The ongoing demand is more remarkable considering it is compared to the early months of COVID-19, when anxiety was high and stocking up on essentials was prevalent. The second quarter of 2021 tells a different story. The CPG numbers reflect the optimism of reopening, with purchases of personal care products up 20.6% over the prior year. Items for foodservice — like popcorn at the movies or hot dogs at the ballpark — that suffered early in the pandemic have likely seen increases as events return.

But that second quarter optimism had yet to experience the delta variant. Delta’s influence will be reflected in the third quarter numbers, showing just how much the variant has hampered reopening efforts — and how demand for CPG products changes. A Consumer Brands/Ipsos poll of 1,000 American adults conducted August 6-8 found that 35% of Americans say they are spending more time at home because of the delta variant. Most Americans (63%) are spending the same amount of time at home, and only 3% say they are spending less time.

Every link in the supply chain is costing more right now. Month after month, the Producer Price Index sets a new record. On a year-over-year basis, PPI rose 6.1% in April, 6.5% in May and 7.1% in June, its inexorable march upward making it drastically more expensive to make essentials. Some of the most common ingredients in an array of CPG products have spiked in the last year. Corn, used in everything from tortilla chips to baked goods, is up 121%. Ethyl alcohol, used in cleaning products and hand sanitizer, is up 103%. Aluminum, used to package vegetables and soda, is up 100%. The list goes on and the story is the same.

There are also significant delays or added costs in shipping, both to get ingredients and materials to make products and to send finished products to consumers. Port congestion has reached unheard of highs recently, as ships struggle to deliver cargo. The trucking industry continues to struggle to find drivers needed to meet demand while combating dramatically higher diesel fuel prices. These bottlenecks lead to delays — bothersome when a consumer must wait months for furniture delivery, disastrous if those delays mean consumers don’t have access to essentials they depend on like baby formula, soap or toilet paper.

Consumer Brands continues to advocate for policies that end the government’s uncoordinated and outdated approach to supply chain policy and lets some steam out of the over-heating engine. Deliver America: A Platform to Restore Supply Chain Competitiveness and Resiliency outlines a national strategy for clear federal leadership, coordinated government action and forward-looking public policy that includes recommendations to reduce port congestion and grow transportation capacity.

Congress is increasingly recognizing the importance of the supply chain, as evidenced by the infrastructure package that passed recently in the Senate and now awaits a vote in the House. Included in the bill are many key provisions that will reduce long-term friction in the supply chain, like policy options to improve the national freight system.

In the near term, workers sidelined by family care needs throughout the pandemic may reenter the workforce as schools reopen. Consumer Brands supports enhancing childcare and family support programs and ensure schools have what they need to open fully.

The big variable for the available workforce will be the path of the delta variant and growth in vaccination rate. Now that the FDA has granted full approval of COVID-19 vaccines, the expectations around vaccination are likely to change quickly.

A Consumer Brands survey of 39 CPG companies, conducted July 28 – August 3, suggests the ground is already softening. Currently, 91% of companies said they were not requiring vaccination for any of their employees; however, in light of the delta variant, 66% said they were actively considering it or had not ruled it out.

The pandemic has created unpredictable and shadowy economic conditions. The delta variant and unvaccinated population are further curveballs making for an uncertain future. As the second half of the year progresses, questions over demand, costs and workforce will persist.