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.

Refrigerated Grocery Pick Up Lockers Can Increase Efficiency Amid Worker Shortages

In a labor market where workers can be hard to come by and customers still have high expectations for quick service, retailers must get creative.

Although pickup lockers have been used by Amazon and others as a convenience, especially in urban areas, these lockers are not climate controlled. However, the rise of curbside pickup for grocery is making the need for refrigerated lockers increasingly important.

As processes exist now in most places, curbside grocery pickups have to be timed so that there are workers available to collect the groceries shortly before the consumer picks them up in order to limit the time the perishable food is away from refrigeration. Some stores have made florist coolers or newly constructed refrigeration areas near that door a place to keep collected groceries. However, space is still usually limited.

In some instances, consumers hoping to collect orders during peak periods have to wait a long time in the parking lot, get a message that they will not be able to get their order that day, or have to schedule pickups for a less convenient off-peak time. The use of refrigerated grocery pickup lockers would allow more workplace flexibility, as workers could collect the orders when time allowed and more orders could be collected at the same time without waiting for a worker to be available to bring it outside to their car.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Commercial Refrigeration: Food Retail Market. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Food & Beverage    

Cummins & Meritor: Sustainability & Expected Growth of Electric Heavy Trucks Drives Acquisition

This week, the major engine manufacturer Cummins announced it will be acquiring Meritor, a leading supplier of vehicle parts. Executives say expected growth in electric heavy vehicles and the need to lead in this area was the key to this purchase.

The two companies are doing complementary research and development. Cummins is developing electric power trains, and Meritor is developing components for electric trucks, such as axels which have integrated electric motors.

Since it is often less expensive and easier to acquire needed technology than to undergo in house R&D or purchase the technology from a third supplier, expect to see more acquisitions relating to sustainable technologies, particularly among companies with complementary pursuits.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including the update of Global Hybrid & Electric Vehicles which is in progress now and Global Medium- & Heavy-Duty Trucks & Buses and Medium- & Heavy-Duty Trucks & Buses: United States from Freedonia Focus. Freedonia Custom Research is also available for questions requiring tailored market intelligence


We Bought All the Stuff… Is the Services Economy Our Next Spending Boom?

During the pandemic years, consumers couldn’t travel or go to large events, so spending switched from what had been an economy of experiences to an economy of stuff. We bought stuff to entertain at home, create a home office, make home cooking more fun and more efficient, make our pets comfy, workout at home, etc.

Now that many of us are vaccinated and the wave of infections from the Omicron variant has eased, are we ready to go on vacation?

While 75% of respondents to the October-November edition of The Freedonia Group National Online Consumer Survey noted that they were somewhat or very concerned about the current and future variants of the COVID-19 coronavirus, consumers are increasingly acting as if they are not concerned. While not all are traveling or going on vacation now, more people seem to be seeing the light at the end of the tunnel (or at least a willingness to see things as set for now) and are increasingly eating out, planning vacations, concert attendance, weddings and family reunions in the coming year.

This could result in reduced spending on our homes, yards, pets, etc. Of course, with work-from-home still common in many parts of the economy, there will still be call to buy what we need/want to keep our homes comfortable and functional.

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

  Consumer Goods      Industry Studies    

Everything Old is New Again… Refillable Beverage Containers

Americans used to live in a world with milk bottles that were delivered full and collected empty. Americans used to live in a world where glass beverage bottles were collected and returned for a deposit and then refilled.

There are still parts of the country and certain local milk processors, breweries, and soda pop suppliers that work with glass bottles which are meant to be used and then returned, washed, and refilled for the next customers.

Major beverage suppliers have long switched to single-use beverage containers, which are meant to be recycled but not reused in its same form. However, recently Coca-Cola announced that it would have a quarter of its drinks sold globally in refillable packaging by the end of the decade. Outside the US, the company is also on the way to this goal by using its “universal” plastic bottles designed to be reused by Coke, Fanta, and other Coca-Cola beverage brands after cleaning and the application of a new label.

Reusable plastic bottles don’t have the same long life of glass bottles which can be reused five times before being melted down to make new glass bottles. However, the light weight and unbreakability of reusable plastic bottles has other advantages for sustainability of good customer experience.

The challenge is making sure the needed infrastructure is in place to collect, store, track, and wash resuable bottles or other containers. As TerraCycle’s Loop program and others expand and proliferate, that infrastructure will be more readily available with perfected processes.

Of course, regulations will play a key role in developing a functional resuable container program again…from bans of single-use packaging types to extended producer responsibility plans to container deposit mandates. Of course, increasing attention from investors who are holding companies to verifiable sustainability targets will provide another layer of pressure. In the end, there needs to be a business case for these programs to spread more widely, with cost advantages and consumer preferences making the move undeniable.

Ultimately, previous generations lived in a less disposable world…it can happen again.

Freedonia analysts will continue to monitor these trends in consumer preferences, governmental regulations, and business sustainability goals and targets as well as the variety of other factors that impact packaging trends.

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

  Consumer Goods      Packaging    

Wood You Believe It? Lumber Prices on the Rise Yet Again

The cost of lumber in the US reached its peak in mid-2021, as a misreading by lumberyards and homebuilders of the impact of COVID-19 on consumer behavior led to a shortage of lumber and prices triple those seen in early 2020. The situation was exacerbated by COVID-related supply chain issues and tariffs on softwood lumber imports from Canada. This greatly increased the cost of new home construction (around $36,000 per home, according to the National Association of Home Builders) and home renovation projects, which became especially popular among the vast amount of households stuck at home during the pandemic.

Lumber costs finally fell in the summer of 2021, as DIY-inclined homeowners grew fed up with sky-high lumber costs and postponed their renovation projects. While lumber costs remained well above pre-pandemic levels, there was some sentiment that the market had stabilized enough to avoid further short-term price spikes.

Well, that lasted a few months. In 2022, lumber prices are again shooting up, and as of February 17, are nearly three times the levels seen as recently as August 2021. This latest jump on the trampoline is caused by a variety of factors, such as:

  • the November decision by the US Commerce Department to double its tariffs on Canadian softwood lumber imports to nearly 18%, despite the inability of domestic sawmills to meet US demand
  • damage caused to Canadian forests by a plague of mountain pine beetles and a strong wildfire season
  • labor shortages for sawmills that contribute to output lagging new home demand
  • broader inflationary pressures impacting operating costs

Are there reasons to believe that lumber prices will regress in the near-term? A receding of the Omicron wave could help ease labor and supply chain issues. Additionally, the Commerce Department could ease its tariffs on Canadian softwood lumber imports (as it did in 2020), which run contrary to both President Biden’s trade policy criticisms while running for president and his administration’s affordable housing goals. Lumber demand, in the meantime, will remain high.

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