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

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

The paper packaging market registered a CAGR of 3.87% during the forecast period of 2021-2026. The packaging industry witnessed some major issues due to the COVID-19 pandemic, including the effects of the nationwide lockdown, companies moving to source away from China, and reconsidering materials used in packaging. Although the supply side of paper packaging has witnessed a significant impact, a drastic increase in the end-user demand in some applications has significantly expanded the scope of paper packaging.

Key Highlights

• Paper packaging is a versatile and cost-efficient method to protect, preserve, and transport a wide range of products. In addition, it can be customized to meet the customers' or product-specific needs. The attributes like lightweight, biodegradability, and recyclability are the advantages of paper packaging that make it an essential component for packaging.
• The increasing consumer consciousness regarding sustainable packaging and the strict regulations imposed by various environmental protection agencies (regarding the use of environment-friendly packaging products) are the factors driving the market for paper packaging. The rapid growth of online shopping and delivery-on-demand services has fueled the usage of cardboard and paper-based bags.
• Environment-friendly packaging solutions have become a norm rather than an exception for packaging companies worldwide. The profound change in corporate standards, governmental policies, trade regulations, and consumer tastes have led to a paradigm shift toward eco-friendly solutions in the packaging market. France has banned the use of plastic bags since July 2016. According to the French Government, about 5 billion plastic bags are distributed, and 12 billion are used to pack fruit and vegetables.
• The major challenge faced by the paper packaging market is the inability of paper to package very heavy materials, resulting in the industry being overpowered by the polymers and metal packaging industries. Furthermore, deforestation to acquire raw materials and release dioxins during paper production cause environmental concerns. These factors, in turn, are hindering the growth of the paper packaging market.
• The packaging industry witnessed some major issues due to the COVID-19 pandemic, including the effects of the nationwide lockdown, companies moving to source away from China, and reconsidering materials used in packaging. Although the supply side of paper packaging has witnessed a significant impact, a drastic increase in the end-user demand in some applications has significantly expanded the scope of paper packaging.
• Growth in food packaging and ever-increasing demand for corrugated packages in growing e-commerce shipments are some of the studied market's primary drivers that resulted from the COVID-19 outbreak. In e-commerce portals, demand has sharply increased for grocery packaging, healthcare products, and e-commerce shipments. At the same time, demand for industrial, luxury, and some B2B-transport packaging have declined.

Key Market TrendsFood and Beverage Expected to Hold Significant Market Share

• Paper packaging is the main asset of the food industry. It is environment-friendly and increases convenience for consumers. Due to this, there is significant competition in the food and beverage market among the players who provide quality products to consumers. Various packaging materials in the market are available to fulfill diverse packaging needs, like corrugated boxes and cardboard boxes.
• There is fierce competition among the quality-product providers in the food market. Due to these reasons, various manufacturers in the food market are continuously making and delivering high-quality products. There is an increase in the number of hypermarkets and supermarkets. This factor is expected to be one of the key factors driving the demand for paper and paperboard containers. This, in turn, is expected to drive the future growth of the packaging market.
• Many retail stores use packaging materials to preserve food and retain its nutritional value of foods. Due to the increase in the number of consumers purchasing grocery items (like includes frozen and chilled foods), the market is expected to witness growth in the future.
• Rising consumer demand for packaged products due to the shift in eating habits and evolving lifestyles may impact the market. A rise in per capita disposable income and a growing population shall aid in the product demand owing to high barrier properties, shelf life, and consumer safety. There is an increasing demand for natural and high‐quality foods that are minimally processed or unprocessed, do not contain preservatives, and offer a longer shelf-life.
• Packaged food is used for various purposes, such as barrier and contamination protection, convenience, and portion control. Sustainable packaging addresses food waste and loss reduction by safety issues by preventing food-borne diseases and chemical contamination and preserving food quality.

North America Expected To Have Significant Market Share

• North America continues to be one of the leading markets for paperboard packaging products, with a host of players operating in the country. The United States dominates the folding carton packaging market in the North American region, where food is expected to continue as the primary end-user of folding cartons. For instance, according to the Association for Packaging and Processing Technologies, the US food industry is expected to increase at a steady rate of 2.9% CAGR through 2022.
• In 2018, the Trump administration levied a tariff of 10% on folding cartons from China, which was scheduled to increase to 25% on January 2019. However, in December 2018, the United States and China agreed on the temporary suspension of any increase in tariffs. If tariffs continue to rise as planned, it is expected to increase domestic production and a more rapid transition to flexible packaging formats. This is expected to impact the market's growth over the forecast period positively.
• Furthermore, market participants are increasing their investments in advanced and customized packaging solutions through increased M&A activity or R&D strategies. Moreover, the market is seeing new players enter the scene. EdelmannUSA has recently joined the PPC. This reflects the company's increased focus on expanding in this market based in Europe.
• Growing consumer awareness of sustainable materials, raising awareness of global ecological issues, its cost-effectiveness and environmentally friendly nature, the recyclable capacity of paper, and others are key factors driving the market growth. Increased deforestation and replacing plastic packaging for food applications are major restraints for the paper packaging market.
• The rise in some hypermarkets & supermarkets and the rapidly growing retail sector lead to rising demand for paper packaging. Paper packaging not only helps retail stores to pack food but also protects and maintains nutritional values. Nowadays government is also implementing stringent rules and regulations to provide safe packaged products by using sustainable materials such as biodegradable products.
• Technological advancements in food applications, such as laminated and coated papers, will further prevent leakages and are estimated to increase the market growth. By Geography, the United States is estimated to have the largest market share during the forecast period owing to individuals' changing lifestyles and rising demand for flexible packaging in that region.

Competitive Landscape

The paper packaging market is fragmented. It is a highly competitive market with a number of players in the market. There is no dominant player present in the market. The companies keep on innovating and entering into strategic partnerships in order to retain their market share.

• August 2022 - Testronix Launches Next Generation Packaging Testing Instruments.Testronix is the leading testing instruments manufacturer in Asia and has recently launched high-end next-generation packaging testing instruments. Testronix is known for its quality and technology with high-end features in all its testing instruments. With a lot of research and development team, testronix and its highly skilled team of engineers have been able to develop the latest technology instruments to serve the paper and packaging industry.
• December 2021 - Iceland is planning to replace some of its plastic packaging with Mondi's functional barrier paper, which is recyclable in existing waste streams and has the same shelf life as its previous packaging. Iceland has set out ambitious sustainability targets and has already made great strides in reducing plastic packaging.

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