Summary

The paper packaging market registered a CAGR of 3.87% during the forecast period of 2021-2026. The packaging industry witnessed some major issues due to the COVID-19 pandemic, including the effects of nationwide lockdown, companies moving to source away from China, and reconsidering materials used in packaging. Although the supply side of the paper packaging has witnessed significant impact, a drastic increase in the end-user demand in some applications has significantly expanded the scope of the paper packaging.

Key Highlights
Paper packaging is a versatile and cost-efficient method to protect, preserve, and transport a wide range of products. In addition, it can be customized to meet the customers' needs or product-specific needs. The attributes, like lightweight, biodegradability, and recyclability, are the advantages of paper packaging that make it an essential component for packaging.
The increasing consumer consciousness regarding sustainable packaging, as well as the strict regulations imposed by various environmental protection agencies (regarding the use of environment-friendly packaging products) are the factors driving the market for paper packaging. The rapid growth of online shopping and delivery-on-demand services has fueled the usage of cardboard and paper-based bags.
Environment-friendly packaging solutions have become a norm rather than an exception for the packaging companies worldwide. The profound change in corporate standards, governmental policies, trade regulations, and consumer tastes have led to a paradigm shift toward eco-friendly solutions in the packaging market. France has banned the use of plastic bags since July 2016. According to the French Government, about 5 billion plastic bags are distributed at and 12 billion are used to pack fruit and vegetables.
The major challenges faced by the paper packaging market is the inability of paper in the packaging of very heavy materials, resulting in the industry being overpowered by the polymers and metal packaging industries. Furthermore, deforestation to acquire raw material and the release of dioxins during paper production cause environmental concerns. These factors, in turn, are hindering the growth of the paper packaging market.
The packaging industry witnessed some major issues due to the COVID-19 pandemic, including the effects of nationwide lockdown, companies moving to source away from China, and reconsidering materials used in packaging. Although the supply side of the paper packaging has witnessed significant impact, a drastic increase in the end-user demand in some applications has significantly expanded the scope of the paper packaging.
Growth in food packaging and ever-increasing demand corrugated packages in growing e-commerce shipments are some of the primary drivers of the studied market that resulted due to the COVID-19 outbreak. In e-commerce portals, demand has sharply increased for packaging for groceries, healthcare products, and e-commerce shipments. At the same time, demand for industrial, luxury, and some B2B-transport packaging have declined.


Key Market Trends

Food and Beverage Expected to Hold Significant Market Share


Paper packaging is the main asset of the food industry. It is environment-friendly and increases the convenience for consumers. Due to this, there is significant competition in the food and beverage market among the players who provide quality products to the consumers. Various packaging materials in the market are available to fulfill the diverse packaging needs, like corrugated boxes and cardboard boxes.
There is fierce competition among the quality-product providers in the food market. Due to these reasons, various manufacturers in the food market are continuously making and delivering high-quality products. There is an increase in the number of hypermarkets and supermarkets. This factor is expected to be one of the key factors driving the demand for paper and paperboard containers. This, in turn, is expected to drive the growth of the packaging market in the future.
Many retail stores use packaging materials to preserve food and to retain the nutritional value of foods. Due to the increase in the number of consumers purchasing grocery items (like includes frozen and chilled foods), the market is expected to witness growth in the future.
The regional food and beverage sector in the Middle East region is acting as a significant driver for the adoption of paper packaging. According to Alpen Capital, local food consumption is expected to reach 51.9 million metric ton in 2019.


North America Expected To Have Significant Market Share


North America continues to be one of the leading markets for paperboard packaging products with a host of players operating in the country. In 2018 alone, the paper and paperboard consumption in North America reached 74.21 million metric ton. This is according to data released by FAO and UNECE.
The United States dominates the folding carton packaging market in the North American region, where food is expected to continue as the primary end user of folding cartons. For instance, according to the Association for Packaging and Processing Technologies, the US food industry is expected to proliferate at a steady rate of 2.9% CAGR through 2022.
In 2018, the Trump administration levied a tariff of 10% on folding cartons from China, which was scheduled to increase to 25% on January 2019. However, in December 2018, the United States and China agreed on the temporary suspension of any increase in tariffs. If tariffs continue to rise as planned, it is expected to result in the increase in domestic production, along with a more rapid transition to flexible packaging formats. This is expected to have a positive impact on the market’s growth over the forecast period.
Furthermore, players in the market are increasingly investing in advanced and customized packaging solutions, through increased M&A activities or R&D strategies. Moreover, the market is also witnessing new players entering the landscape. EdelmannUSA recently became a member of the PPC. This is indicative of the increased focus of the Europe-based company to expand in this market.
For instance, in November 2018, WestRock Company completed the acquisition of KapStone Paper and Packaging Corporation. The acquisition of KapStone enhances the company’s differentiated portfolio of paper and packaging solutions, such as folding cartons and paperboard, and is likely to enable them to serve customers better across.


Competitive Landscape

The paper packaging market is fragmented. It is a highly competitive market with a number of players in the market. There is no dominant player present in the market. The companies keep on innovating and entering into strategic partnerships in order to retain their market share.


Sept 2020 -The packaging and paper manufacturer, Mondi Group, announced a partnership with the organic farm, BIOhof Kirchweidach. This partnership would involve developing a sustainable packaging solution for fresh produce on the vine. Known as Coral Tray, the new packaging is in line with BIOhof’saims to replace its packaging with a recyclable and plastic-free solution. The fully recyclable packaging is made of renewable materials and recycled corrugated boards, with an average recycling rate of more than 80% in Europe.


Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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