Market Trends of Secondary Packaging Industry
The Folding Cartons Segment is Expected to Hold a Significant Market Share
- Folding carton demand has been increasing across many industries, including food and beverage, healthcare, personal care, homecare, retail, and others, as the focus shifts to eco-friendly and sustainable practices. The need for folding cartons is driven by consumer awareness of sustainable packaging preferences, availability of raw materials, the lightweight, biodegradable, and recyclable nature of paper, and deforestation.
- Rapidly growing tourism in different countries has led to the high consumption of processed food, carbonated beverages, and ready-to-eat foods. The food service industry's requirement for secondary packaging has been reshaped, fueling the demand for folding cartons that are approved by the FDA (Food and Drug Administration). The availability of versatile and eye-catching food folding cartons boosts product demand.
- Various companies are investing in mergers and acquisitions as an expansion strategy to boost their market share. In September 2023, Graphic Packaging, a US packaging company, announced the acquisition of Bell Inc., a US folding carton company. The acquisition included Bell's three converting facilities in the United States, which is likely to grow Graphic's presence in the food service packaging market.
- Various companies are manufacturing personalized and innovative folding cartons to package different beauty products, including cosmetics, skincare, and haircare, boosting the demand. Companies are also aiming toward sustainable packaging by using eco-friendly materials to make folding cartons.
- According to the Forest and Agriculture Association of the United States, in 2023, the production capacity of paper and paperboard was approximately 258,631 thousand tons globally. The production of paper and paperboard has been stable over the past decade with respect to the growing demand in various end-user industries. Such factors are expected to create an opportunity for the players in the market to develop new products to capture market share.
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North America is Expected to Hold a Significant Market Share
- The North American market for secondary packaging is being driven by the increasing usage of environment-friendly materials in secondary packaging. End users, such as the food and beverage, pharmaceutical, and cosmetic industries, are becoming increasingly aware of the need to utilize environment-friendly packaging materials to cater to growing sustainability demand. Folding cartons made from recyclable and biodegradable materials like paperboard promote sustainability, propelling market growth.
- Increasing customer spending and growing online shopping sales influence the expansion of e-commerce. According to the US Census Bureau, e-commerce sales accounted for 15.6% of all US retail sales in the first quarter of 2024, higher than the first quarter of 2023, propelling the market growth.
- The rapidly booming pharmaceutical industry in North America and the growing advancements in developing a variety of new drugs are driving the demand for secondary packaging. In May 2024, Sharp Services, a United States-based contract packaging company, announced the expansion of its Pennsylvania manufacturing site to increase its production capacity for sterile injectables secondary packaging.
- The secondary packaging for beverages serves different purposes. The secondary packaging is used to protect heavy bottles from breaking, and it reduces costs by shipping multiple items together. It may sometimes be used as a barrier or protection against sunlight exposure or other external challenges. The secondary packaging for beverages helps in product marketing and enhances product visibility, thus driving market growth.
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