North America Flexible Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

North America Flexible Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The North American Flexible Packaging Market was valued at USD 40.70 billion in 2020, and it is projected to be worth USD 47.58 billion by 2026, registering a CAGR of 2.61% during the forecast period (2021-2026). The impact of COVID-19 on the market is significant in the short-run, as the global lockdown has brought the entire packaging supply chain to an almost grinding halt. However, with online shopping on the rise, the market is expected to rebound in the long-run.

There has been a considerable increase in residential trash, which significantly comprises flexible packaging products as a result of more stay-at-home dining and COVID has exposed vulnerability in the supply chain globally, resulting in various disruptions, including some stores stopping collection of store drop-off for grocery bags and flexible packaging.

Key Highlights

• Technological innovation, sustainability trepidations, and attractive economics are among the reasons for the remarkable growth of flexible packaging in the last two decades in the United States. The way consumers view and interact with packages is altering. Due to the rising focus on sustainability, traditional rigid packaging solutions are being substituted by innovative and more sustainable, flexible packaging. The growing market demand for customer-friendly packages and heightened product protection is expected to boost flexible packaging as a viable and cost-effective substitute.
• Flexible packaging in North America is rising faster than many other forms. It includes trends, like e-commerce, digital printing, and sustainability, which can be used to drive market development and growth. Customers in the region are eager to pay more for certain product attributes boosted by flexible packaging. For instance, according to the Flexible Packaging Association, more than 60% of North American consumers are keen to pay more for tangible and functional packaging benefits, such as product protection, shipping friendly, and supply chain efficacy, among others.
• Customers in the region are willing to pay an additional amount for food stored in flexible packaging. For instance, more than 46% of Americans are willing to pay more for food and beverage products stored in flexible packaging than for food products kept in non-flexible packaging. Moreover, 71% of Americans said they may prefer flexible packaging over non-flexible packaging when asked to pick between flexible and non-flexible packaging for a product they consider purchasing (Flexible Packaging Association).
• Flexible packaging is mainly used for food, contributing to more than 60% of the total market. The US flexible packaging industry is witnessing healthy growth, as the industry was able to implement innovative solutions for many packaging challenges it faced. According to the Flexible Packaging Association, brand owners are taking on films, pouches, and bags as a go-to packaging solution, acknowledgments in part to extensive acceptance by American consumers.

Key Market TrendsThe Increased Demand for Convenient Packaging by Millennial Customers Might Drive the Market Growth

• The National Retail Federation estimated that sales from over 1 million retail establishments in the United States reached more than USD 3.8 trillion in 2019. Additionally, retail industry sales are expected to increase between 3.8% and 4.4%, with e-commerce retail sales expected to grow by 10-12%. Numerous growth opportunities exist in the US retail market for retail providers of all sizes. According to US Census Bureau, in 2019, the US retail industry generated USD 5,411 billion in sales, out of which e-commerce accounted for USD 578.5 billion.
• The significant share contributed by e-commerce is expected to positively impact the market as many companies have not yet optimized packaging for e-commerce, and overpacking is common while shipping products from a distribution center to a consumer. Because shipments are usually broken down into individual packages for delivery, this causes not only additional wastage but also energy consumption and pollution due to the increasing complexity of this retail chain. Flexible packaging offers performance features, such as waterproof and lightweight materials, better dimensional weight benefits, all of which are attractive to e-commerce providers.
• The demand for flexible packaging products is significantly driven by millennial customers in the region, as they have a considerable preference for on-the-go style and single-serving food and beverage foodstuffs. As these products are typically designed to be durable, portable, and lightweight, flexible packaging stands to be a famous option to pack such products. Growing areas of snack foods, both in terms of fresh items and processed foods, are anticipated to govern the requirement for flexible packaging from the food and beverage industry of the region.
• Furthermore, advanced packaging styles, such as collapsible or reusable pouches, bag-in-box, among others, are growing the usage of flexible packaging coupled with rigid packaging formats. Products, such as pouches, bags, liners, and shrink wraps, are opening up a broad range of the latest applications for the flexible packaging market. Besides, consolidation of the e-commerce sector in the North American region is anticipated to make flexible packaging one of the fastest rising packaging approaches over the forecast period.

United States is expected to Remain the Largest Market for Flexible Packaging

• With the growing demand for flexible packaging, players are making a significant investment in product innovation, thereby augmenting market growth in the country. For instance, in June 2020, Kodak announced that the Sapphire EVO W Press is available worldwide, and the first installation will occur later this year at a customer in the US. The Sapphire EVO W is the first flexible packaging press to enter the market using Kodak's latest continuous inkjet technology. The Uteco Sapphire EVO W press is the second product developed by the Uteco Group in partnership with Kodak for digital flexible packaging production.
• The proliferating e-commerce in the country is boosting the demand for flexible packaging. Its efficiencies, coupled with the comfort of comparison shopping, also influence down prices in several sectors. As business insider reports, e-commerce is driving retail growth virtually, and its influence on flexible packaging may develop in the region.​ The retail industry in the US is highly competitive due to established food retailers such as Walmart, Kroger, and Albertsons, thereby driving the growth of the country's market.
• Moreover, based out of the United States, Walmart is the largest global retailer and the largest of its kind in the world. Of the top 10 largest retail companies globally, five are based out of the United States, which makes the country the foremost in the retail industry.
• Also, the demand for flexible packaging products is generally driven by millennial customers in the country, as they have an ardent preference for single-serving and on-the-go style food and beverage foodstuffs. These products are generally designed to be portable, durable, and lightweight; flexible packaging stands to be a famous option to pack such products. The increasing demand for snack foods, both in terms of processed foods and fresh items, is expected to govern the demand for flexible packaging from the country's food and beverage industry.

Competitive Landscape

The North American flexible packaging market is fragmented and consists of several major players. The major players with a prominent share in the market are focusing on expanding their customer base across foreign countries.

• September 2020 - Amcor introduced the world's first recyclable flexible retort pouch. The technical breakthrough, which many considered impossible, follows years of dedicated research and investment.

Additional Benefits:

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

Companies Mentioned

IBM Corporation
Oracle Corporation
Internap Corporation
Packet Inc. (An Equinix Inc. Company)
Scaleway Inc.
Amazon Web Services Inc
Rackspace Inc.
CenturyLink, Inc.
LightEdge Solutions, Inc

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