Market Trends of Secondary Packaging Industry
Folding Cartons Segment Expected to Hold Significant Share in the Market
- Folding carton demand has been expanding across many industries, including food and beverage, healthcare, personal care, homecare, retail, and others, as the focus shifts to eco-friendly and sustainable practices. The need for this package form in the region has been driven by consumer awareness of sustainable packaging preferences, availability of raw materials, the lightweight, biodegradable, and recyclable nature of paper, and deforestation. Due to increased urbanization and an inflow of visitors who prefer safer processed meals, the region has a high packaged food and beverage consumption rate. Furthermore, the food service industry's market requirement has been reshaped, fueling the growth of the researched market as an increasing number of single homes require more takeaway and delivery of meal services.
- The investments towards the production of cartons are expected to drive the market studied. For instance, in May 2022, MM Kotkamills spent around EUR 30 million (~USD 33 million) on two cutting-edge cross-cutters with automated core and waste processing. The investment would enable MM Kotkamills to enhance its position as a carton board sheet provider in the European carton board industry. The investment project is projected to improve board production's competitiveness by increasing flexibility and lowering transportation costs.
- Furthermore, Polish packaging manufacturer Akomex announced increased capacity at its Starogard Gdański plant in Poland by installing a new printing press and finishing equipment for folding cartons. Akomex specializes in high-quality folding boxes for the food sector. The company is part of the Akomex Group and is one of the leading packaging producers in Central Europe, specializing in packaging made from carton board, solid board, and corrugated board, as well as leaflets and labels for various end-user industries such as food, pharmaceutical, electronics, household sectors, and personal care.
- Moreover, in April 2022, Asia Pacific Resources International Limited (APRIL Group) committed to strengthening the growth of the green economy in Indonesia by expanding its product portfolio in the downstream sector by investing IDR 33.4 trillion (~USD 2.3 billion) in a sustainable paperboard production facility. When completed, this facility was anticipated to produce 1.2 million tons of folding box board annually that is fully recyclable and biodegradable.
- Furthermore, according to the Forestry Production and Trade survey conducted by Food and Agriculture Organization (FAO) in December 2022, the production volume of paper and paperboard was approximately 417.3 million metric tons globally. The production of paper and paperboard has been stable over the past decade. Such factors are expected to create an opportunity for the players in the market to develop new products to capture the market share.
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North America is Expected to Hold Significant Share
- The market in North America is being driven by the increased usage of environmentally friendly materials in packaging. Eco-friendly packaging is defined as packaging that is recyclable, biodegradable, reused, and non-toxic and has a low environmental impact. End-users, such as the food and beverage industry and makers of household care goods, are becoming increasingly aware of the need to utilize environmentally friendly packaging materials. Folding cartons are made of recyclable and biodegradable materials like paperboard and hence have no negative environmental impact.
- Further, increasing customer spending patterns and rapid internet penetration directly influence the expansion of e-commerce. According to the US Census Bureau and the US Department of Commerce, e-commerce accounted for 14.7% of all United States retail sales in the fourth quarter of 2022, an increase from the third quarter. The highest quarterly income in history was generated by retail e-commerce in the United States from October to December 2022, reaching approximately USD 262 billion.
- Also, increasing courier and messengers' revenue indicates the use of secondary packaging, such as corrugated boards and folding cartons packaging, in transiting the products from one place to another. According to the US Department of Commerce, before last year, the United States couriers and messengers generated almost USD 137.91 billion in operating revenue. UPS is the largest courier and delivery service provider in the United States, with around 40% of the courier market. Notably, according to the Pitney Bowes Parcel Shipping Index, United Parcel Service (UPS) held a market share of 37% in the United States, while FedEx had 33% of the market. Such stats indicate the significant demand for secondary courier bags and parcel packaging in the United States.
- The secondary packaging for beverages serves different purposes. The secondary packaging is used to protect heavy bottles from breaking, along with reducing costs by shipping multiple items together. It may sometimes be used as a barrier or protection against sunlight exposure. The secondary packaging helps reinforce the brand as well as enhance product visibility. Also, it can drive consumer perception and impact beverage companies' manufacturing environment.
- Further, in December 2022, UFP Packaging, a US-based holding company UFP Industries subsidiary, acquired corrugated packaging manufacturer Titan Corrugated and its subsidiary All Boxed Up. Titan specializes in manufacturing transport and storage boxes, industrial jumbo boxes, corrugated shipping containers, and POS displays. The acquisition helps advance UFP's mission of becoming a leading global packaging solutions provider.
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