China. Any disruptions from shutdowns in China are likely to be amplified by pet owners stocking up against shortages. Challenges for the US pet industry may deepen unless suppliers in China return quickly to full capacity operations and supply chains are restored.

See the Packaged Facts website for more information from our sister publishing brand’s extensive coverage of the pet industry.

US Federal Reserve Makes an Early Rate Cut

March 4, 2020 - On March 3, 2020, the US Federal Reserve cut its target interest rate by 0.50% to 1.00%-1.25%. The move was the first to occur outside the regularly scheduled policy meetings that take place every 6 weeks since the 2008 economic crisis. The Fed did not want to wait as concerns about the spread of the coronavirus in the US caused strong volatility in the US stock market. The move signals that the bank will take rapid, significant steps to counter effects of the virus on the economy. If it continues to spread, consumers and companies may limit gatherings and unnecessary interactions, which will reduce consumer activity as well as economic output in the markets they support.

Reduced interest rates could help many sectors. For instance, borrowing funds to buy a house, a car, or other large durable goods will be less expensive. In addition, companies will be able to obtain lower-cost loans to help them through a period of reduced economic activity or supply chain difficulties. However, the lower interest rates might hurt the banking industry, as commercial banks generate a significant portion of their revenues from interest on loans.

For more information on these sectors, see the relevant publications from Freedonia Focus Reports: Air Transport Services: United States, Commercial Banking: United States, Housing: United States, Motor Vehicles: United States, Recreation: United States, Restaurants & Foodservice: United States, and Water Transport Services: United States.

Can More Open International Trade Ease the Impact of COVID-19

March 4, 2020 - Much of the economic impact of the COVID-19 coronavirus deals with its disruption of international trade. Global supply chains are intricately linked, expertly optimized, and – as a result – often inflexible in the face of disruption. These fragile international linkages, key to the modern economy, are the reason why most economists predict that the coronavirus will have a much larger negative impact than the SARS outbreak in 2003.

In an article, Bloomberg Economics looks at the flipside – how can international trade help ease the economic impacts of the coronavirus? Remedies such as reducing tariffs and increasing international coordination would help grease the wheels of trade and mitigate the downside to the virus. But in today’s atmosphere of divisive, confrontational politics, hoping for greater international cooperation and easing of tensions may be a tall order.

Supply Disruptions in the Chemical Industry: China Is Coming Back Online, but What’s Next?

March 3, 2020 - Chemical & Engineering News reports that chemical production in China is beginning to recover from the COVID-19 coronavirus. Many chemical plants that were closed in January and early February have reopened. 

However, most chemical plants are running at reduced capacity, and Western firms are still feeling pressure in their supply chains. The uncertainty mimics a similar situation that occurred in 2017 and 2018, when environmental pressures forced the extended shutdown of numerous plants in China, resulting in shortages and high prices for specialty chemicals such as silicones.

Even if China’s chemical industry is getting back to business, the spread of the virus outside of China is increasing worries that further disruptions could be on the horizon.

For more information, see Freedonia’s Global Silicones, Global Rubber Processing Chemicals, and Global Construction Chemicals reports.

3M & Others Expand Production of N95 Respirators & Related Masks

March 3, 2020 - Surgical masks, exam masks, and N95 respirators are in high demand as ways to limit the spread of COVID-19, the novel coronavirus. However, supplies have been hampered by insufficient production capacity and manufacturing closures in areas that are seeing high incidence of the disease.

However, help is on the way. Businesses in China have already converted their operations to the production of masks. Additionally, key mask suppliers such as 3M are responding by having existing staff work additional shifts as they move from a 5-day week to a 7-day week at some plants, as well as by fast-tracking hiring processes and increasing automation where possible.

Still, the rising need for these items as the disease spreads is going to mean that such measures are unlikely to let up any time soon.

For more information, see Freedonia’s Global Medical Disposable Supplies and Disposable Medical Supplies in the US reports.

Retail Stores Are Starting to See Runs on Emergency Supplies: Who Needs a Mask?

March 2, 2020 - This past weekend, consumers in parts of the US started seeing empty shelves and a lack of stocks in key supplies. Even as the US Surgeon General is reminding people that they do not need a mask and that masks are not as effective as you hope, nervous consumers are willing to ignore that advice for just one more layer of real or perceived security against the COVID-19 novel coronavirus.

The trouble is China – which has seen many businesses close since COVID-19 appeared in December – is the source of nearly 20% of the world’s disposable medical supplies, including masks. Therefore, supplies are not likely to increase rapidly until the need for these products in China and abroad is reduced or domestic suppliers are able to ramp up production sufficiently.

In the meantime, consumers who still want to buy masks will compete for the remaining supplies with professionals – including first responders and medical personnel – who need them for their daily operations.  

For more information, see Freedonia’s Global Medical Disposable Supplies and Disposable Medical Supplies in the US reports.

If You Are Quarantined, Will the Delivery Economy Save You?

March 2, 2020 - As quarantined and other concerned people in China learned, food delivery is a life saver if you can’t – or feel like you shouldn’t – leave your home. This has led to innovations like contactless delivery, where the couriers drop the food at a specific location from which customers then pick it up without ever coming face-to-face, and has even prompted robot deliveries.

With the news that patients infected with the COVID-19 novel coronavirus have been found in US urban areas, including NYC, residents are considering how tech can help them, too. Local public health agencies and companies that employ gig delivery workers are developing guidance for how to maintain worker and public safety in such situations.

Still, if companies have a hard time finding enough healthy workers or if people are too nervous about an encounter with their delivery person, autonomous delivery robot developers such as Starship and Nuro may see rapid acceptance.

For more information, see Freedonia’s Global E-Commerce report as well as Global Food E-Commerce and Online Grocery Shopping from Packaged Facts, our sister publication.

Share on Facebook