FLEXIBLES & PAPERBOARD SET TO GROW
Flexible plastics and paperboard will be the fastest growing packaging materials – reflecting both challenges and opportunities as the industry targets greater sustainability – across the next five years, according to the latest in-depth analysis from Smithers.
Its new market report – The Future of Global Packaging to 2028 – shows total value in the sector reached $1.17tn last year. Worldwide demand has recovered strongly from Covid-19 and subsequent economic disruptions having grown at 5.8 per cent year-on-year across 2018-2021.
Despite macroeconomic uncertainty and rising input costs, Smithers expert modelling shows global sales value will increase at a compound annual growth rate (CAGR) of 3.9 per cent to reach $1.42tn in 2028. Organic growth in developing regions will account for the majority of this increase, according to Smithers' exclusive study of 50 individual national markets across the globe.
The market in Asia will increase by 5.3 per cent year-on-year across 2023-2028. The fastest developing markets are Indonesia, the Philippines, and India. They are followed closely by China, already the largest single market on the planet, it will account for 25.3 per cent of world packaging demand, by value, in 2028. India meanwhile is now the third largest national market, with packaging sales overtaking Germany for the first time in 2022. This is shadowed by similar, if smaller emerging potential in South and Central America, Africa, and the Middle East.
Higher consumer spending power in these regions will help support increased sales of packaged food, healthcare, and cosmetics packaging. This will sustain increased sales of flexible plastic packaging formats, which offer distinct advantages in these markets, despite growing awareness of the difficulty of recovering these at end-of-life. A global CAGR of 5.1 per cent will make flexible plastics the fastest growing packaging material across the next five years, with global sales increasing from $197bn in last year to $253 bn in 2028.
Paperboard (corrugated, folding cartons, and liquid paperboard) is still the largest material segment, accounting for 31.8 per cent of world value ($374bn) in last year. The segment is set to grow at a 4.2 per cent CAGR through to 2028. This reflects below average growth in transit segments, countered by surging demand in e-commerce, and new premium sustainable alternatives to plastics for consumer applications in developed regions.
This last trend is most advanced in Europe, which will soon see a reformed Packaging and Packaging Waste Regulation (PPWR) join its pioneering single-use plastics legislation. Many leading CPG brands have also committed to improving the sustainability of their packaging portfolios across the forecast period, with the first targets set for 2025.
This is providing an impetus for innovation that will permeate around the world over the forecast period. In parallel, demand for recycled plastics is increasing, but requires further investment in recycling infrastructure to provide a long-term solution. Initially post-consumer recycled (PCR) resins will concentrate on rigid plastics, and polyethylene terephthalate (PET) beverage formats in particular; although flexibles and polyolefins are set to benefit from the installation of more advanced (chemical) recycling capacity at scale.
There is also innovation in glass and metal packaging, but these both material markets will track beneath the global mean for the next five years, as buyers seek out lighter weight, less energy-intensive materials sets.
The Future of Global Packaging to 2028 combines expert analysis of the latest economic, consumer, legislative, and demographic trends to provide unparalleled insight into the current and future demand for packaging worldwide. Exclusive data is presented in over 750 table and figures segmenting the market by:
• Packaging type (Flexible plastic, Foil, Paper, Paperboard, Metal, Glass, Rigid plastic, Other)
• End-use application (Food, Drink, Cosmetics, Healthcare, Other consumer, Industrial/Transit)
• 65 regional and leading national markets.
This essential business strategy guide to a fast-developing global market is available to purchase now from Smithers priced US$6,750 (€5,970, £5,250).
For more information about Smithers, please visit https://www.smithers.com/