10 days ago | FMCG
COVID-19 Impact on Tissue Paper in the FMCG Industry
COVID-19 Impact on Tissue Paper in the FMCG IndustryCOVID-19 pandemic has influenced the whole planet with its major impacts on the economy and businesses across the globe. The COVID-19 spread worldwide in unprecedented ways due to its high infectious and contagious nature and lack of availability of its vaccine. As a result, the greatest medical challenge in the 21st century is yet to be faced by physicians worldwide. Though the emergence of the virus can be traced back to Asia, many European countries along with the U.S. have been struck massively by the pandemic. The virus has spread across all regions ranging from North America, Europe, Asia-Pacific, Middle East, and Africa up to South America. The COVID-19 has been declared as a pandemic by World Health Organization (WHO) due to its increased spread across the globe. After the declaration of the pandemic, various countries announced the complete lockdown such as India, China, and other Asian countries to decrease its spread. According to the latest situation report by World Health Organization (WHO) stated 175 million cases of Corona have been reported globally and 5 million patients are dead due to the coronavirus. On a slightly positive note, a total of 160 million people have recovered and a total of 5 million vaccine doses have been administered as well.The global tissue paper industry has witnessed major developments over the past couple of years due to advancements made in the manufacturing of tissue papers. Tissue products are practical and hygienic, lowering the danger of communicable illnesses. Tissue products are a sustainable option since they are made from fiber derived from certified, sustainably managed forests or recycled paper.Tissue products are useful for hygiene and cleaning. Tissue papers when used for hand drying, paper towels assist to minimise the number of germs on hands and the transmission of bacteria. Using tissue products for personal hygiene can help prevent illness from spreading. Napkins, bath tissue, feminine care items are different types of products related to tissue papers.The recent outbreak of COVID-19 had a positive impact on the tissue paper market as there was an increased demand for tissue papers and toilet papers in several European, North American, and South American countries.IMPACT ON DEMAND The novel COVID-19 outbreak led to a considerable rise in the demand for tissue papers and toilet papers. In the initial days, people were severely threatened by the COVID-19 pandemic and were more inclined to hoard toilet paper in the early days of the epidemic.Data from Georgia-Pacific, maker of the Angel Soft and Quilted Northern brands, shows that the average American household, which consists of 3 people, uses about 409 rolls of toilet paper a year. In reality, there was never an actual scarcity of this product, especially because several nations, including the United States, are self-sufficient in it. The reason for the mass panic is unknown, although it is considered to have started in Australia following the country's first verified death from COVID-19, and in Hong Kong, it was sparked by internet rumors concerning the supply chain. When the supply of toilet paper caught up with the short rise in demand, the fear faded.Sales of toilet paper increased by up to 700 percent from February to March 2020 as the new coronavirus spread over the Western Hemisphere. In March 2020, the world was gripped by the Great Toilet Paper Shortage of 2020, as people rushed to stockpile toilet papers.For instance,In America, people were seemed to be stocking up substances for days. But the fear of the coronavirus set up after former president, Donald Trump declared a national emergency. Along with toilet paper, pasta, and meat, bottles of virgin olive oil also flew off the shelvesIMPACT ON PRICE The tissue paper and its supplementary product prices were impacted due to COVID-19 up to some extent. Factors responsible for it were a rapid rise in demand during the epidemic, individuals demanded more toilet paper. Consumer toilet paper and commercial toilet paper are the two markets in the hygiene paper business.With people staying at home because of business closings and shelter-in-place orders, the demand for consumer toilet paper was skyrocketed while the demand for commercial toilet paper was reduced.For instance,In March 2021, Kimberly-Clark Corp said that it would raise prices on many of its products including Scott toilet paper, tissues, and diapers in the United States and Canada to offset rising commodity costsThe company saw its products roll off supermarket shelves as shoppers stockpiled essential staples ahead of curfews and lockdowns to stem the spread of COVID-19.IMPACT ON SUPPLY CHAIN The government throughout nations imposed total lockdown which led to supply chain disruptions. Consequently, the supply chain came to standstill due to the closure of borders. Even though the demand for these products was high, the availability was affected due to disruptions in the supply chain, trade, and travel restrictions. Supply of raw material was also affected, due to which the production was restricted.Since the outbreak of the COVID-19 pandemic, tissue manufacturers in the United States have worked hard to meet demand by increasing production, improving operational efficiency, and collaborating with supply chains to get more goods to end-users. In 2020, American tissue producers set new production records and exported more tissue than ever before. The industry has continued to function safely and reliably, 52 weeks a year, to satisfy the demands of customers for vital productsFor instance,AF&PA (American Forest & Paper Association) members supplied more than 22,000 short tonnes of parent roll tissue each day in February and March, an all-time high for the industry. Tissue mills generated over 700,000 short tonnes of parent roll tissue in March alone, the most in any month since 2007. This equates to more than 4 pounds of tissue per person in the United States.STRATEGIC DECISIONS BY MANUFACTURERS AND RETAILERS OF NORTH AMERICA, EUROPE, AND THE SOUTH AMERICAN REGION Several manufacturers are following strategic patterns and procedures to gain an edge on decisions taken regarding production as well as sales. Some of such decisions include establishing a purchasing limit on tissue papers among others.For instance,To keep the shelves in their tissue sections supplied, retailers in North America and Europe had to limit the amount of tissue purchased by each client. This was surely great news for tissue mills, which were able to activate all of their reserve capacity to meet the unexpected demand spike. For the past few weeks, consumer tissue mills in North America and Europe have been operating at maximum capacityToilet paper sales in Germany, for example, were more than three times normal in (March 16-22), Mills reported full capacity utilization, extra conversion shifts were scheduled, and demand for additional parent roll orders risen exponentiallyBecause the COVID-19 epidemic hit North America a little later, the impacts on the tissue industry in February were mild. Everything changed in early March, though. Online vendors account for approximately 11% of U.S. tissue sales, have left tissue shelves vacant at retailers ranging from Walmart to smaller shopsIn the South American region, Many MSMEs in developing nations, STCP Engenharia de Projetos Ltda, which make up the majority of forestry firms and are especially sensitive to economic downturns, were severely affected. Other forest-based items, such as packaging materials, wooden pallets, and tissue for toilet paper and mask manufacturing, remained constant or even risen in demandCONCLUSIONPandemic has taken a toll on every aspect of life, including the global economy. With the significant downfalls in many sectors, a collaborative effort of government, industry players, and consumers can win the fight against COVID-19.It continues to inflict the world with appalling economic and social dilemmas, capable enough to leave severe backlash on the economy for the next several years. The first wave had already inflicted severe blows to the population as well as the economy. The currently experiencing the second wave is expected to be more disastrous not only to the masses but also to fast moving consumer goods markets.The recent outbreak of COVID-19 had a positive impact in global tissue paper market as there was an increased demand for tissue papers and toilet papers in the United States and several European countries. People staying at home because of business closings and shelter-in-place orders, the demand for consumer toilet paper was skyrocketed while the demand for commercial toilet paper was reduced.Moreover, the rising demand for tissue papers and their supplementary products is expected to increase the market growth up to some extent over the forecast period.