Market Share in the Flexible Packaging Market
India is poised to experience substantial growth within the Asia-Pacific region, particularly in the packaging sector. Packaging stands as the fifth-largest industry in the Indian economy and holds a prominent position as one of the fastest-growing sectors in the country. The Packaging Industry Association of India (PIAI) reports a robust annual growth rate of 22-25% for the sector.
The demand for packaging has been witnessing significant growth due to several factors, including the expanding population, rising income levels, urbanization, evolving lifestyles, increasing internet penetration, and a growing economy. These factors collectively contribute to an increased need for packaging solutions to cater to the changing consumer landscape and rising consumer expectations.
Sustainable Packaging in India
In recent years, India has experienced a notable upswing in the sustainable packaging sector due to the rising consumption of packaged food, increased consumer awareness, and growing demand for high-quality products. This surge in consumer awareness is particularly evident in packaged food deliveries.
The packaging industry in India is actively shifting towards flexible packaging, driven by its numerous advantages in terms of energy efficiency and environmental sustainability. Flexible packaging combines the favourable attributes of plastic, paper, and aluminium foil, ensuring optimal product freshness, superior barrier protection, durability, excellent printability, and user-friendly functionality.
Global Market Trends
The coming decade is expected to witness continued growth in the industry, albeit with increased pressure and disruptive changes. While the growth rate in China is slowing down, it, along with other Asian markets, will remain the primary driving force for industry growth alongside North America. However, the significant increase in plastic usage has raised concerns about its environmental impact, leading to the implementation of stricter regulations.
Furthermore, the rise of e-commerce has brought significant benefits to many converters in the industry. However, it has also created new challenges and intensified competition, resulting in tighter profit margins for converters’ customers, particularly fast-moving consumer goods (FMCG) companies and retailers. They are now faced with new demands and the need to adapt quickly to the evolving e-commerce landscape.
Market Dynamics
The key observation is that North America has ascended to the second-largest market globally, trailing behind China regarding packaging consumption. China recorded an estimated packaging consumption of around USD 214 billion, while North America reached approximately USD 203 billion. Projections indicate that by 2022, China’s lead will further widen to USD 276 billion, rendering North America’s market approximately 78 percent the size of China’s market in terms of value.
Although developed regions like North America and Europe are experiencing lower growth rates, their substantial absolute size maintains their significance within the industry. Despite this, there are still discernible opportunities for growth within these regions. To illustrate the relative proportions, the industrial/transit packaging sector anticipates a rise in apparent consumption to approximately USD 78 billion for North America and USD 62 billion for Western Europe by 2022. This cumulative figure surpasses the forecasted total packaging demand for other Asian markets (excluding China and Japan), estimated at around USD 129 billion.
In the food sector, representing the most significant consumer packaging segment, other Asian markets (excluding China and Japan) emerge as the primary emerging market, with a projected consumption of approximately USD 35 billion by 2022. However, it should be noted that this value remains significantly smaller than the combined total of approximately USD 120 billion for North America and Western Europe (USD 69 billion and USD 51 billion, respectively).
Segment-specific Demand and Market Share
The food and beverages segment has historically held a significant market share, accounting for approximately 56%. This can be attributed to the widespread adoption of flexible packaging for storing and transporting food and beverages, which is expected to drive the segment’s growth during the forecast period. The nonfragile and lightweight nature of flexible packaging has been instrumental in its market expansion, making it a cost-effective alternative to rigid packaging.
For instance, in 2022, PPC Flexible Packaging LLC successfully executed the acquisition of Plastic Packaging Technologies, LLC, in an undisclosed deal. This acquisition serves as a catalyst for PPC’s expansion in the North American market, bolstering its range of cutting-edge packaging formats and flexible packaging solutions. With a particular focus on the food and beverage, healthcare, and specialty consumer sectors, PPC aims to offer enhanced value and innovation to its customers. By integrating Plastic Packaging Technologies, PPC strengthens its position as a prominent player in the packaging industry, poised to deliver comprehensive solutions and capitalize on strategic growth opportunities.
In both developing and developed nations, household dynamics and busy lifestyles have altered consumption patterns. The prevalence of dual-income households in developed countries has led to a surge in the consumption of ready-to-eat and ready-to-cook meals, creating a substantial demand for flexible packaging. Meanwhile, rapid industrialization and urbanization in developing nations have similarly influenced lifestyles and consumption habits. Consequently, there has been increased food consumption from restaurants, packed food, and processed food, resulting in a growth in the demand for flexible packaging.
The growing demand for various types of snacks, which often substitute for full meals, is expected to drive flexible packaging consumption. Pouches will likely experience increased usage for packaging a wide range of food products. Packaging options utilizing nitrogen to preserve product quality, texture, and colour are particularly favourable. Furthermore, the pharmaceutical industry is anticipated to witness an upswing in packaging usage.
Strategic Brand Communication
To effectively convey their brand identity, companies emphasize packaging that facilitates consumer differentiation between organizations. This strategic focus on packaging aims to communicate the distinctiveness of various brands to consumers.
Overall, the market for flexible packaging is poised for growth due to its advantages in the food and beverages segment, evolving consumption patterns driven by changing lifestyles, increased demand for snacks, and the need for effective brand communication in diverse industries.
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