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.

40th Anniversary of the Tylenol Murders: A Packaging Perspective

It is sometimes quite useful to look backward, even in this blog about looking forward.

This fall is the 40th anniversary of the Tylenol murders, when someone took Tylenol off the shelf, laced the capsules with cyanide, and returned them to the shelves in the Chicago area. Ultimately, 7 died, but the whole national was put on edge. Looking at it from a business perspective, not only is the tragedy an example of how fortunes can change quickly and suddenly for a market leader, it also shows how companies and whole industries can adapt quickly to change how they operate, sometimes permanently.

In this case, two industries – over-the-counter medications and packaging – changed quickly and forever.

OTC pharmaceutical companies developed a new product form (the solid “caplet”) that was designed to be harder to tamper with than the old capsule designs but just as easy to swallow compared to the leading alternative then – uncoated tablets.

The packaging industry quickly developed and added glued boxes, shrink wrap neckbands, and peel-back foil as an inner seal among other tamper evident measures. The FDA announced guidelines on November 5, 1982, and suppliers of capsule and liquid drugs were given three months to comply with new packaging, a nearly unheard of time frame for such a major repackaging effort. Although some packaging was a preliminary option meant to be functionally sufficient until the companies worked out a version that was optimal in terms of cost and appearance, all met the deadline. In fact, the first tamper-evident Tylenol packages were on the shelf by the fifth week after the deaths. All other types of drug products – presumably those less susceptible to poisonous tampering – and all imported drugs were given longer time lines, with all needing to meet tamper evident packaging guidelines by February 1984.

This is an example of rapid change that was permanent. We saw a lot of rapid shifts in the COVID-era and wonder how many are sticky trends. Changes that are most likely to become permanent include those where companies had to make significant investment in the change, where the need for the change remains high, and where there are other reasons to continue the change (e.g., consumer convenience).

Freedonia analyst will continue to watch for historical parallels, market disruptions, and the potential stickiness of industry and consumer change.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in the packaging industry.Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Industry Studies      Packaging    

Sustainability in Power Tools: Improving Circularity With Materials

Sustainability, particularly via reducing use of virgin plastics, is a big part of many companies’ ESG (Environmental, Social, and Governance) plans and pledges.

Although many companies look at their packaging and processes and stop there, others like Stanley Black & Decker are considering the materials used to make their products. Stanley Black & Decker recently launched its reviva power tool brand, a product line that features tool housing that is made with 50% recycled material. The sustainability move is threefold and considers all stages of the product’s lifecycle:

  • Stanley Black & Decker partnered with Eastman to develop tools with housing made from Eastman’s TritanRenew
  • Each tool is sold in packaging that is designed to be recycled curbside or used as a storage box.
  • The company partnered with TerraCycle to allow its products to be returned for recycling at the end of their useful life.

As The Freedonia Group National Online Consumer Survey conducted in May 2022 found, these moves are incredibly important to consumers. 80% of respondents agreed it is important to recycled everything they can. Additionally, 66% of respondents noted that they actively seek to minimize the amount of unrecyclable waste their household generates. Sustainability actions taken by consumer goods companies can have major impacts as more consumers seek to reduce their household waste and encourage – with their buying patterns – companies to do better with eco-friendly products and measures.

Freedonia analysts continue to watch changes in consumer sentiment in sustainability areas and keep on the lookout for innovations and potential innovations where companies can seize opportunities.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially Power Tools, Global Power Tools, and Home Improvement Consumer Insights 2022. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Industry Studies    

Back to the Office…Productivity Needs & Desire for Privacy in the Office Clashing With the Return-to-Office Perks?

Now that more people are used to the privacy of working from home, what adjustments are workers asking for as they return to the office?

Love them or hate them, but after decades of expansive open-concept designs at home and at work, walls are back. In this case, cubicles! Cubicles and semi-private seating where desks are separated by low partitions are making a comeback. Design trends aren’t necessarily toward the “cube farms” of the ‘80s and ‘90s, but something in between that and the “open office” designs with few or no walls. In this modern version, private spaces (cubicles and phone rooms) exist alongside of semi-private spaces (low walls or desks tucked into corners) and open spaces intended for collaboration.

And why do they want to close doors or “hide” from colleagues? Returning to the office also means returning to chatty colleagues, in-office client visits, and noise from perks such as video games and new coffee and snack stations, which might make heads-down, high concentration work more difficult. In that vein, more employees are looking for ways to signal to colleagues when they are available for questions and collaboration (the benefit of in-office work) and when they are not. Doors and walls can help, but some get more creative with color-coded lights, posted signs, or other indicators. Others – including me – use headphones, whether with music and noise cancelling engaged or not, to signal openness to conversations.

Freedonia analysts continue to watch factors such as the employee preferences, changes in design trends, commercial real estate activity and others to see how the office of the future will affect where and how we work.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in our construction segment and additional titles such as Work-From-Home Consumer Insights, and Freedonia Focus reports such as Office Furniture: United States, Real Estate: United States, and Office Construction: United States. Additional related reports include Office Coffee Service from our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Back to the Office…in the Suburbs?

With more employees resistant to long commutes after a few years of no commutes in the peak of the pandemic era, commercial real estate trends are shifting. While vacancy rates rose sharply in suburban office parks in 2020 and 2021, interest in putting offices closer to where their employees live is driving the more companies to reconsider the suburbs.

In the second quarter of 2022, brokerage firm CBRE Group noted that downtown office vacancy rates in the US surpassed the suburban vacancy rate for the first time in decades. The company noted that vacancy rates in the suburbs fell slightly to 16.8%, while it rose to 17% in city centers.

Still, it’s not just any suburban office that is seeing improvements in vacancy rates, it’s the newer modern offices close to residential neighborhoods, restaurants, and other amenities. Office facility owners that don’t yet fit that description could see better occupancy and higher rents with renovations such as contemporary design, flexible furniture and work spaces, and the addition of technological features designed for pod casting and remote or hybrid meetings. Additional benefits could come from developers reworking dedicated office and light commercial parks into mixed-use development with retail, foodservice, and residential offerings as well.

Freedonia analysts continue to watch factors such as the employee preferences, changes in design trends, commercial real estate activity and others to see how the office of the future will affect where and how we work.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in our construction segment and additional titles such as Work-From-Home Consumer Insights, and Freedonia Focus reports such as Office Furniture: United States, Real Estate: United States, and Office Construction: United States. Additional related reports include Office Coffee Service from our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


The Electric Conversion: France is Offering €4,000 to Those Who Trade Their Car For an E-Bike

In a continuation of a decade-long trend, the use of e-bikes surged in many parts of the world during the COVID-19 pandemic. This happened despite disruptions to supply chains that often resulted in delivery delays or price increases.

Governments have built on the recent rise in interest by offering incentives to consumers to replace gas- or diesel-powered motor vehicles, motorcycles, and scooters with e-bikes. These programs are motivated by the need to address air pollution levels, traffic issues, and climate change challenges. The incentives to switch from motor vehicles to greater use of e-bikes is also targeted to help meet future emissions reduction targets.

Most recently, in August 2022, France increased the subsidy offered to individuals that replace conventional motor vehicles with e-bikes to 4,000 euros as part of efforts to increase the sustainability of transportation. The subsidy – based on a program carried out in Lithuania – was initially adopted in 2021. It was subsequently increased in 2022 because levels of e-bike use in France on a per capita basis continued to lag behind that of neighboring countries such as Germany, the Netherlands, and Belgium.

The French government hopes to see the number of people that switched to bicycles and e-bikes to reach 9% in 2024, compared to 3% in 2022. This policy will be complemented by an increase in the length of bike lanes in the country.

Freedonia analysts continue to watch factors such as the spread of incentives, expansions in production capacity, improvements in battery technology, related infrastructure development from bike lanes to charging stations, and consumer sentiment about sustainability issues for direct and indirect effects on the electric transportation industry.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in transportation-related industries with titles such as Global E-Bikes, Global Motorcycles, Global Hybrid & Electric Vehicles, and Bicycles: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Consumer Goods