Market Trends of Packaging Industry in South Africa Industry
This section covers the major market trends shaping the South Africa Packaging Market according to our research experts:
Growing Urbanization in the Country
- South Africa's access to processed and fast food has increased due to economic expansion and rapid urbanization. Due to busy lifestyles and a large population of working-class professionals, the country has a high market penetration of ready-to-eat meals, which is also anticipated to support the expansion of bags and pouches-based packaging solutions during the forecast period.
- Major global beauty and cosmetics companies are capitalizing on the industry growth expected in Sub-Saharan Africa, which is regarded as the sector's "next frontier." Due to a burgeoning population expected to double to 2.4 billion in 2050, the rising middle class and increased urbanization have positioned the country to that status, with which the beauty market is projected to double over the next decade.
- In urban areas, consumers are adapting to new trends and consumption behaviors. In Sub-Saharan Africa, the number of people aged between 12 to 24 has steadily risen, reaching a significant of the population in the country, according to World Bank. Such a rise in the young population that usually spends more on beverages, i.e., alcoholic and non-alcoholic and on-the-go food, will further be expected to add demand for packaging growth.
- Moreover, the trend for smaller families and urbanization is causing homes to become smaller, with less storage space, making consumers more appreciative of space-efficient packaging where carton packaging has become the suitable solution, as it is space-efficient to maximize logistical performance.
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Food and Beverage Industry to Add Significant Growth to the Market
- The government of South Africa is prioritizing the food and beverage sector, which are the most significant components of South Africa's manufacturing industry. The government actively encourages further development of agriculture and the agro-processing sector.
- Several innovations have enabled the development of sustainable and customized flexible packaging solutions, resulting in an unprecedented rise in the packaging market. Food and consumer goods imports into Africa account for a sizable portion of the country's packaging solutions. Rising demand for packaged foods, a need to keep costs down, and investments in food processing propel packaging growth.
- For instance, in May 2021, Huhtamaki, a key manufacturer of sustainable packaging solutions, announced that it is setting up a new manufacturing unit in KwaZulu-Natal in South Africa to serve its existing and new egg packaging customers in the KwaZulu-Natal area with a broad range of locally produced packaging solutions. The new facility will be close to one of South Africa's main export ports, enabling competitive exports of egg packaging for customers across East Africa.
- Moreover, there has been an increased demand among younger consumers for products such as energy drinks. One of the most important trends in the beer market is the shift in consumer preference toward low and non-alcohol beers and craft beers. Furthermore, due to premiumization, which has significantly impacted the market in recent years, beer producers across the country have focused more on quality than quantity. In addition, the removal of all restrictions in January 2022 on the sales of alcohol by the government is expected to raise the sale of alcohol, positively impacting the glass packaging.
- Moreover, retail sales in South Africa increased rapidly with the expansion of the food retail sector. According to the US Department of Agriculture, in 2021, South African retail food sales totaled USD 40 billion as the South African economy began to recover from the influences of the COVID-19 pandemic. The growth followed the easing of COVID-19 regulations and rising in-store shopping rates.
