The worldwide packaging market is faced with several potentially transformative challenges. On the one hand, the pandemic accelerated a paradigm shift towards e-commerce but has also presented significant supply chain challenges. At the same time, businesses must contend with increasing urbanisation, consumers’ desire for convenience and a strong regulatory emphasis on sustainability.
The combination of these drivers highlights four significant megatrends that are currently shaping the packaging industry.
E-commerce drives the rise of durability
E-commerce has been a viable and growing retail segment over the past decade. The pandemic's restrictions prompted businesses around the world to swiftly shift towards digital solutions in their operations. Forced to stay at home, consumers accelerated their purchases of online goods and services.
According to a report by the United Nations Conference on Trade and Development, the average share of internet users who made purchases online went from 53% in 2019 to 60% following the onset of the pandemic (2020/21) across 66 countries where statistics are available.
Innovating to keep up with the times
IMCD research shows that growth has been significant in the food and beverage industries, where daily staples and fresh food are being sourced through online channels.
For brands, a key challenge is finding packaging that enables goods to survive the journey from origin to the point of delivery. Whether it is food or other industries, such packaging should typically be lighter, puncture resistant and transparent. In other words, it should be easy to carry and weigh as little as possible. Finally, the customer should be able to see and check, at a glance, what the package contains – and whether goods received are indeed what was ordered.
Depending on the product, IMCD’s partners can provide a wide range of material types to meet specific needs, including appearance, weight, food use, shelf life, temperature range, reheating and environmental footprint.
Smart packaging emerges
Rising digitalisation and globalisation in recent years are affecting the packaging industry in two different ways.
1. As e-commerce grows, packaging becomes more important. Consumers aren’t just looking at what’s in a package, but they’re increasingly looking at what the packaging itself is telling them. Indeed, 72% of customers say packaging influences purchasing decisions.
More than ever, when there is limited interaction with sales teams, packaging is critical to brand recognition. Used correctly, it can convey a brand’s mission and values. For example, recyclable or biodegradable boxes can demonstrate a commitment to sustainability.
2. A second consequence of rising digitalisation is the corresponding increase in value leaks for brand owners. Logistics inefficiencies in the wake of the pandemic, for example, have seen trucks disappear along with their cargo, creating opportunities for counterfeiting. Likewise, distributed manufacturing has its disadvantages.
Brand owners and manufacturers in exposed industries such as luxury cosmetics, pharmaceuticals and even the food sector, are therefore investing in smart packaging and in solutions that protect the integrity of their products. Several anti-counterfeit technologies are being explored to reduce counterfeiting of these packaged products, including digital solutions.
The art of pivoting
DNA-based additives and other innovative additives are helping track and trace counterfeit packaging. When combined with the main raw material during production, the additive changes the molecular composition of the package. A perfume flagon, for instance, can easily be identified as genuine or fake with such an additive. Further, each batch of flagons produced can be customised with its own code.
Using software in the cloud, brand owners can then track the item at every point along its journey anywhere in the world, minimising counterfeit packaging. Traceability puts the brand owner in control of the product.
IMCD can help develop smart packaging solutions to suit brand owners’ unique needs.
Flexible and convenient solutions for changing demographics
The world is going through profound demographic shifts as we add another two billion people over the next three decades. The United Nations estimates that Earth will be host to 9.7 billion in 2050, up from 7.7 billion at present.
Along the way, we will see several demographic changes. Rapid urbanisation is leading to more people living in cities than ever before – from 55% at present to 70% by 2050. People over the age of 65 now comprise the world’s fastest growing age group. And hundreds of millions of people are expected to escape from poverty into the middle class, particularly in developing countries in Asia and Africa.
These developments offer the opportunity for new products and services. Increasing consumer incomes is projected to lead to higher spending on consumer and packaged goods. The rise of life expectancy and a strengthening middle class will see shoppers engage with global brands. Meanwhile, urbanisation will drive the growth of single-person households.
As life gets busier, consumers will demand convenient, time-saving solutions across every FMCG category. In the food sector in particular, microwavable packages that can be opened and resealed easily will find favour with urban consumers as ready meals become more popular with time-poor city residents.
Anticipate the change
From a packaging perspective, brands should anticipate the rise of portable, on-the-go packaging in smaller-size formats. Packages will need to be universal in nature, so that people of all ages can easily open them to access the product. Flexibility takes precedence over rigidity. Overall, industry projections estimate the global flexible plastic packaging market to clock a combined annual growth rate of 4.5% to 2025, according to MarketsandMarkets.
IMCD anticipates the trend with a variety of flexible and convenient packaging solutions, so customers have the right material for each use case.
Increasing recyclability to promote sustainability
Sustainability is driving changes across the packaging sector as regulators move on the issue in response to consumers’ concerns around single-use containers.
An April 2022 study of 15,000 global consumers found that revealed that 86% of respondents under the age of 45 said they would be willing to pay more for sustainable packaging, up from 83% in 2021. About 57% of consumers said they were less likely to buy products in harmful packaging, while 68% said they have chosen a product in the last six months based on its sustainability credentials.
Find the right balance
For brand owners, sustainability drivers include improving product shelf life to reduce wastage, reducing their carbon footprint and improving circularity. Packaging structure goes a long way to achieving these aims – although there is not one particular solution.
Replacing multi-material packaging with mono-material alternatives, for example, can extend recyclability. On this front, IMCD proposes recyclate polymers made from household and commercial waste that directly reduce landfill surplus.
A third solution is to use packages where recyclable and non-recyclable components can easily be separated.
A similar step towards sustainability could involve light-weighting or downgauging packaging over the medium term. However, in many cases, multi-material packaging may offer more advantages than mono-material alternatives because of its superior shelf-life and cost benefits. For brands and consumers alike, extended shelf life optimises usage.
It is therefore important for manufacturers to find the right balance between multi- and mono-material packaging solutions. In the final analysis, owners must weigh performance against sustainability to find the solution that best suits their needs.
Differing speeds shape market response
While the trends outlined here are common to most global markets, adoption speeds may vary according to local considerations, internal IMCD research shows. While manufacturers in Central and Western Europe are very focused on flexible packaging to reduce the total amount of plastic waste, rigid packaging that is easier to process remains the norm in many other regions. So too do recycling facilities differ from country to country. Without adequate recycling, manufacturers may be left with no option other than to continue doing business as usual.
With a presence in more than 50 countries, IMCD’s experts are well positioned to advise on the most appropriate packaging solutions to meet each market’s unique needs.
Book a consultation with your local IMCD office today.
With more than 20 years working in the polymer’s industry, Marta has a wide experience across all areas of converting, compounding and formulation of different materials, including those technical ones such the design, development, analysis, and final application. Marta is a sales manager based in Spain and also leads the global Packaging Expert Team. Her technical vision and experience with polymers’ applications in different fields have prepared her to support IMCD customers in developing innovative solutions that differentiate their products on the market.
About Massimo Salvucci
Massimo has 25 years of experience in the plastic industry, starting from the beginning as technologist, researcher, technical assistant, responsible of compounding and extrusion departments. After that, his career path is proceeding as sales manager, product manager and market manager Converters. Thanks to a strong experience in a multinational group leader in the Packaging, producer of both polymers and final products; thanks to a close collaboration as product manager with suppliers of products directly and mainly involved in the Packaging, he is part of the global Packaging Expert Team. Massimo is based in Italy and has been working in IMCD for more than 9 years.
Four major megatrends are shaping the packaging industry: the rise of e-commerce, the emergence of smart packaging, increasing urbanization, and regulatory emphasis on sustainability.
A key challenge for brands is finding packaging that can withstand the journey from origin to point of delivery. Such packaging must be puncture-resistant, lightweight, transparent, and be able to protect its contents and survive the transport process. The packaging must also be able to convey to customers what the package contains and whether goods received are what was ordered.
Brand owners and manufacturers are investing in smart packaging solutions that protect the integrity of their products and ensure that genuine customers are not conned by imitation items. DNA-based additives are one such solution that helps track and trace counterfeit packaging. When combined with the main raw material during production, the additive changes the molecular composition of the package. Brand owners can then track the item at every point along its journey anywhere in the world, minimizing counterfeit packaging.
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