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According to The Future of Packaging: Long-Term Strategic Forecasts to 2028 the global packaging market was worth $906.59 billion in 2018. In regional terms, Asia currently dominates the global packaging market, accounting for 42.5% of value sales in 2018. The region has also been the most dynamic of late, due to a rapid expansion in demand for packaged goods among the steadily growing urban populations of countries such as China and India.
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Consumer behaviour continues to influence the packaging industry to a significant degree. Smithers Pira’s exclusive study strategically examines the key factors at every stage of the supply chain that will impact packaging selection and use across the next decade.
For brand owners and retailer four key factors are identified that will play a crucial role across 2018-2028:
Growth rates within the global online retailing market remain impressive. This is due to factors, such as higher internet and mobile penetration among consumers; improved logistics and infrastructure to service their needs; and the continued spread of operators, like Alibaba and Amazon.
Global e-commerce trade was worth an estimated $2.3 trillion in 2017, up by 24.9% compared with the previous year. By 2021, global market value is forecast to experience further growth of more than 71%, reaching $4.88 trillion. By this time, the e-commerce sector is expected to account for 17.5% of global retail sales, a figure which compares with 10.2% in 2017 and less than 9% in 2016.
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Growth in online grocery purchases is expected to come from corporate developments, such as the ongoing expansion of groceries offered by Amazon. The company now operates AmazonFresh, a grocery delivery service extended in 2017 with AmazonFresh Pickup, whereby delivery services are offered at specified drive-up locations after groceries have been purchased online.
The growing penetration of e-commerce has numerous implications for the packaging industry:
The pace of globalisation has quickened over the last few decades and the worldwide presence and recognition of many leading brands and companies has expanded. Consumers across the world are becoming increasingly similar, as trends and ideas have become more global in nature.
Packaging is expected to remain at the forefront of brand identity as global markets develop further. Thus there is a need for brand consistency in graphics, formats and overall customer experience across world regions.
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Design considerations such as sustainability are becoming more global in nature, owing to the ongoing spread of the Internet and social media – environmental performance is therefore becoming a key component of packaging strategy for global brand owners throughout much of the world.
More brands are now positioning packaging sustainability alongside other attributes designed to appeal to ethically minded consumers. One example is Unilever’s Love Beauty & Planet range, which was launched in the US at the end of 2017 and debuted in the UK the following summer. These shampoos and soaps are marketed as vegan-friendly and aim to have all ingredients sustainably sourced by 2020, while all packaging is recyclable and features 100% post-consumer recycled plastic.
Packaging also has an increasingly significant role to play in the marketing of brands positioned to appeal to more ethically minded consumers, which are appearing in greater numbers throughout the global fast-moving consumer goods (FMCG industry). This trend is becoming especially apparent among younger age groups such as millennials.
Convenience for consumers and end-users is an increasingly significant influencer on brand owner packaging choice.
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The tendency of more people to consume products such as food and beverages on the go as part of their increasingly busy lifestyles is likely to accelerate this trend, driving demand for primary packaging incorporating features such as spouts and zippers, as well as products which are easy to open, close and reseal. Convenience is also becoming a key advantage as far as secondary packaging is concerned.
Looking ahead, the desire for enhanced convenience is expected to benefit flexible packaging formats such as stand-up pouches, since these are the most suited to portability and are less likely to suffer damage or breakages than glass bottles.
The number of people regularly using social media websites across the world shows no media indication of slowing. There were almost 3.2 billion active social media users at the beginning of 2018 – this has increased significantly from just over 2 billion three years previously.
Social media is therefore expected to assume a more significant role within the packaging industry over the coming years, as the penetration of Internet-enabled mobile devices continues. The unboxing phenomena, where video bloggers (vloggers) post films of themselves opening a pack, places packaging at the centre of potential customer experience of a product or brand.
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Platforms like Facebook and Instagram will take greater prominence for packaging as they are integrated into multi-channel marketing, as brand owners and retailers are inclined to communicate with end-users using a broader range of media. As part of their multi-channel strategy, many brand owners are seeking conversion to sales from engagement wherever possible, which favours the adoption of QR codes, RIFD and NFC technologies. This means social media will become an increasingly popular option for brand owners and packaging companies to communicate with their customers and vice versa, not least because it can be very effective in gaining a better understanding of what consumers are seeking.
Buying direct from a social media feed is becoming more common in parts of the world such as WeChat in China, a factor which may hasten the development of packaging within direct-to-consumer stratagems.
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