According to the Visiongain report, the Paper Packaging Market 2011-2021, the global paper packaging market is experiencing a “second wind” driven by consumer demands in emerging countries such as China, India, Brazil and Russia.
Demand for intelligent, recyclable and environmentally friendly packaging materials has also been credited as a factor in the sector’s success.
The industry research expects the paper packaging sector to be worth $236.46bn in 2011, of which the food packaging segment accounts for the largest share at around 45% - an increase on the 40% market segment in 2010.
This figure will continue to grow through increasing demand and improved production rates in the emerging markets, said a Visiongain analyst.
Rapidly emerging economies
“The role of the emerging markets cannot be underestimated. Buoyed by lucrative new markets in the rapidly emerging economies of China, India and Brazil, globalisation has brought accessibility and greater reach to the industry,” packaging analyst Samuel Bakowski told FoodProductionDaily.com.
“These emerging markets - with vast new potential consumer bases are leading to an increase in mergers and acquisitions with companies keen to gain a foothold in these new markets.”
Demand in established markets such as North America and Europe for recyclable and sustainable products has also driven the steady growth experienced by the sector.
Despite this, the main challenge to the paper-based packaging sector is increasing investment and development of biodegradable plastic packaging.
However, the report reiterates that paper packaging is “already infinitely recyclable,” which the report suggests will ensure its continued packaging material dominance.
“Paper packaging growth in the food and beverage sector – traditionally its largest end-usage – is providing a strong reason for optimism among paper packaging manufacturers,” said the report.
Supermarkets flourishing in both developed and developing economies and technological advances in the food packaging sector driven by consumer demand for convenience have also been attributed as factors.
A trend referred to as ‘cocooning’, where consumers attempt to recreate the restaurant experience at home, has also driven sales of packaged food - of which between 40 and 50% is paper-based.
“Opportunities for paper packaging exist in the expanding emerging markets where demand is continuously growing,” said the report.
“New application and substitution is possible where consumer knowledge of sustainability is growing.”
“The strength of paper packaging in the mature markets will ensure steady growth for those that continue to develop their products.”