Over the past half a year the manufacturing industry — like most other industries — has been focused on how to cope with the Coronavirus crisis.

This has meant adapting to new, challenging realities like remote working, supply-chain disruptions, more stringent health and safety requirements and so on. It has also meant adapting to sudden, major shifts in consumer behavior for the short term: for example, the collapse in demand for the automotive industry (which is already on the road to recovery — pun unintended); or the rocketing demand for hygiene products; or indeed the radical shifts in demand within the food industry, as people panic-bought, stocked up on non-perishable goods, and generally changed where, how and what they ate, particularly during lockdown.

But the current public health crisis is about more than the immediate sense of “crisis” itself, and the major, yet largely transient changes in consumer behavior it triggered. Indeed, many of the early trends have all but faded away (at least in many places), as populations, businesses and governments learned to adapt. However, some longer-term changes are emerging that manufacturers would do well to recognize, in order to gain a competitive edge.

Accelerated evolution of the manufacturing industry

Once such change is to the manufacturing industry itself. In a recent interview with FoodNavigator, Seebo CEO Lior Akavia explained how the crisis trigger a wave of technological innovation among manufacturers.

Meeting accelerated demand, even in the short-term, can have long-term impacts on a company’s market share — be it food, hygiene products, over-the-counter medicines, or anything else. A recent study by PwC revealed that during a crisis, consumers are more likely than ever to switch brands based on availability alone. Simply put: if they can’t find their favourite brand on the shelf, they’ll just grab the next one. More significantly still, the study shower that they are likely to stick to that new brand in the long-term. This makes it all the more urgent that manufacturers meet demand during a crisis.

Paraphrasing Akavia, the Food Navigator article noted how, in the face of unprecedented spikes in demand for certain products (both short-term and longer-term):

“…manufacturers were left with two choices: to either build new production lines to meet demand — but ‘this takes years’ and ‘huge investments’, said Akavia — or optimise their processes, which can ‘quickly translate into increased capacity.'”

“Optimization” in this context means reducing the process inefficiencies that lead to production losses; e.g. waste, quality, yield, throughput and so on. If manufacturers are to meet rising demand in a scalable way, every ounce of productivity and efficiency counts.

This wave of innovation is still ongoing, and it’s clear that manufacturers who successfully adopt the right technologies and methodologies to thrive in a crisis environment, will emerge with a significant advantage over those that do not, even once the crisis is firmly behind us.

As a recent paper by Mckinsey notes, the COVID-19 crisis “creates an opportunity to reimagine the way work is done”:

The coronavirus will have long-lasting—perhaps permanent—effects on manufacturing organizations, forcing companies to restructure their operations to maintain production while protecting their workers…

…By accelerating the adoption of new digital technologies and by drawing on the flexibility and creativity of their frontline staff, companies have the opportunity to emerge from the crisis with manufacturing operations that are safer, more productive, and more resilient.

Crises and challenges — economic, natural or otherwise — can always occur. Those manufacturers who respondwell to the current crisis will also be best equipped to cope with and emerge stronger from each subsequent crisis.

Changes in consumer behavior

There have also been many important changes to consumer behavior, many of which are likely to have long-term impacts which — if correctly identified — can offer an opportunity for manufacturers to capitalize on.

For example, demand for baking ingredients doubled during the height of the crisis, according to a General Mills study. This can be attributed to a variety of factors: people seeking comfort foods to deal with stress and anxiety, or abandoning diets for similar reasons. Still others had to find ways to fill additional spare time stuck at home, not to mention find new ways to occupy their children. This appears to be part of a wider trend of people preparing more of their own meals — particularly at dinner time, in part to recreate the “restaurant” experience they were missing. As restrictions are lifted, people are indeed returning to the restaurants and cafes they love — but will many of these people continue their newfound cooking hobbies as well? How will that impact long-term demand?

Demand for salty snacks also increased for similar reasons, as a coping mechanism for stress and boredom. For example US demand for potato chips grew by 30%, while sales of popcorn and pretzels rose 47%. Similarly, sales of instant coffee have surged worldwide. Again, consumer behavior will likely moderate once the crisis ends, but by that point, will they have developed a newfound taste for these (somewhat addictive) products?

It’s impossible to know for certain how these trends will feed into post-crisis consumer habits. But clearly those manufacturers who fill that demand now will be best positioned to capitalize on any long-term impact.

Of course, these trends aren’t limited to the food industry. For example, the crisis has triggered higher hygiene awareness globally. While the current levels of hyper-awareness aren’t sustainable, it is reasonable to assume that many people will come out of the crisis more conscious about cleanliness — whether at home or in the workplace. Demand for certain cleaning products will therefore probably remain higher than before as well.

Indeed, a report by Fortune Business Insights forecast that the “Hand Wash” industry will reach $4.56 billion by 2027, as demand rises significantly. In great part this demand is being driven by “increasing government initiatives to promote the usage of personal care products”, as well as by “regulatory bodies and NGOs [who] are also encouraging the usage of hand wash and sanitizers through social media platforms, websites, print media, television, and radio.” Another report forecast a similar rise in demand for the hand sanitizer market — which is expected to reach $1.87 billion by the end of 2020.

According to that report:

“The hand sanitizer market size was anticipated to reach USD 1.35 billion in 2020 before the Covid-19 outbreak. However, on account of the present scenario, it is likely to generate USD 1.87 billion this year. In addition to this, it would rise tremendously from an annual growth rate of 5.06% to 45.71% in 2020.” [emphasis added]

The takeaway for manufacturers: now is the time to turn crisis to opportunity

The Coronavirus crisis won’t last forever (even if it sometimes feels that way). When the dust settles, many things will return to the way they were before.

But it’s clear that for manufacturing, things will never be quite the same. The accelerated pace of innovation — especially in the area of digitization; the long-term changes in consumer behavior; the rise and fall of various products and even industries; all of these factors are coalescing to form a new reality that is more efficient, more demanding and far more competitive.

Those manufacturers who adapt and innovate now, will emerge from 2020 with a clear competitive edge.

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