Retail ready packs major opportunity for packaging suppliers, say Pira

The market analysis predicts that global demand will surge from 19m tonnes in 2010 to 27m tonnes by the end of the period – a jump of 42 per cent - in what the consultants describe as a “ high-growth niche in the overall packaging market”. RRP refers to packaging systems typically made from corrugated board, solid fibreboard or rigid plastic. They include designs referred to as shelf-ready, display-ready or shopper-ready. Their main aim is to reduce or avoid the need for in-store stock replacement of stock and provide benefits to the total supply chain, said Pira in its report The Future of Retail Ready Packaging to 2016. Retailers and RRP trend The growth will be fuelled primarily by retailers seeking to reach tougher bottom-line targets in an increasingly competitive market “Under pressure from retailers seeking to improve in-store efficiencies, RRP has emerged as a system designed to reduce the amount of handling required to place products on the retail shelf whilst providing the consumer with easy access to products,” said the research which covers 14 countries and 22 end-use segments. Stressing the prevalence of RRPs, Pira said that “ most if not all of the major retailers globally have adopted or are in the process of adopting some form of RRP”. They are turning to RRPs in a bid to cut overheads by reducing labour costs, boost productivity and reduce out-of-stock situations. “A significant proportion of distribution costs are incurred in the final 50 metres of the journey from the distribution centre, between the store back door and the retail shelf. Streamlining this operation, for example by introducing one-touch display systems, can have a marked effect on profitability for the retailer,” explained the report. Growth drivers Growth potential is strongest in developing regions such as Latin America and Asia Pacific – although opportunities still remain in more mature markets found in developed economies. Fastest expansion is forecast for China where is market share of RRPs is expected to increase from 15 per cent to 18 per cent by 2016. Macroeconomic factors such as population growth, as well as microeconomic influences such as printing technology developments and the use of white-top liners are highlighted as key growth drivers. Segment breakdown Food accounts for 78 per cent of the RRP total, with beverage a further 16 per cent. Non-food item make up just six per cent, although the research authors predict this will rise over the review period to 7 per cent. Beverage products will capture 18 per cent of the market by 2016, with food dropping slightly to account for 75 per cent. Consumption of food and drink in the countries surveyed is expected to climb from 6bn tonnes last year to almost 9bn by 2016. Food products make up 63 per cent of primary packaging used in their distribution, while beverages account for 25 per cent. The analysts predicted that food’s share of this segment would rise to 66 per cent. For secondary packs, food is expected to grow two per cent to hold a market share of 68 per cent in five years. Corrugated designs account for almost 75 per cent of RRPs with technology enabling improved graphics and performance. However, the materials share will slip by 0.5 per cent over the period. Conversely, plastic RRPs are expected to grow to almost a quarter by 2016, with gains made against mainly shrink-wrapped trays. Within corrugated segments, diecut boxes are expected to see major growth – thanks to the need for designs that are both more complex both in appearance and performance. These will account for 45 per cent of all RRP shipments by 2016, forecast Pira. The Future of Retail Ready Packaging is available from Pira International

Retail ready packs major opportunity for packaging suppliers, say Pira

Huge growth in demand for retail-ready packs (RRP) over the next five years will provide massive opportunities for packaging suppliers, according to a report by Pira International.

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