The retail market is a key driver of demand with 55% of flexible packaging papers being used in the packaging of various products for retail sale. Macro-economic influences such as household consumption expenditure, and demographic factors like population ageing and growth, as well as urbanization, have a significant effect on retail trends, and in turn influence flexible packaging paper consumption and growth.
The Future of Flexible Packaging Papers Market Forecasts to 2017 gives a historical overview of the industry as well as key drivers and trends impacting the market. It includes in depth material market forecasts for various papers and end-use forecasts for retail foods and other applications. Geographic markets span the Americas, EMEA, and the Asia-Pacific regions. With hundreds of tables detailing consumption and demand by sector, this market report is essential industry intelligence for strategic positioning.
The increasing demand for packaged foods, driven by the development of retail infrastructure in the emerging economies, is eroding the traditional markets for many products sold in loose or semi-packed formats. Industrial markets such as agricultural products and building materials are seeing an increasing utilization of bulk storage, transportation and distribution methods, which is stifling some of the growth in demand for paper-based flexible packaging in these sectors.
Value adding for converters is stimulated by a growing requirement for improved graphics in both retail and industrial applications, while the appeal of paper as an environmentally responsible material increases its popularity amongst brand owners and retailers. Competition from other materials, especially flexible plastics, continues unabated, though rising oil prices work in favor of paper-based packaging.
The bakery industry is undergoing a change that is dampening growth in paper consumption, such as the trend towards home baking, driven by the recession and health awareness, together with the growing popularity of partially-baked products for home finishing that are packed in plastic barrier materials. This is offset somewhat by the continued survival of small artisanal bakeries in the developing regions, in spite of the advance of supermarkets in these countries.
Likewise, traditional outlets such as street vendors and open markets are sustaining demand for flexible packaging papers in the snack foods market, though these will ultimately succumb to the supermarket. In the packaging of dairy products, rigid plastics are making inroads into traditional paper applications, though high-end products and private label brands tend to favor paper-based materials.
The pharmaceutical and medical markets will see a marked growth in consumption of flexible papers, driven by the growth in sales of pharmaceutical products through non-traditional outlets such as garage forecourts and highway service areas. This is coupled with fairly high growth in demand for medical products, brought on by both the development of the health systems in the emerging economies, and a trend to single-use items in an effort to reduce infections and cross-contamination.
The largest market for these materials, dry groceries, encompasses many staple foods and these will attract more demand for paper packaging as they shift away from traditional markets to supermarkets in the developing countries. Offsetting this slightly is a trend in the developed regions for some of these products to be packed in barrier films such as BOPP.
The bulk of demand originates in the Asia-Pacific region, with countries of Europe, the Middle East and Africa (EMEA) accounting for a third of the total and the Americas just under a quarter. Segmenting this demand by major country shows the highest consumption is in China, India and the US, which together account for 40% of the market.
New developments such as the launch of dissolvable, edible food packaging targeting the dry groceries sector could have a detrimental effect on paper consumption. The major driver of growth in flexible packaging paper consumption over the medium term will be the continued high growth being experienced in the various emerging economies, in spite of the adverse effects of the global recession.
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