Environmental and sustainability issues have always been drivers of packaging industry trends. It is however arguable that, in recent years, heightened consumer awareness around the globe has impacted the strategic, alongside R&D plans, of businesses operating within the packaging paper sector.
The packaging is big business, with the sector estimated to be worth $851 billion in 2017. It is predicted that packaging demand will continue to grow steadily at 2.9%; with the sector expected to be worth $980 billion by 2022.*
This growth is occurring in a relatively mature market, that has seen a period of consolidation in the last few years. There have been some notable acquisitions recently, for example, the acquisition of International Paper’s Consumer Packaging Unit by Graphic Packaging at the start of 2018, for $1.8 billion. Other well-known paper packaging companies such as DS Smith, SAICA and Smurfit Kappa have also used acquisition in recent years to extend their market share, especially in Europe.
Paper-based food packaging, like the rest of the sector, is also enjoying positive growth as it responds innovatively to the changing consumer focus for sustainability. The global food packaging market was valued at approximately $292 billion in 2018, and is expected to reach almost $425 billion by 2025. Moreover, it’s not only the demands of consumers that are changing; investors are also looking for more ethical and environmentally-sound investment opportunities than ever before.
Here is what we see as three key trends in the food packaging sector:
1 Customized packaging
Innovation and creativity across the sector, with digital printing being an enabler for even smaller companies, have allowed greater customization of products across the sector. This is particularly evident in the printing of paperboard cups, for example, and also in product labeling. Members of the PG team have been delighted to receive their personalized bottles of Coke and jars of Nutella carrying their names on them! Gimmicky, perhaps, but certainly eye-catching and good for sales.
Environmental awareness and a consumer-led demand for less plastic in their purchases has led packaging companies to take a fresh look at alternative materials too. Plastic is being replaced, with paper and board back on top for packaging. Some companies are also looking at developing other natural, non-toxic and compostable options. These include some interesting and unusual materials such as fungi and algae.
3. Less is More
Again, led by changes in consumer preferences, the industry is responding – by giving less. Environmentally-aware consumers now review brands and their purchasing decisions based on the amount of packaging used to wrap and store an item, and the eco-credentials of the material used. This has created new challenges for brands around brand values and brand positioning.
For some consumers, the less is more takes them towards buying popular food items (and other regular household products) in larger pack sizes, as a way of saving money and also to reduce the packaging.
With brands – from budget to luxury – now paying much closer attention to their packaging decision; marketing messages and how they make use of the ‘real estate’ of the food packaging itself is even more crucial for product differentiation and positioning. Packaging features such as QR codes, ingredient information, eye-catching designs, innovative shape, packaging paper sizes and styling all come into play to build brand value and customer satisfaction.
PG Paper is a global paper solutions company. We work with mill partners across the globe to meet the changing needs of our customers within the food sector, or those manufacturing packaging for the sector, to meet all of their paper and board supplies.
*Packaging industry market report: http://bit.do/fc2Y3