World’s $1.17 trillion packaging market set for further growth: Smithers
20 December 2023: Flexible plastics and paperboard will be the fastest growing packaging materials – reflecting both challenges and opportunities as the industry targets greater sustainability – across the next five years, according to the latest in-depth analysis from Smithers.
Its new market report – The Future of Global Packaging to 2028 – shows total value in the sector will reach $1.17 trillion in 2023. Worldwide demand has recovered strongly from Covid-19 and subsequent economic disruptions having grown at 5.8% year-on-year across 2018-2021.
Despite macroeconomic uncertainty and rising input costs, Smithers expert modelling shows global sales value will increase at a compound annual growth rate (CAGR) of 3.9% to reach $1.42 trillion in 2028. Organic growth in developing regions will account for the majority of this increase, according to Smithers exclusive study of 50 individual national markets across the globe.
The market in Asia alone will increase by 5.3% year-on-year across 2023-2028. The fastest developing markets are Indonesia, the Philippines and India. They are followed closely by China, already largest single market on the planet, it will account for 25.3% of world packaging demand, by value, in 2028. India meanwhile is now the third largest national market, with packaging sales overtaking Germany for the first time in 2022. This is shadowed by similar, if smaller emerging potential in South & Central America, Africa and the Middle East.
Higher consumer spending power in these regions will help support increased sales of packaged food, healthcare, and cosmetics packaging. This will sustain increased sales of flexible plastic packaging formats, which offer distinct advantages in these markets, despite growing awareness of the difficulty of recovering these at end-of-life. A global CAGR of 5.1% will make flexible plastics the fastest growing packaging material across next five years, with global sales increasing from $197.7 billion in 2023 to $253.2 billion in 2028.
Paperboard (corrugated, folding cartons, and liquid paperboard) is still the largest material segment, accounting for 31.8% of world value ($373.8 billion) in 2023. The segment is set to grow at a 4.2% CAGR through to 2028. This reflects below average growth in transit segments, countered by surging demand in e-commerce, and new premium sustainable alternatives to plastics for consumer applications in developed regions.
This last trend is most advanced in Europe, which will soon see a reformed Packaging and Packaging Waste Regulation (PPWR) join its pioneering single-use plastics legislation. Many leading CPG brands have also committed to improving the sustainability of their packaging portfolios across the forecast period, with the first targets set for 2025.
There is also innovation in glass and metal packaging, but these both material markets will track beneath the global mean for the next five years, as buyers seek out lighter weight, less energy-intensive materials sets.
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