One of the key areas in which print companies are experiencing success, even in this hyper-digitalized age, is packaging. Simply put, this market has largely been immune from the digital revolution because it is a necessity for technology manufacturers.
Rampant consumerism is at an all-time high throughout the world, which means that more products are being purchased, packed, wrapped and shipped than ever before. This has lead to a spike in the usage of packaging materials – most of which are composed of paper.
Food, beverage and consumer packaging lead the way
Ernst & Young released an industry report in 2013 which found that the global packaging market was worth $400 billion. The study also showed that this monstrous figure is likely to be sustained well into the future.
The top four market categories within the packaging industry were food at 51 percent, consumer at 20 percent, beverage at 18 percent and health care at 6 percent, EY reported. Each of those commodities, with the possible exception of "consumer," is a necessity, and it does not appear that humans will develop any sort of substitute for food, beverages or health care products any time soon. As long as these products are being purchased and distributed in large numbers, they will require packaging to accompany them. As for the consumer market – well, that does not appear to be declining in size, either, indicating that this sector will continue to thrive and use packaging, as well.
Perhaps the most important part of the study, in terms of the paper industry, was the type of packaging that was most commonly used. EY found that the single largest category was paper and board, at 34 percent, a number that shows the continued use and longevity of pulp-based products. The second-most commonly used substance was rigid plastic, which came in at 27 percent, while other forms of plastic and glass materials accounted for the remaining 39 percent.
Packaging market is sustainable – in more ways than one
Not only is the financial future of the packaging industry sustainable – its constituents are also participating in eco-friendly initiatives. PulpWorks reported on a Smithers Pira study, which found that by 2018, the sustainable packaging market is expected to be worth $244 billion, or more than half of the total market value in 2013. PulpWorks noted that the study details the transition to sustainability programs worldwide. These strategies are proving to be sources of innovation, based on new technological developments that cater to the environmentally-conscious mind of the contemporary consumer.
PulpWorks asserted that, according to the research, paper packaging makes up the largest segment of the recycled material movement. The source also said that Asia is the primary driver of the sustainable market, as there is a high demand for eco-friendly packaging in China and India, two up-and-coming economic powerhouses. In 2018, Smithers Pira expects Asia to account for 32 percent of the sustainable packaging industry, the single largest segment.
Improving economic climate is generating increased revenue within packaging industry
Capstone Partners wrong link reported findings from Q4 2014 within the packaging market, and noted that the recently improved economic conditions are contributing in part to a rise in industry investments. The source pointed out that as the market has stabilized, more acquisitions have occurred than in previous years, indicating health and strength for the major industry players.
In 2014 a total of 121 transactions took place, an increase of 25 percent over 2013's figure. Capstone Partners noted a trend of acquisitions involving solutions providers and supplies distributors. This development reflects the widespread movement throughout the industry toward providing comprehensive packaging solutions to clients, according to the source, as integrated product and service providers begin to emerge as factors in the market.
The study did find that transactions involving plastic packaging were slightly more numerous than those concerning paper, with a marginal edge of 46 percent to 41 percent. Still, these two materials proved to be the predominant products in the market, with all of the other contenders – such as glass and metal – paling in comparison. Manufacturers have continued to favor paper products for their packaging needs deep into the 21st century, and it does not appear as though this preference will change any time soon.
While digital products have hindered the growth of various aspects of the print industry, particularly concerning the media, the packaging market is actually benefiting from the constant technological developments that the tech industry is distributing. Paper packaging is as strong as ever, and appears poised to expand in the coming years as consumerism grows at unprecedented rates throughout the world. A global economy means more products are purchased and shipped each day than ever before, and this inevitably leads to higher levels of investment in the packaging industry.