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The world around us

Numerous, diverse, and unpredictable factors have influenced the global marketplace. The COVID-19 pandemic that gripped the world in early 2020 overwhelmed healthcare systems, disrupted supply chains in foodservice and other industries, strained communication networks, and called for government-issued stimulus and relief packages. While the direct effects have mostly receded by 2023, lasting challenges persist. These include damage to business models, ongoing disruptions in supply chains, and shifts in consumer behavior.

The uncertainty experienced by consumers through the pandemic period distorted spending patterns beyond recognition. As financial pressures have slowly eased, these patterns have not fully returned to pre-pandemic form. In 2023, consumer purchasing behaviors changed in ways that were often hard to predict, being driven by disparate personal priorities and perspectives.

Continued inflation and high interest rates adversely impacted consumer confidence. Many food manufacturers struggled to respond to their customers’ heightened price sensitivity while dealing with rising labor costs. This dilemma led to a rise in instances of “shrinkflation” (selling smaller quantities of a product at a higher price per volume) or “slack fill” (less product with more air inside packed goods). Faced with these market dynamics, consumers sought to regain a sense of control over spending.

With the worst of supply chain disruption largely behind them, manufacturers ordered less, given declines in retail volumes and high inventories — an aftereffect of stocking up to insulate their businesses from supply chain risks. For Corbion and other suppliers, this resulted in a prolonged period of customer destocking, making demand forecasting extremely difficult. Global economic uncertainty manifested in unpredictable ways, with increases in the food service space despite higher food prices. Overall, consumers spent less, with purchase decision criteria changing from week to week.

In recent years, upheaval across various aspects of life has heightened consumers’ awareness of the fragility of the natural resources and ecosystems upon which the world depends, sharpening their focus on sustainability and the concept of circular economies. Despite the tendency of inflationary pressures to de-emphasize sustainability as a buying criterion, many consumers have persisted in looking for ways to align their purchasing decisions with concerns about the future and preserving the environment.

This movement influenced product formulations and labeling in the home and personal care market, and from a demographic standpoint, Generation Z shoppers (born between 1997 and 2013) showed themselves to be a highly eco-conscious cohort that prioritizes sustainability when making purchase decisions and expects manufacturers to take the lead on environmental issues.*

Instability created by major military conflicts (e.g., Russia–Ukraine, Israel–Hamas), fears of a potential recession, concerns about the climate crisis, and a depressed economy in China created headwinds across a wide range of industries and struck a blow to consumer confidence. These factors, in combination with rising interest rates and high inflation, hurt demand in, for instance, the semiconductor market and prompted tech-led stock market retreats and dramatic losses in market capitalization for numerous companies.

Finally, the rise of all things digital continued to drive the creation of new business models while nudging others toward obsolescence. High-speed evolution in the world of commerce has added another layer of complexity to the tangled web of challenges confronting every global enterprise today.

Rapid, continual shifts in the world and the unforeseen challenges they create demand adaptability, commitment, and farsightedness from companies determined to deliver lasting impact. As Corbion pursues our primary purpose — to preserve what matters — our ability to balance immediate needs with longer-term priorities and our readiness to adjust to changes in the landscape will enable us to continue delivering sustainable solutions that meet the needs of our stakeholders now and in the future.