Market Insights from Royal Containers: COVID-19 Edition
The coronavirus has become one of the biggest threats to the global economy in 2020 and has had an undeniable impact on the financial markets. For the industries surviving these unprecedented times, we hope the worst is behind us. For businesses who were forced to close as a result of the virus, our thoughts are with you.
How has COVID-19 changed our industry?
Prior to the pandemic, the globalization of the corrugated market had been building over the past 20 years. There was a steady flow of goods between international players and partnerships extended beyond borders. In 5 short months, there has been a paradigm shift towards localized businesses, and the corrugated industry is no exception. At Royal Containers, we are actively looking to support local businesses, which ultimately means supporting our neighbours, our friends, and fellow Canadians during these uncertain times.
From what we are hearing from industry professionals and competitors, experts are advising businesses to strap in and accept our current state of affairs for the remainder of 2020. Despite the economic downturns from the first half of this year, our industry can still expect a modest growth rate of 1-2%. From industry resources, reports are indicating growth in our sector from June onwards. There has been a small uptick in the number of announcements regarding expansions, investments, and consolidations within the corrugated market.
How has COVID-19 impacted Royal Containers?
In the height of the pandemic, we experienced a steep decline in sales. A combination of fear, instability, and panic in the markets resulted in an average of 30% decrease both in and outside the corrugated industry.
Along with many other businesses, Royal Containers was thrown off course in a downward spiral. There is no such thing as a crystal ball to see what the future has in store, and with each passing month, it grew more and more difficult to build out accurate sales targets. As part of our quarterly review, we found ourselves re-evaluating our 2020 strategic goals and growth targets.
As of July, we are happy to report that sales have bounced back and we are achieving our new yet reduced targets. Our pipeline looks promising and we expect to meet our “pre-COVID” goals in 2021.
How will Royal Containers remain a leader for the balance of 2020?
Our keyword for the remainder of the year is endurance. In terms of the coronavirus, what we had once hoped would be over in a sprint has now turned into a marathon.
A testament to our success through good times and bad is our ability to pivot and reset. As a result of the virus, we are focusing on markets such as; home office electronics, food and beverage, PPE and medical supply, health and beauty, private labels, e-commerce, online companies, the pet industry, and cannabis.
As Ontario continues to operate in Stage 3, more businesses are re-opening and some protocols are beginning to loosen. We have made the decision as a company to persist with our stringent safety protocols to ensure the safety and protection of our employees. The mental and physical well-being of our employees will always remain our number one priority.
Beyond our ability to adapt, we believe our dedication to our values is what sets us apart as a leader. Our corporate values of We Respond, We Perform, We Care and We Lead ring true now more than ever. Despite the change that is happening around us, we must stay the course on our company vision; to build partnerships in packaging. Even if we cannot be face to face with all of our co-workers, customers, or suppliers, we continue to build upon our relationships in new and innovative ways.
The impact of the pandemic has been enormous, and the ripple effect will be felt for years to come but Royal Containers will emerge the other side stronger than ever. Thank you for being our partner and staying the course together through this challenging journey.
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