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Flexible packaging market to reach US$99,621.9 mln by 2018, US demand to rise 3.8% pa through 2015

Flexible packaging market to reach US$99,621.9 mln by 2018, US demand to rise 3.8% pa through 2015

28-Nov-13

The global flexible packaging market is estimated to grow from US$73,825.3 mln in 2012 to US$99,621.9 mln by 2018 at a CAGR of 5.1% from 2013 to 2018. Asia-Pacific led the global market followed by Europe and North America in terms of revenue in the year 2012, as per MarketsandMarkets. Flexible packaging market is a mature sector that has various stake holders such as raw material suppliers, processors, packaging manufacturers and end-user industries such as manufacturers of food, beverage, personal care products and pharmaceuticals. As opportunities to grow in these end-use markets are saturating in developed markets, players are struggling to diversify their product portfolio. The end-use products and their packaging are two interdependent markets. Any shift in one will directly influence the other market. Rise in the consumption of packaged products offers a strong customer base for the global flexible packaging market. Packaging is essential to preserve the quality of the product and it also prevents it from chemical reactions endangering the consumer’s health. Hence, an efficient and suitable packaging is imperative for every product. The important materials used in flexible packaging market are polyethylene, polypropylene, BOPET, EVOH, polyamide, paper, aluminum, cellulosic, and PVC. The raw material is converted into films that are further converted into pouch, sachet and bags in which the products are packaged. Consumer preferences, product characteristics, and material compatibility are essential in determining the type of packaging for the products. Food dominated the flexible packaging market and pharmaceutical segment promises a healthy and fast growth in the market. Asia-Pacific has the highest market share and is estimated to grow with a CAGR of 7.1% during the period under review. Europe is growing with a CAGR of 3.9%, and is driven mainly by the East European markets. ROW is also expected to experience growth in flexible packaging market in the future. The CAGR for ROW is 6.0% from 2013 to 2018. The four most potential nations for flexible packaging market are India, China, Russia and Brazil which are poised to exhibit the fastest growing trend. In the flexible packaging market, pharmaceutical packaging is the fastest growing market with a CAGR of 7.1% during the forecast period. Due to the increased awareness for public health, increasing product processing units, convenience packaging and rising consumption of generic drugs, the pharmaceutical packaging industry is exhibiting strong gains. Following it, the food packaging is estimated to be the second fastest growing market in 2013, due to the rise in consumption of packaged food. Growing health concerns and knowledge about the nutrition value is driving the market for packed products to preserve the end-products.

As per Freedonia, demand for active and intelligent packaging is forecast to climb 8% annually to US$2.3 bln in 2015, significantly outpacing overall packaging demand. Advances will be driven by the availability of products with more reasonable price points and those offering enhanced shelf life and/or improved quality. Additionally, gains will be supported by new mandates aimed at improving food safety and by the leveraging of smart phone applications to bring interactivity to packaging. However, in spite of rapid increases, active and intelligent packaging will continue to represent less than 2% of overall packaging demand through 2015. Demand for intelligent packaging is expected to expand at nearly 20% annually to US$370 mln in 2015, propelled by rapid growth for Quick Response (QR) and other two-dimensional (2D) barcodes. Demand will also be fueled by greater use of time-temperature indicator (TTI) labels and tags due to the increased presence of temperature- sensitive drugs and new regulations calling for increased track and trace capabilities with perishable foods. Gains for pharmaceutical compliance monitoring packaging will be supported by the development of more cost-competitive products and efforts to boost adherence levels. However, slow acceptance by the pharmaceutical industry will limit usage largely to clinical trials. Growth for intelligent packaging overall will also be restrained by competition from electronic data logging devices and systems used for monitoring of temperature-sensitive goods. Demand for active packaging is projected to increase 6.5% pa to US$1.9 bln in 2015. Gains will be driven by above-average advances for gas scavengers, the result of expanded applications for oxygen scavengers in food, beverage and pharmaceutical packaging. Additionally, growth will be propelled by solid prospects for susceptor packaging in applications other than microwave popcorn and robust increases for self-venting packaging. Technology improvements will support further development of niche active packaging segments such as antimicrobial packaging. Moisture control and corrosion control packaging demand will post slower advances based on the presence of more mature product types and applications.

Demand for converted flexible packaging in USA is projected to increase 3.8% pa to US$18.2 bln in 2015, as per Freedonia. Gains will be similar to the pace of the 2005- 2010 period based on the now more well-established presence of pouches in a number of food and nonfood markets coupled with overall deceleration in raw material price growth. Volume increases, however, will accelerate from the previous 5 year performance as a result of real growth in consumer non durables as the US economy rebounds from the 2007-2009 recession. In addition, gains will be supported by cost, performance and source reduction advantages over most rigid packaging formats. Converted flexible packaging’s source reduction capabilities will be increasingly advantageous in light of initiatives by major retailers and packaged goods firms to evaluate their packaging in terms of eco friendliness and cost reduction. Pouches will experience above-average advances, with demand expected to increase 4.6% pa to US$8 bln in 2015. Growth will be driven by continued conversions to stand-up pouches and healthy gains for flat pouches in a number of markets, along with a smaller environmental footprint due to light weight and reduced material use, which also holds down shipping costs. Additionally, the ageing of rigid packaging equipment will create openings for replacements by pouch packaging equipment over the coming decade. Gains for bags will be moderated by the maturity of many applications along with competition from pouches and rigid packaging. Still, advances will represent an improvement from the 2005-2010 performance based on the expected recovery in the US economy. Plastic bag demand will outpace that of paper bags due to cost and performance advantages, along with widespread usage in baked goods, produce, meat, frozen food and grain mill product applications. However, growing efforts by packaged goods firms to demonstrate their commitment to sustainability will lead to some degree of renewed interest in paper, which possesses such qualities as renewability, recyclability and compostability. While overall gains for other converted flexible packaging, primarily wrap products, will lag the market average, above-average prospects are anticipated for pharmaceutical strip packs and specialized film packaging with meat products.

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