US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Is Drive-Through & Curb-Side Pick-Up the New Normal for Food & Retail?

As the pandemic drags on, there is evidence that at least businesses think that consumer behaviors will be changed for the long run.

First, we’re seeing more quick-service restaurants investing in changes to their facilities to make drive-through and carryout more efficient. Measures include

  • expanded drive-through lanes
  • dedicated parking spaces for picking up online orders
  • on-site pick-up “lock boxes” activated by QR codes or other app functions
  • technology that improves customer communication and enables orders to be produced faster

Second, cities are grappling with what do to about the tension between pick-up lanes, outdoor dining, and the need for parking as customers return to on-site shopping and dining. Early on, cities improvised by removing parking fees and allowing businesses to claim spots in front of their businesses for pick-up zones. The lack of dine-in options plus the rise of delivery services such as Uber Eats, DoorDash, and Grubhub propelled this need. Others converted parking spaces into outdoor dining or shopping areas.

While some cities are keeping these conversions and see them as the future of their business districts, others are converting back to conventional municipal parking spaces. The middle ground seems to be options such as limited time parking spaces dedicated for those picking up orders and parking spaces with free time for 10 to 15 minutes.

For more information about trends and opportunities, see The Freedonia Group’s coverage of the packaging industry as well as food and beverage research from sister publisher Packaged Facts, including reports on Food Carryout & Delivery, Food Carryout and Delivery: Special COVID-19 Consumer Insights, Foodservice Single-Use Products, Global Foodservice, Global Foodservice Single-Use Products, and Retail Bags. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Packaging    

A Shortage in Cans for Food & Beverages: Why? Will It Last? What Are the Alternatives?

Sales of canned food and beverages have boomed in the pandemic era for a couple of main reasons:

  • Stocking up. Canned goods have a long shelf life and are easy to stack in pantries and cabinets. As families looked to limit their grocery trips, gather more food to feed everyone at home, and create easy semi-homemade meals, sales of canned goods took off.
  • Switching from restaurant to home consumption. Cans are more widely used for beverages purchased for consumption at home compared to those bought at restaurants and otherwise away from home. In many restaurants, soft drink concentrate and carbonation and kegs of beer are more common than individual cans.
  • Eco-friendly. Both aluminum and steel cans have higher recycling rates than plastic and glass packaging, and cans are lighter and seen as stronger than glass alternatives.

Will it last? To some degree, yes. Beverage packaging has been migrating to cans over plastic and glass bottles for quite some time because of factors such as the environmental profile. However, at some point the bulk consumption in restaurants and events will return as the pandemic eventually ebbs and the rush to cans will be somewhat alleviated.

What are the alternatives?

  • Some food products – including beans and other vegetables – are starting to be offered in shelf-stable pouches. Single servings of smooth food such as applesauce and baby food had already migrated from jars to pouches, and microwave-ready rice and other grains are increasingly appearing on shelves in pouches. These are lightweight, convenient packaging options that can include a convenient cook-in-package format. However, this is a more expensive packaging option and few pouches are designed to be recyclable at most municipal facilities at this point.
  • Plastic bottles and jars. These are often recyclable and light weight. Many are also offered with recloseable lids or caps. These are used for beverages and are increasingly used for shelf-stable fruit and sometimes vegetables.
  • Glass bottles and jars. Glass options are not always recyclable, and they are more expensive and prone to breakage during shipping. However, there is a high-end appeal to glass packaging, as consumers can often see the product clearly and the heavier weight makes the product feel substantial and protected. Additionally, glass is inert and consumers concerned about chemicals leaching into their food or beverages gravitate to glass.

Of course, home production is another option for beverages as small but growing number of consumers have also sought to minimize packaging by using products such as Soda Stream to make their own carbonated beverage. However, the needed CO2 canisters are in short supply in many places as well.

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

  Consumer Goods      Covid-19      Food & Beverage    

High Lumber Prices Pose Threat to New Housing Market

As reported multiple times on this site, the home improvement and new single-family housing markets – and, to some degree, the construction market overall – have been sources of economic strength during the COVID-19 pandemic. A general shortage of housing in the US, coupled with rising interest among city dwellers in moving to the suburbs (and beyond), has spurred home builders across the nation to complete residences as quickly as possible.

However, this surge in home building activity has been threatened not by the coronavirus, but by something that has proven to be as difficult to control: rising lumber prices (a trend that has also been well-chronicled on this site).

This sharp rise in framing lumber prices – up 130% in the last four months  – has added tens of thousands of dollars to the costs of building a residence, which in turn is passed on to the consumer. These rising costs – estimates place the increase at about $16,000 per home ­ – may price new homes out of the range of many buyers’ budgets, seeing as they may be suffering economic losses of their own, such as due to unemployment or reductions in  wages related to the various “shelter-in-place” orders issued by many state and local governments. Other builders will work to keep homes affordable by erecting smaller residences with fewer amenities (such as crown molding or decks) that can be sold at lower price points. However, some buyers might not be interested in these residences, preferring instead to wait until a home that meets their wishlist and their budget becomes available.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in Construction and Building Products. Freedonia also offers 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.

Disinfecting Wipes Capacity Expansions Planned

Rockline Industries, a major supplier of private label wet wipes, announced it would be installing a $20 million production line to double its capacity to produce disinfection wipes. The equipment is custom designed by their engineering team and will be in operation by mid-2021.

The company noted that this investment was forward-looking. Randy Rudolph, president of Rockline Industries said, “We are making a huge investment in the future by installing the Galaxy line to ensure that our customers will be able to meet consumers’ increasing demand for disinfecting wipes.”

This is yet another industry response to try to increase disinfecting wipes capacity, something that it has been challenged to do since the pandemic took off globally. Leading suppliers had already noted that they didn’t expect to be able to adequately fulfill consumer demand for these products until 2021. Investments such as these are indications that suppliers believe that elevated demand for disinfecting wipes will remain high for the long term, outlasting the need associated with the current pandemic.

For more information and a discussion of opportunities, see The Freedonia Group’s COVID-19 impact reports on Surface Disinfectant Wipes and Global Industrial & Institutional Disinfectants & Sanitizers. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Chemicals      Consumer Goods      Covid-19      Textiles & Nonwovens    

Smart Vending Machines: The Touchless Future in On-Demand Foodservice is a Robot

Regional grocery store Heinen’s is an early adopter of Chowbotics’ product Sally, a salad making robot. Initially positioned as a way to make fresh food (e.g., salads, grain bowls, breakfast bowls) available as a grab-and-go option in hospitals, colleges, and other institutional settings. However, the grocery market took on a new urgency as the coronavirus pandemic drove consumers away from self-serve salad bars and as consumers flocked to grocery stores instead of restaurants.  

While many grocery stores switched to offering pre-made salad options, others turned their self-serve bars into a full-service option with staff making customized salads on-demand. However, Sally gives stores a chance to offer a touch-free solution to consumer demand for quick customized salads or similar meals while allowing staff to concentrate on other tasks. The customization is important as many consumers prefer choosing their own toppings – e.g., no croutons or extra croutons, light or heavy dressing, nuts or no nuts, and amounts of pungent items such as onions and peppers.

Chowbotics is also developing a fully touch-free innovation that would allow customers to order via an app and scan a QR code at the machine to have that exact order produced.

For more information on discussion of opportunities, see Packaged Facts’ Food & Beverage industry coverage, including Food Carryout & Delivery and Food Carryout & Delivery: Special COVID-19 Consumer Insights and The Freedonia Group’s analysis of the packaging industry, including to-go containers in Foodservice Single-Use Products and Global Foodservice Single-Use Products. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage      Industrial Components      Machinery & Equipment