Rising incomes, longer life expectancies, smaller households, tinier carbon footprints, lower waste, greater safety, better security and continuous consolidations together will have a measurable and meaningful impact on all packaging that’s both printed and produced this decade.
That’s the word from the long-term market watchers at Smithers. The firm’s recently issued white paper, The Future of Packaging: Long Term Strategic Forecast to 2028 (and summarizing a report of the same title) categorizes those trendlines into four major classifications:
- Demographics
- Sustainability
- Consumer behavior
- One world—the global market
Issued in January, the document offers in-depth analysis on those critical points and includes an easily digestible infographic as reinforcement. It professes that “the global packaging market is set to expand by 3 percent per year and soon top $1.2 trillion in volume.” This comes on the heels of a 6.8 percent growth pattern reported by Smithers for the five-year period between 2013 and 2018. Contributing significantly to accelerating demands: e-commerce.
Demographic Diagram
According to Smithers researchers, “General expansion in the global economy is expected to continue, boosted by growth in emerging consumer markets. There is the prospect for short-term disruptions from the impact of Brexit, and any heightening of tariff wars between the US and China.” That said, the team added, “In general, however, incomes are expected to rise, increasing consumer income for spending on packaged goods.”
Other points of note highlighted indicated that the global population will expand, especially in key emerging markets, like China and India, and the rate of urbanization will continue to grow. “This translates into increased consumer incomes for spending on consumer goods, as well as exposure to modern retail channels and the aspiration among a strengthening middle class to engage with global brands and shopping habits,” the research team stated.
Rising life expectancy will lead to an aging of the population—especially in key developed markets, like Japan. Smithers explained, “This will increase demand for health care and pharmaceutical products. Simultaneously, there is a need for easy opening solutions and packaging adapted to the needs of elders.”
Another key phenomenon of 21st century living—the rise in the number of single-person households—is pushing demand for goods packaged in smaller portion sizes, as well as more convenience like resealable closures or microwavable packaging, according to the report.
Behavior Patterns
In line with the move to single-person living, more consumers, especially younger age groups, “are inclined to go shopping for groceries more frequently, in smaller quantities,” Smithers remarked. “This has driven growth within the convenience store retailing, as well as boosting demand for more convenient, smaller-size formats.”
Extending their commentary to other trends, analysts decreed, “Consumers are also taking a greater interest in their own health matters, leading to healthier lifestyles. Therefore, this is boosting demand for packaged goods.” Examples of beneficiaries listed out: healthy foods and beverages (e.g. gluten-free, organic/natural, portion controlled); alongside non-prescription medicines and nutritional supplements.
Observing that, “The global market for online retailing continues to grow rapidly,” Smithers acknowledged that it was driven by penetration of the internet and smartphones. “Consumers are increasingly buying more goods online,” according to findings rendered. “This will continue to increase and will see an elevated demand for packaging solutions—especially corrugated board formats—that can safely ship goods through the more complex distribution channels.”
An additional statement further elaborated on the point. “More people are consuming products, such as food, beverages and pharmaceuticals, on-the-go. This is increasing demand for packaging solutions that are convenient and portable, with the flexible plastics sector one main beneficiary.”
“As more brands come under the control of one owner, their packaging strategies are likely to become consolidated.”
Tech Tie-Ins
“The 21st Century consumer is less brand loyal!” Smithers researchers proclaimed. “This is simulating an interest in customized/versioned packaging and packaging solutions that can create an impact with them. Digital (inkjet and toner) printing is providing a key means to do this, with higher throughput printers dedicated for packaging substrates now seeing their first installations.” Also noted, “This further aligns with the desire for integrated marketing, with packaging providing a gateway to link into social media.”
With up to 40 percent of food produced worldwide not eaten, minimizing food waste is another key goal for policy makers, the market watchers observed. They offered that it is one area where modern packaging technology can have a major impact. “For example, modern flexible formats, like high-barrier pouches and retort cooking, add extra shelf life to foods, and can be especially beneficial in less developed markets, where a refrigerated retail infrastructure is missing. Much R&D is going into improving packaging barrier technology, including the integration of nano-engineered materials.”
According to the report’s conclusions, “Minimizing food losses supports the wider use of intelligent packaging to cut waste within distribution chains and reassure consumers and retailers on the safety of packaged foods.”
Green Scene
Concern over the environmental impact of products is an established phenomenon, according to Smithers. “Since 2017, revived interest in sustainability focused specifically on packaging. This is reflected in central government and municipal regulations, consumer attitudes and brand owner values communicated via packaging.”
The European Union was credited in the research with having pioneered the now-global drive toward circular economy principles. One point emphasized: “There is a particular focus on plastic waste, and as a high-volume, single-use item, plastic packaging has come under particular scrutiny.” A number of strategies are advancing to address this, including:
- Substituting alternative materials
- Investing in the development of bio-based plastics
- Designing packs to make them easier to process in recycling
- Improving recycling and processing of plastic waste
Smithers surmised, “As sustainability has become a key motivator for consumers, brands became increasingly keen for packaging materials and designs that demonstrably show their commitment to the environment.”
“Modern flexible formats, like high-barrier pouches and retort cooking, add extra shelf life to foods, and can be especially beneficial in less developed markets, where a refrigerated retail infrastructure is missing.”
One World
Globalization has truly taken hold with many brands within the fast-moving consumer goods industry, the market watch team explained. Its popularity continues to rise, as companies seek out new high-growth sectors and markets. “Increased exposure to westernized lifestyles will accelerate this process in key growth economies.”
According to the forecast issued, “E-commerce and the globalization of international trade is also stimulating a demand among brand owners for components, like RFID labels and smart tags, to protect against counterfeit goods, and enable better monitoring of their distribution.”
Industry consolidation in merger and acquisition activity in end-use sectors, such as food, beverages and cosmetics, is also a guarantee to continue. That observation prompted another: “As more brands come under the control of one owner, their packaging strategies are likely to become consolidated.”
Editor’s Note: Smithers’ The Future of Packaging: Long-Term Strategic Forecast to 2028 is available for purchase. Smithers representatives plan to address drupa 2020 this June.