The flexible packaging market was valued at USD 230.97 billion in 2017, and is expected to reach a value of USD 291.96 billion by 2023 at a CAGR of 3.86%, over the forecast period (2018—2023). The regions considered in the scope of the report include North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa.
With growing focus on sustainability, traditional rigid packaging solutions are being replaced by innovative, flexible packaging. Increasing market demands for consumer-friendly packages and an enhanced product protection have propelled flexible packaging as a viable and cost-effective alternative. Modern developments in the packaging industry have led to an unprecedented rise in the flexible packaging market. New product designs working toward gaining consumer attention, while minimizing waste and reducing costs, without compromising on the quality of packaging, have been the major factors positively impacting the growth of the flexible packaging market. The emergence of sustainable and recyclable alternative materials based on polymers in the flexible packaging industry, in line with the existing demand for environment-friendly packaging, has majorly benefited the pharmaceutical and food industries. Furthermore, with increasing sales through e-commerce have given a strong momentum to the market growth. In 2016, an estimated 1.61 billion people purchased goods online, globally. In 2016, worldwide e-retail sales amounted to USD 1.9 trillion and projections show a growth of up to USD 4.06 trillion by 2020.
However, the stringent regulatory environment in the packaging industry has been a major limiting factor for growth of the flexible packaging market.
The world of flexible packaging for commodity goods and services is a high volume, low margin world of product polymer manufacturers. The price of plastic feed stocks is subjected to the variability of the global hydrocarbon market. To counter this, packaging manufacturers have searched for alternatives, to provide a much better solution — “down gauging”, which refers to reducing the amount of material in a product while still maintaining or even improving the properties of the material. Improved plastics have been recognized to offer tremendous down gauging opportunities in flexible packaging. A gram or two saved in the weight of a package has been identified to have an enormous impact on the environment, and the energy efficiency obtained when considering millions of individual packages produced each year.
Over the years, companies globally, have been identified to implement down gauging and replacement of less desirable materials to significantly reduce packaging costs, and lower package weight has, in turn, resulted in the reduction of the amounts and types of materials used and processing steps required to manufacture a flexible package. Recently, SABIC, a diversified manufacturing company, showcased new products and technologies, which may reduce the environmental impact of packaging by enabling down gauging. The down gauging technology has reduced thicknesses by up to 20% compared to current film concepts. This move, in turn, is expected to increase the market for flexible packaging.
Flexible packaging offers the best and most affordable packaging option to the food industry, by adding packaging value and marketability to the food products. It ensures food protection and extends the shelf life of the product by use of various materials, such as plastics, metals, and tyvek, providing an adequate protection from heat and other elements. Food products purchased through retail outlets need to be packaged in convenient and lightweight boxes, to ease the amount of effort required by consumers while carrying them. Owing to the versatility of the materials, custom qualities and efficiency in conserving resources, combined with their sustainability, the flexible packaging has emerged as the preferred form of packaging in the food industry.
Food consumption has witnessed a high growth in the recent past, creating a demand for the packaged food products with an extended shelf life and sterility. The United States accounts for a significant share in demand for packaged food, owing to consumers being immensely pressed for time due to busy schedules, and frequently purchasing packaged ready-to-eat food items, instead of conventional meals. The necessity for labeling of the products to list the nutrient information, due to the laws implemented by FDA, has further laid emphasis on flexible packaging and functional coatings in the packaging systems. Health-focused and organic food consumers are other unnoticed heavy users of flexible packaging, particularly in the segments of fresh fruits, health bars, salads, and other health-related products.
The current wave of economic expansion in APAC is being seen from all over the world. With infrastructure, manufacturing, agriculture, and services sectors, the packaging industry is also showing great variety and depth in its growth. India has the second largest population in the world, behind China. Because of this, the demand for products is much greater when compared to other countries, which are offering growth opportunities for the packaging industry. Variations in demand for different products with different features, such as availability of soap in solid and liquid formats, have led to the launch of varying pack types, for instance, laundry detergents have become available in flexible packaging and plastic packaging. In addition to the demographic shifts, the packaging industry in APAC, specifically India, is also adapting to changes in the way consumers shop. Different strategies are being tailored to suit urban and rural areas and even across various regions in India. Thus, increasing population, rising consumption of packaged food (processed and frozen food), and growing retail e-commerce sales are augmenting the market growth in the region.
However, higher inflation rates and inadequate supply chain are some of the major challenges for this market in the Asia-Pacific region.
Major Players: Amcor Limited, Bemis Company, Inc., Berry Plastics Corporation, Clondalkin, Mondi Group, Sealed Air Corporation, Sonoco Products Company, among others.
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