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Factors affecting packaging market in weak economic scenario since 2008

Factors affecting packaging market in weak economic scenario since 2008

The global economic and financial slowdown since 2008 followed by weaker than estimated economic recovery has led to identification of the prospects and most important factors affecting the packaging market in difficult times. Key factors like the economy, sustainability, private branding and other developments are likely to impact packaging during the coming years. The economy is the major driver of packaging, hence growth and recovery will have a major impact on the packaging market. Consumer buying pattern has changed since 2008. Consumer evaluation is leading to purchase of products that provide higher value at a lower cost. This new behaviour will continue until economic growth returns and recovery is well underway. Many developed countries are witnessing a shift in consumer base as the average age of the population is increasing, leading to an increasing segment of people beyond retirement age with less spending capability. A bid to save costs in a weaker economic condition will compel packaging to be less sophisticated and simpler as an increasing number of consumers think that at present, packaging is more than required. Material saving will also be a key factor for packaging producers. Investments in higher cost, new machines and equipments could get adversely affected as processors would be inclined to stall capital investment or scout refurbished equipment in unavoidable circumstances. The newly introduced environmental concerns and regulations like REACH, WEEE, etc, will lead to an increase in capital as well revenue expenses. Product and food safety also are likely to impact packaging, along with material costs, color coding, innovation and the integration of product processing and packaging.
The Packaging Machinery and Manufacturers Institute (PMMI) that conducted focus groups with 85 senior executives from consumer product goods (CPG) companies, concludes that trends sprouting from the recession include increased demand for refurbished or upgraded packaging machinery, surges in demand for co-packing and contract-packaging operations and consumers' new-found affection for private-label products. CPGs are cutting costs throughout their businesses, reducing labor costs through automation and technology, rigorously evaluating all expenditures, upgrading and consolidating facilities for the sake of productivity and eliminating non-core or poorly performing business lines and products. As a result, Marla Donahue, president of the Flexible Packaging Association, says, consolidations will continue to impact most segments of packaging with fewer packaging suppliers creating increased competition. While sustainability considerations have become essential, there is an emerging strong push for coordinated and cooperative efforts in packaging sustainability. The US packaging industry will definitely be impacted by the work of International Organization for Standardization (ISO) to harmonize packaging sustainability, with the possibility of bringing in elements of the European Union's Packaging Directive. In addition, the CEO Forum's Global Packaging Initiative and the Walmart-supported Sustainability Index Consortium will be creating measurement tools that packaging manufacturers will have to consider. Companies are understanding and increasingly using life-cycle assessments to look at the tradeoffs between rigid and flexible packaging, pointing out that with flexible packaging, two pallets of materials can equal a whole truckload of rigid incoming materials. Packagers and their suppliers are making advances in manufacturing flexible packaging from renewable resources such as sugar cane. Bioplastics will be used in applications where they pay off. Food safety is the most major issue for the public and will continue to affect packaging materials; leading companies to seek new packaging that helps ensure healthy and safe products. Packaging that can help prevent mislabeling, spoilage, product tampering, contamination or damage is likely being in demand.
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 Kautex KB15 blow moulding Machine

Kautex KB15 blow moulding Machine