Market Trends of Packaging Industry
Paper and Paperboard Packaging Products to Witness the Highest Growth
- The market is driven by the increased usage of environmentally friendly materials in packaging. Eco-friendly packaging is recyclable, biodegradable, reused, and non-toxic, with a low environmental impact. Paper packaging products, such as paper bags, pouches, and cartons, are the fastest-growing sustainable packaging materials. The increasing trend of online retail and environmental regulations on non-biodegradable and non-recyclable packaging solutions is progressively creating a massive demand for eco-friendly paper packaging solutions.
- In February 2021, Coca-Cola tested its first test run on paper bottles from an extra-strong paper shell containing a thin plastic liner. It ran its first test with 2,000 bottles to see how it held up. The company aims to create a 100% recyclable, plastic-free bottle to prevent gas from escaping from carbonated drinks.
- Moreover, companies such as Smarties have rolled out recyclable paper packaging for confectionery products worldwide in the confectionaries category. This would represent a transition of 90% of the Smarties range, as 10% was already packed in recyclable paper packaging. Further, Nestlé's major step toward its ambition is to make all of its packaging paper-based and recyclable or reusable by 2025 and reduce the usage of virgin plastics by one-third in the same period.
- Companies in the paper packaging market are increasing their focus on sustainable packaging solutions that meet consumer demands. For instance, Huhtamäki Oyj, a Finland-based food packaging specialist, developed the Huhtamäki blue loop, a novel platform where partners can collaborate to brainstorm sustainable paper packaging. The introduction of such innovative platforms is leading to market expansion.
- Moreover, various vendors are adapting and innovating new packaging with paper packaging material to reduce the environmental impact of packaging and launch multiple recycling initiatives. For instance, in February 2021, TetraPak announced a new initiative in Jeddah in partnership with the District Model Center of Muhammadiyah in Jeddah. It will collect used carton packages and recycles them to support sustainable consumption practices.
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Asia Pacific Packaging Market to Expand Significantly
- Plastic packaging has observed wide-scale utilization in Asia, with countries like India and China contributing significantly through their food and beverages market. The Chinese packaging sector is heavily influenced by variables such as rising per capita income, changing social atmosphere, and demographics, including ban enforcement on plastics to minimize its plastic footprint. This results in significant impacts on the packaging business.
- In a 2021-2025 "five-year plan," China announced it would improve its plastic recycling and incineration capacities, promote "green" plastic products, and combat the misuse of plastic in packaging and agriculture. The new five-year plan would push merchants and delivery companies to reduce "unreasonable" plastic wrapping and increase garbage incineration rates in cities to about 800,000 tons per day by 2025, up from 580,000 tons last year. Such developments are expected to increase the country's demand for recyclable flexible plastic packaging. Over the projection period, the rise of e-commerce giants like Alibaba is expected to fuel the packaging market. For example, Chinese shoppers received approximately 1.9 billion shipments during Alibaba's Double 11 shopping event, which lasted 10 days.
- Packaging is India's fifth-largest industry and one of the country's fastest-growing sectors. Over the last few years, the packaging industry has been a key driver of technology and innovation in the country, contributing value to various manufacturing sectors, including agriculture and the fast-moving consumer goods (FMCG) segments.
- According to the Indian Institute of Packaging (IIP), packaging consumption in India has surged by 200% over the last decade, from 4.3 kilograms per person per annum (pppa) in FY10 to 8.6 kg pppa in FY20. Despite the sharp increase over the last decade, there remains tremendous space for growth in this industry compared to other developed regions throughout the world.
- Japan is a major user of paper-based products in various industries, including newspaper, packaging, printing and communication, sanitary products, and other miscellaneous uses. Moreover, due to consumer awareness about sustainable packaging, worries about deforestation, and raw material availability, there has been a recent movement in the packaging sector to utilize paper.
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