Retail Bags Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Retail Bags Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Retail Bags Market is expected to grow at a CAGR of 5.2% over the forecast period 2021 to 2026. The rapidly increasing number of shopping malls, supermarkets, and developed retail sectors has been significantly feeding the global demand for retail bags. Owing to grown retail industries linked with growing choice for eco-friendly packaging among customers, the retail bags market is increasing exponentially.

Key Highlights

• The growing regulation and bans across the plastic material usage in retail bags have incrementally pushed the paper material usage and is expected to proliferate the retail bag market in the forecast period. Also, increasing recycling and bio-based plastic usage would play a pivotal role in the plastic material segment in the retail bag market that would replace the use of virgin plastic.
• Moreover, with the increasing demand for packaging across the end-user industries, the packaging waste generated is also rising. According to the United States Environmental Protection Agency (EPA,) packaging contributes to almost 77.9 tons of municipal solid waste per year, almost 30% of the total amount of waste and packaging represents a staggering 65% of all household trash.​
• On the other hand, the Japanese government launched a proposal in 2018 to reduce plastic waste by 25 percent until 2030. Also, a mandatory fee for plastic shopping bags was levied by July 2020. Similar laws have already been implemented in 66% of countries globally.
• Supermarkets in developed nations are regarded as heavy plastic use areas, with consumers opting for single-use retail bags. A curb on these segments with respect to plastic carry bag use has been witnessed. Thus driving the market.
• However, the onset of coronavirus has set back the ban of single-use plastics. With early 2020 concerning about the risks of infection spread, the allied consumers of retail goods went back to throwaway packaging.
• Simultaneously, driven by consumer behavior, the bans on disposable items got delayed in the UK and US. For instance, California and Oregon lifted plastic bag bans, Maine delayed its own ban, and other multiple US cities and grocery chains banned reusable bags. These setbacks have caused an abrupt change of course after a years-long trend of governments banning or taxing the use of plastic bags. This has slightly given an edge for the development of paper-based retail bags.

Key Market TrendsPaper Material to Have a Dominant Share in the Market

• The growing preference towards environment-friendly packaging has led the retailers to shift focus towards paper-based bag packaging for general public consumers of today and the future as the consumers view paper to be the most environmentally friendly alternative to plastic. According to Industry experts' plastic takes approximately 100 to 500 years to decompose and causes pollution. Therefore, paper is considered of the best biodegradable materials for manufacturing retail bags.
• Moreover, according to the European consumer preferences survey commissioned by Two Sides in 2020, concluded that 62% of consumers see paper and cardboard packaging as better for the environment. Additionally, 70% of consumers surveyed said they were actively taking steps to reduce their use of plastic packaging.
• Furthermore, there are six different types of paper used to make retail paper bags such as kraft paper, white cardboard, offset paper, recycled or eco-friendly paper, and newsprint paper.
• Vendors across the globe are prioritizing recycled paper bags to curb deforestation issues in conventional paper production for retail bags. This recycled paper has a similar quality to conventional paper and can be used for making strong bags to contain various retail goods. Also, due to the increasing costs and consumption rates of wood-based paper, consumers are starting to look for alternatives to minimize the impact on the environment. As an alternative, the paper that is made from bamboo or sugarcane is being utilized.
• For instance, Stenqvist provides a carrier bag made from renewable raw material sugar cane and is reusable. In addition, the bags are made available in micron thickness and can be reused. Furthermore, the use of raw materials allows the company to set a smaller carbon footprint and allows them to consume 80% fewer fossil resources compared to virgin materials.
• Further, kraft paper bags are widely being used for groceries, and the material is made of softwood sulfate, which offers various colors such as yellowish-brown, white or cream, and thick light brown color. The bags have a high tensile force and weigh between 80 to 120 grams which are ideal for groceries and food takeaways. In addition, the bags are designed to offer different variations such as single, double light, no-rain, and stripes. Therefore exports of craft paper pulps have increased in Japan, according to the Japanese Ministry of Economy, Trade, and Industry. Thus driving the market.

Asia Pacific to Have a Significant Market Growth

• The Asia Pacific region is supposed to have meaningful growth due to the increasing number of production plants, combined with the growing customer base all over the region, contributing to the growth of the Retail Bags Market. For instance, According to the National Bureau of Statistics of China 2021, China had a total capacity of 7.23 million metric tonnes production of plastic materials, which is one of the most demanded materials for retail bags.
• The growth of the retail sector in the region is also encouraging the need for retail bags. For example, in countries like China, according to the National Bureau of Statistics of China, the retail business revenue of consumer goods in China amounted to around 3.2 trillion yuan in May 2020.
• Due to the growing need for paper pulp in countries like China and India, the Asia Pacific region is supposed to be the quickest developing region. There is an expansion in the transit packaging division in China, coupled with mounting consumerism heading to a swiftly building demand for retail paper bags.
• The coronavirus outbreak has resulted in an unprecedented impact on the consumer markets across the globe, owing to lockdowns in multiple countries and stay-at-home directives. This has also led to a serious disruption in the retail consumption in the region, with most malls and outlets in the region ceasing operations. For instance, according to the Chines government, the retail sales decreased by around 20.5% year on year during the first two months of 2020, and although there was a slight increase in March, the sales were still down around 15.8%, when retail operations gradually began to return to normal.
• As of Jan 2021, the retailers in Singapore that need the customers to pay for plastic bags witnessed a 60% reduction in their plastic bag usage. An industry commitment by the retailers who have joined the PACT (Plastic ACTion) Retail Bag Charge initiative that was led by the World Wide Fund for Nature (WWF) witnessed a significant reduction in their single-use bags, with more than 300,000 bags saved on a monthly basis. This was an important step taken by the industry to reduce the excessive usage of single-use plastics.

Competitive Landscape

The Retail Bags Market studied is highly fragmented, with a considerable number of regional and global players. The primary strategies adopted by these firms include expansions, product innovations, and mergers and acquisitions. The principal players dominating the global handbags market are Attwoods Packaging Company, Mondi Group PLC, El Dorado Packaging, Inc., SPP Poly Pack Pvt. Ltd., and the Carry Bag Company, among others. An advanced distribution network gives a competitive edge to the principal market players. Furthermore, players need to innovate continuously, to work and grow in the market due to the quickly evolving consumer needs and choices.

• March 2021- Coveris Holdings has announced the acquisition of Initial Packaging Ltd to develop and expand the production of bag packaging for security, logistics, and diagnosis applications. Further, with this acquisition, Coveris gains access to new markets & distribution channels and expands its product portfolio and manufacturing capability in this highly attractive area.
• July 2021- Novolex has announced it has acquired the business of Flexo Converters USA, Inc. and certain of its affiliates. The intention to purchase was initially announced on May 17. Flexo is a manufacturer of stock, custom and recycled paper bags, and sacks. With this acquisition, Flexo products will be sold under the Novolex Duro Bag brand. The addition of Flexo products to the Novolex portfolio will enable Duro to support customer demand through Flexo’s production capacity.

Additional Benefits:

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

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