Europe Paper Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Europe Paper Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Europe Paper Packaging Market is expected to grow at a CAGR of 4.8% over the forecast period (2022 - 2027). One of the key factors driving the expansion of the paper packaging market in Europe is the rising demand for environmentally friendly and recyclable packaging options.

Key Highlights

• Paper packaging is a low-cost and versatile way to protect, store, and transport various products. It can also be customized to satisfy the needs of consumers or product-specific requirements. Attributes like biodegradability, lightweight, and recyclability of paper packaging make it an essential component for packaging. This type of packaging is currently used for designing new and beautiful models and adding branding functions.
• According to the Office for National Statistics, United Kingdom, E-commerce has experienced tremendous growth in 2021, as internet sales in January accounted for 37.8% of total retail sales (an all-time high). A stronger-than-anticipated growth in e-commerce sales due to increasing safety and hygiene consciousness, healthy double-digit growth in domestic pharmaceutical sales, and a revival in durable consumer sales are driving demand for paper packaging.
• Further raising demand for paper packaging will be technological breakthroughs in the food industry, such as developing laminated and coated papers to prevent leakage. The paper packaging market is expected to be the fastest-growing segment because it is efficient, innovative, adaptable, and sustainable, adding value to food and other products.
• The major challenge faced by the paper packaging market is the inability of paper to package heavy materials, resulting in the industry being dominated by the polymers and metal packaging industries. Furthermore, deforestation for raw material procurement and the discharge of dioxins during paper production are environmentally hazardous. As a result, the growth of the paper packaging market is hampered.
• The impact of Covid-19 on the market is expected to be significant in the short run as the global lockdown has disrupted the whole packaging supply chain. However, companies like Mondi PLC and DS Smith PLC continue to operate to deliver essential items like beverages, food, hygiene, and healthcare products to the people. Also, in the long run, with businesses becoming normal and e-commerce trends on the rise, the market is expected to rebound back.

Key Market TrendsIncreasing E-Commerce Sales will Drive the Market Demand

• An enormous rise in online shoppers has been seen in recent years. E-commerce businesses have experienced significant increases during prime shopping holidays due to the growing number of clients. As a result, paper packaging has been increasingly utilized by e-commerce businesses. According to a Eurostat survey conducted in 2021, the percentage of internet users who did online shopping in the 12 months preceding the study varied greatly across the European Union, from 94% in the Netherlands to 42% in Bulgaria and 44% in Romania. The percentage of online shoppers among EU citizens aged 16 to 74 was 66%, with Bulgaria having the lowest rate (33%) and Denmark having the highest (91%).
• E-commerce businesses have relied heavily on corrugated boxes since they can have any desired form and fixed standard sizes and have many products on their website. The companies also apply for additional interior protection within the box for more delicate and high-end products. Increasing E-commerce Demand for Sustainable Corrugated Packaging in France drives the International Paper Company to invest Over EUR 20 Million, as reported in May 2022. Customers can choose from even more environmentally friendly packaging thanks to the company's adaptation of its production capacity to the expansion of the e-commerce industry. Fifty new positions in France will be created as part of the project.
• Also, installing new machinery will raise the converting capacity of the Mortagne and Chalon sites by 60% and 50%, respectively, representing the two facilities' largest investment in several years. As a result, International Paper will be able to provide consumers with an even greater selection of upscale corrugated packaging options.
• Furthermore, the consumer electronics industry for mobile devices is the most developed, has the largest penetration, and is expanding due to technical developments. As a result of this expansion, e-commerce businesses now work together on product releases and distribution, which boosts demand for the e-commerce packaging market.
• The market is now driven by a growing retail and e-commerce industry and increased demand for eco-friendly packaging materials. The rapid expansion of online shopping platforms has increased demand for secondary and tertiary packaging products. Changing consumer attitudes toward sustainable packaging, as well as the implementation of favorable government policies, all contribute to the growth of the packing paper market.
• According to Office for National Statistics, E-commerce has experienced tremendous growth in 2021, as internet sales in January accounted for 37.8% of total retail sales (an all-time high) in the United Kingdom. The value of online sales as a share of all retail sales in the United Kingdom (UK) in January 2022 was 27.1 percent. Comparatively to the prior month, when online retail sales made up 27.9% of all retail sales, this was a slight decline. However, there was significant retention of online retail sales. Such considerable market share will likely continue in the future as well.
• Germany has the largest e-commerce consumer base, with 62.1 million online buyers, according to PostNord, a provider of postal services, in 2021. Following the United Kingdom with around 50 million online shoppers, France came in third with 44.7 million as of 2021. Large e-commerce users indicate that online shopping is widespread in the region, which increases the demand for paper packaging.

Food Segment is Expected to Hold a Significant Market Share

• Convenience foods are becoming more popular in European countries due to people's hectic lifestyles. The demand for corrugated boxes or folding cartons, frequently used as secondary or primary packaging in the case of a bakery or prepared food dishes, rises due to the immediate pull of many customers that cooked food generates. The need for healthy and convenient processed foods is growing in line with population growth.
• Paper board packaging is utilized more frequently to give consumers better results, especially as an alternative to secondary or tertiary packaging, since it keeps moisture away from products and can resist lengthy delivery times. Demand for these packaging materials is increased by the need to utilize them only once when packing processed meals like cakes, bread, and other perishable goods. ​
• Rising government regulations requiring enterprises to use sustainable packaging materials to reduce packaging waste are driving up demand for paperboard packaging. For instance, by 2040, all single-use plastic packaging will be prohibited in France under the anti-waste law for a circular economy. Additionally, beginning in January 2022, it will be illegal to overpackage certain fresh fruits and vegetables that weigh less than 1.5 kg in plastic. The packaging producers made of paperboard are ideally suited to adapt to these changes. ​
• According to DS Smith, in July 2022, a sustainable packaging manufacturer announced that the company's ambitious plastic replacement program has resulted in the design of over 313 million pieces of problematic plastic in just the previous two years. The designers at DS Smith have produced several ideas to replace even the smallest amounts of plastic in its packagings, such as plastic sealing tape being swapped out for self-locking cardboard flaps and plastic labels being replaced with print straight onto cardboard. Customers have requested improvements from the company in the past year to replace single-use, non-recyclable plastic products like meal trays, fruit and vegetable containers, and six-pack rings. ​
• The producers of high-quality products compete intensely in the food industry. These factors enable several food industry producers to consistently produce and supply high-quality goods. Supermarkets and hypermarkets are expanding in number. The factor is anticipated to be significant in driving demand for paper and paperboard containers. The packaging market will likely continue to grow as a result.
• According to the UN Comtrade, the biggest markets for Spanish fruit exports are the states in the European Union. In 2021, only European nations were represented in the top ten list of fruit export destinations. France and the United Kingdom are next on the list, with exports worth more than USD 1 billion each, after Germany, which tops the list with a value of more than USD 3 billion. Most fruits and vegetables shipped under the food category are packaged in paper using methods like corrugated boxes, folding cartons, etc. Europe has a greater need for paper packaging due to the high export demand.

Competitive Landscape

The Paper Packaging Market in Europe appears to be consolidated as a significant market share is generated by a few firms. This industry research report offers information about players' competitive environment in this market. Major players include Smurfit Kappa, DS Smith PLC, Mondi Group, and Hamburger Containerboard GmbH.

• May 2022 - Smurfit Kappa has developed a sustainable and innovative water-resistant paper. AquaStop is part of Smurfit Kappa's new TechniPaper portfolio, Which brings a new era of sustainable packaging (Grease-proof, slip-resistant, moisture-resistant, flame-retardant, anti-static, and heat-sealable papers), which consists of an array of high-performance papers designed to bear even the most complex supply chains.
• September 2021 - As part of a EUR 25 million investment in more sustainable solutions, Heinz has partnered with WestRock to remove 550 tonnes of plastic packaging from multipacks in United Kingdom supermarkets. On supermarket shelves, Heinz's recyclable paperboard sleeve will replace shrink-wrapped multipacks of Heinz Beanz, Heinz soups, and Heinz pasta types. WestRock developed the recyclable, renewable, responsibly sourced, and carbon-neutral paperboard sleeve as part of Heinz's EUR 25 million investment in sustainable packaging solutions. Following successful testing on Heinz to Home, the new sleeve will be available in stores across the country beginning in September 2021.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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