- Global packaging industry by material type
- Emerging trends in the plastic packaging industry
Global packaging industry by material type
The global packaging industry has a significant value addition to the global supply chain and the current industry size is estimated at ~$850 billion (2017). The industry is classified into two major types, which is based on the structural properties of the packaging material, that is, rigid and flexible packaging. The industry has evolved over the years and the earliest use of packaging was estimated to have begun as early as 1200 BC. The global packaging industry has four major material types, which are paper and board, plastic, glass and metal packaging. The types of packaging are also differentiated on the basis of their interaction with final consumers and the purpose of the packaging products, which includes primary, secondary and tertiary packaging.
The largest end-user industries for the global packaging demand arises from food, beverages, consumer products and industrial/bulk packaging. The largest consumption demand for both the primary and secondary packaging emerges from food, beverages and consumer products packaging, whereas industrial and bulk level packaging (tertiary packaging) is consumed by all the major manufacturing industrial sectors globally and thus, forms the largest demand consumption for packaging in the global economy. In 2017, the food packaging industry had a significant market size of ~$243 billion, while the beverage packaging industry had a market size of ~$84 billion. The consumer product packaging, which includes products that are for direct use by the end-users excluding food and beverages can be segmented into four major groups, which are personal care, health care, tobacco and other consumer products. The packaging market size of these combined consumer products industries was estimated at ~$159 billion in 2017. Further, industrial/bulk packaging is the largest segment of the packaging industry, which had a total packaging consumption demand of ~$375 billion in the same year.
In Televisory’s report titled the ‘Global Plastic Packaging Industry’, an in-depth analysis was conducted on the present demand-supply balance in the plastic packaging industry and an assessment of the projected demand from the key end-user industries was initiated. The industry structure was also analysed and the emerging industry dynamics, which has the potential to disrupt the currently established packaging value chain was assessed for their impact on the outlook of the plastic packaging industry.
Emerging trends in the plastic packaging industry
The plastic packaging industry forms ~34% of the total packaging industry, with a market size of $289 billion. The industry has seen the fastest growth over the past 10 years and grew at a CAGR of ~5.8%. This is attributed to certain characteristics of plastic packaging, which include its versatility, lightweight, cost-effectiveness and durability. Plastic packaging serves both the rigid and flexible segments through products which include flexible plastic films, rigid structures made from injection moulding and blow moulding, and co-extrusion products. The utilization of plastic packaging includes a mix of both the rigid and flexible packaging and the requirements of each type are primarily dependent on the type of product being packaged and the design of the packaging.
The plastic packaging converter industry finds a unique position in the economic value chain. Televisory’s analysis reveals that the cost leadership, economies of scale and competitive quality are the key competitive advantages in the plastic packaging industry. The total capacity for plastic converters globally was ~274 million tonnes in 2017 and the global utilization levels of plastic converter capacities were relatively stable between 80-90% during the analysis period. Televisory estimate that ~36% of the total global plastic capacity and the production is directed towards plastic packaging and this varies on a regional level due to demand-side factors. Moreover, during the period of 2007-17, the plastic consumption demand grew at a CAGR of 3.2% and was ~84 million tonnes of volume consumption in 2017. On a regional level, the Asia Pacific volume demand for plastic packaging had a share of ~57% of the total world plastic packaging demand by volume, making it the largest and the fastest growing region for the plastic packaging demand globally.
The growth story of the plastic packaging industry has seen different dynamics in the large economic regions of the world. The Asia Pacific region has been the major growth driver during the 2000-17 period due to its rapidly growing consumer demand. The dynamics of the Asia Pacific region were highly supportive for the growth of the plastic packaging industry as the region houses more than 60% of the world’s population accompanied by a relatively low base of per capita consumption.
However, the plastic packaging industry has seen certain major regime shifts during the period that are creating opportunities and threats in the industry. These include the waste plastic import ban in China, the European Union’s policy on plastic packaging recycling and the emergence of bioplastics. A sharp criticism due to the global piling up waste that the plastic packaging industry has been confronting and has been critically assessed through a life cycle analysis of plastic packaging. The conclusions drawn are supportive for continued expansion of the plastic packaging demand globally, especially in the high growth regions of the world.
Televisory has projected that the growth outlook for the plastic packaging industry on the global and the regional levels. As the consumption of plastic packaging is dependent upon the growth at the end-user industries, Televisory followed a multi-factor approach to project the demand outlook for plastic packaging. We also incorporated qualitative factors that are emerging in the packaging industry, which include consumer lifestyle factors and supply-side trends. Our analysis indicates an outperformance of the plastic packaging industry during the forecast period of 2018-22.
The company section of the report covers some of the world’s largest packaging companies, which are as follows:
- Amcor Limited
- Bemis Company, Inc.
- Sealed Air Corp
- Sonoco Products Company
- Berry Global Inc.
- Greif, Inc.
- Huhtamäki Oyj
- RPC Group PLC
- CCL Industries Inc.
To gain a deeper understanding of the global plastic packaging industry dynamics, please subscribe to Televisory’s report on the ‘Global Plastic Packaging Industry – Outlook 2022’ at: https://www.televisory.com/specialReports