Page 10 - Packaging News Magazine May-June 2020

10 INDUSTRY INSIGHT | www.packagingnews.com.au | May-June 2020
World packaging
market to top
US$1 trillion in 2024
Packaging demand across the world reached US$917.1bn in 2019 and is expected to grow in the coming four years, although modestly in Australasia, according to data from industry analyst Smithers.
CONSUMPTION at current prices has increased from US$861bn in 2014 to US$891bn in 2018, a compound annual growth rate (CAGR) of 0.9 per cent. Analysis in Smithers’ comprehensive study the Future of Global Packaging to 2024 forecasts market expansion across 2019–24 at a 2.8 per cent CAGR
to reach US$1.05 trillion in 2024.
Asia is the largest market and accounted for40.6percentofworldpackagingcon- sumption in 2018. North America is in second place with 22.6 per cent of world packaging consumption, ahead of
Western Europe with 20.3 per cent.
DEVELOPING MARKETS
The market will benefit from rising real incomes, growing population, rising urbanisation, and the further develop- ment of a retail infrastructure in the emerging and developing nations of Asia, Africa, the Middle East, and Eastern Europe. This will see all of these regions register packaging consumption grow faster than the world market average rate over the five-year period to 2024.
In contrast, more mature markets – North America, Western Europe and Australasia – are forecast to see slower growth, placing a new emphasis on inno- vation and diversification for packaging suppliers.
China is the world’s largest packaging consumer with consumption of US$207bn in 2018, ahead of the
US on US$173bn,
and Japan on US$48.5bn. Over the past five years the fastest growth has come from India, worth US$40.1bn in 2019, it has over- taken both France and Germany to become the fourth- largest national mar- ket in the world.
AUSTRALIA IN CONTEXT
Australia is the largest packaging market in Australasia and accounted for approxi- mately 80.0 per cent of sales in 2018. New Zealand is the second largest national market with almost 10 per cent of sales. They are both mature packaging markets, with high packaging penetration.
In Australia, packaging sales at current prices grew during 2014-18 from $12.2bn (AUD) to $13.9bn, an annual average growth rate of 3.4 per cent. In US dollar terms, packaging sales at current prices declined from US$11.0bn to US$10.4bn during the same period, an annual average fall of 1.3 per cent.
A reversal of this downward trend is forecast. As the region enter the 2020s it will return to growth, at a modest rate of 1.3 per cent. This will push the total value above US$14bn (AUD $21.3bn) in 2024 for the first time.
SUSTAINABILITY
Sustainability, recycling, over packaging and bans on single-use plastic packaging are key issues for suppliers in developed packaging markets, led by Western Europe. Growing consumer concern over the pres- ervation of the environment is driving demand for more sustainable packaging, based on renewable resources. The ease with which packaging can be collected and recycled is growing in importance for packaging producers, brand owners and
governments.
There is mounting
public pressure, now being backed by leg- islation like the EU’s Single-use Plastics Directive, to limit the use of plastic for- mats. In response brand owners and retail chains are committing to phas- ing out non-recycla- ble and difficult to
recycle multilayer flexible packaging mate- rials in favour of more sustainable alterna- tives, such as paper and paperboard.
MATERIAL DEMANDS
Paperboard is the most used packaging material, accounting for around a third of world packaging markets consumption, followed by flexible packaging at 25.5 per cent, rigid plastics at 18.7 per cent, and metal at 12.1 per cent. Glass packaging accounts for 5.8 per cent and other packag- ing 4.7 per cent.
Concern for the environment is benefit- ing the corrugated board market due to the perceived and real environmental benefits in using cellulose-based packaging. Lightweighting of board construction is reducing the rate of volume growth slightly, but value is forecast to rise faster.
Online shopping will continue to chal- lenge corrugated packaging designers in developing frustration-free packaging options. In conventional retail corrugated packaging companies are emphasising shelf-ready packaging to reduce the work- load for unpacking and displaying.
Despite environmental concerns, world- wide flexible plastic is set to grow at the fastest rate over 2019-2024, followed by rigid plastics and board. The retail sec- tor’s growing demand for extended shelf life for packaged product and consumer demand for convenience products are
In Australia, packaging sales at current prices grew during 2014-18 from $12.2bn to $13.9bn, an annual average growth rate of
3.4 per cent.