Market outlook
Graphic-paper producers: Boosting resilience amid the COVID-19 crisis Article by Abhinav Goel, Felix Grünewald, Oskar Lingqvist, and Gregory Vainberg
A recent survey released by the consulting firm McKinsey shows that four proven actions can help graphic-paper producers rebound despite the market declines that have been accelerated by the COVID-19 pandemic.
G
lobal graphic-paper markets have been declining significantly over the past decade. eveloped countries have experienced the strongest decline, at approximately to percent per year hibit . eveloping countries graphic paper consumption surpassed demand from developed countries in . o ever, consumption there, too, had started to ane in , albeit at the slo er pace of appro imately to percent a year. he decline in demand for graphic paper has been especially noticeable in developed countries, here there has been a clear correlation bet een reducing paper consumption and economic advancement, driven by digiti ation. he similar effects e are no seeing in developing countries can be e plained in part by the relatively larger share of digitally savvy younger people in such marets. eneration born comprises true digital natives and already ma es up percent of Bra il s population today, for instance.
Exhibit 1: Graphic-paper demand has been declining globally for a decade—and even longer in developed economies.
THE COVID-19 CRISIS HAS ACCELERATED THE DECLINE OF GRAPHIC-PAPER DEMAND he crisis has been a mi ed bag for paper and pac aging players. n one hand, some companies have benefited from an increase in grocery shopping and pantry loading of essentials, such as toilet paper. n the other hand, graphic paper producers have suffered significant volume drops hese declines are driven by the fact that the pandemic has introduced ne factors but also acce1
6
PAPERFIRST MAG Autumn 2020
Tracy Francis and Fernanda Hoefel, “‘True Gen’: Generation Z and its implications for companies,” November 12, 2018, McKinsey.com.
