According to the latest market analysis from Smithers, flexible plastic, paper, and foil packaging will continue to see a steady rise in demand across the next five years, even as the industry simultaneously reacts to the supply chain disruption of Covid-19 and the ongoing demand for greater sustainability in pack designs.
The report, titled The Future of Global Flexible Packaging to 2026, shows worldwide consumption will reach a projected 31.5 million tonnes in 2021. This follows a -5.5 per cent drop in overall value in 2020, as several end-uses dropped demand in response to the global pandemic.
Industrial formats, which represents slightly over half of the market, have been affected more than consumer packaging applications.
Smithers forecasts that demand will return through 2021 as lockdown orders are lifted and international trade flows resume. Flexible packaging will benefit directly from this, with Smithers forecasting a CAGR of 3.4 per cent by volume, which will see total consumption reach 37.5 million tonnes in 2026.
Overall, the impact of a post-Covid recession will vary from country to country. Their duration will depend on the success of national virus control and vaccination programmes, as well as the effectiveness of government stimulus spending.
Food packaging has previously shown itself resilient in times of economic downturn, and this represents around 75 per cent of all flexible packaging demand, according to the report.
The report warns that luxury goods will be much more badly affected, but these make limited use of flexibles, while moves to control the virus will also support wider demand for medical devices and pharmaceuticals.
“The recovery has already begun, in China and elsewhere in Asia, and these regions represent the largest growth opportunities for flexible packaging suppliers through to 2026,” says Smithers.
Flexible plastics will remain the largest segment of the market and will see the fastest growth. These have come under scrutiny as governments and consumers show a greater interest in the environmental impact of packaging.
Flexible polymer constructions – especially multi-layer laminates – have been identified as among the hardest formats to recycle efficiently.
In response, material suppliers and converters are introducing more mono-material packs designed to be recovered in existing waste streams. This is driving R&D on delivering performance characteristics previously only possible with multilayer constructions, such as improving high-speed heat sealing, withstanding retort cooking, and home ovenable pouches.
In parallel, the industry is investigating how to use more recycled post-consumer resin in polymer packaging films, particularly, the wider use of feedstocks sourced from the first generation of chemical recycling processes.
In retail packaging, there is also more interest in flexible paper concepts, including new barrier concepts and designs. These are allowing brands to demonstrate their green credentials to customers.
While maintaining production and safety during Covid-19 was the top priority for 2020, sustainability has not disappeared from the medium-term agenda.
“Many FMCG companies are maintaining corporate citizenship commitments to improve the sustainability of their packaging by 2025 or 2030, and many state government recovery strategies are looking to match spending to projects that minimise environmental impact,” Smithers explains
“Elements of these have the potential to benefit flexible packaging, especially those focused on minimising food waste – where the ambient barrier performance of the latest flexibles can be a key tool to minimise spoilage of perishable foods in transit.”
The report quantifies the market (by value and volume) for 10 different flexible packaging materials across 2016-26. Market data is presented in unparalleled detail, segmented across 19 end-use applications, and over 20 regional and leading national markets.
Comprehensive forecasts or the post-Covid recovery are supported with critical analysis of how the virus’ impact and other economic, demographic and technical factors that will reshape the market over the next five years.
