Flexible Packaging Market

Market Overview

The global flexible packaging market size was valued at USD 178.12 billion in 2022. It is estimated to reach USD 256.83 billion by 2031, growing at a CAGR of 4.15% during the forecast period (2023–2031).

Highlights

• Flexible plastic dominates the material segment
• Consumer packaging dominates the application segment
• Bags and sacks dominate the product segment
• Asia-Pacific is the highest shareholder in the global market

Flexible packaging is a procedure of packaging products with non-rigid materials, allowing for more cost-effective and customizable options. Its relatively novel packaging technique has gained popularity due to its high efficiency and low cost. Flexible packaging refers to any package or component whose shape can readily be altered during filling or use. Flexible packaging includes bags, containers, wraps, liners, roll stock, and other flexible products made from plastic, paper, film, aluminum foil, or any combination of these materials.

Flexible packaging utilizes less base material than conventional rigid packaging, and the simple formability of flexible materials reduces production time and energy consumption. Flexible packaging materials are also frequently created to be reusable and recyclable. Similarly, flexible packaging materials permit more inventive and noticeable packaging shapes. Flexible packaging benefits from food and beverage, personal care, and pharmaceutical industries.

Market Dynamics

Global Flexible Packaging Market Drivers

Demand for Lightweight Products 

A flexible refill pouch (1 L) can hold 5% more product than a plastic refill bottle (946 ml) with 55% lesser packaging material weight. A 70% reduction in weight can be achieved by using a flexible pouch rather than a glass jar. There is a constant demand for lightweight packaging materials from food, pharmaceutical, and other end-user industries to reduce the cost of transportation and the unit cost associated with packaging. Flexible packaging is one solution that has successfully replaced rigid packaging at many levels. Cost is one of the major factors for the increased demand for lightweight flexible packaging, fueling the market growth.

Increased Adoption of Flexible Packaging over Rigid Packaging 

The price of raw materials, the low cost of production, and the lightweight character of flexible packaging are significant market drivers. In addition, demand from purchasers and final consumers drives the transition to flexible packaging. In 2020, a greater number of packages with a reduced volume due to the introduction of smaller packs and single-serve packaging. The flexible packaging market also provides easy-to-use caps and closures, which were previously one of the reasons for delayed adoption rates. As they can be used to package food, pharmaceuticals, beverages, FMCG, and other products, flexible packaging has become the most popular.

Additionally, newer retort packages with increased protection from the external environment, combined with functionalities like zips and spouts, are surging the adoption of pouch packaging and, consequently, flexible packaging over rigid packaging. Therefore, more products previously packaged in rigid materials are now adopting flexible packaging.

Global Flexible Packaging Market Restraint

Recycling Challenges with Flexible Packaging Products

Recycling flexible pouches and other products is cumbersome and not economically viable, as separating these materials involves many processes. The multi-layer films used in packaging include paper, foil, and plastic. A combination of different polymers that would require investments in terms of machinery and technology is also possible. Unlike rigid plastic products, recycled flexible packaging products cannot be utilized for packaging food and pharmaceuticals as per FDA regulations. Such factors restrict market growth.

Global Flexible Packaging Market Opportunities

Profit Volatility in the Asia-Pacific Region

Revenue turnover margins have been on the higher side in the Asia-Pacific region. Revenue has been growing due to the increase in population, especially the population that has migrated to urban areas in the past five years. Consumer goods and pharmaceutical industries have been the major demand generators in the Asia-Pacific region. The incentives provided by the government and the lack of regulatory policy implementation systems in these emerging markets have also significantly contributed to revenue growth.

Additionally, the e-commerce market in China will play a significant role in bringing the margins to a range where they are profitable to many industry players. The e-commerce industry is increasing its profit margins to employ advanced technology at various points in the value chain. Flexible packaging accounts for more than 70% of the machinery required in the e-commerce industry. The e-commerce industry requires newer, more efficient technology to cater to customers quickly. This will create several opportunities for the market in the upcoming years.

Regional Analysis

Based on region, the global flexible packaging is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global flexible packaging market shareholder and is anticipated to exhibit a CAGR of 5.02% during the forecast period. This region is the most desirable market for flexible packaging manufacturers due to its high domestic demand and abundant, low-cost labor. Hence, market players focus on this region to gain a larger market share and high profitability. An increase in population, growing urbanization, and increasing food expenditure, particularly in China and India, are the key growth drivers of the market in Asia-Pacific. Furthermore, the increasing consumption of seafood products such as sushi, a staple food item in Japan, is expected to boost the market for flexible packaging during the forecast period. Expansions and investments, acquisitions, agreements, and introduction of new products are also some of the main strategies key players use in the market to strengthen their positions. The regional market for flexible packaging is predicted to be bolstered by factors such as a strengthening global economy, a growing labor force, and a rise in domestic demand for food and pharmaceutical products.

Europe is estimated to exhibit a CAGR of 4.24% over the forecast period. The flexible packaging market in Europe is expected to grow significantly during the forecast period because of faster economic growth and higher disposable income among consumers. Vendors with technologically advanced equipment have an edge in the market and can deliver aseptic, retort, anti-counterfeit, and child-resistant packaging. In addition, healthy growth in most end-user markets, like coffee, pet, and fresh food, has increased recently. Smaller households require more single-serve options, and consumer demand for a greater variety of products is rising. This supports the transition from rigid to flexible packaging, as flexible packaging offers greater convenience and is better suited to modern lifestyles.

In North America, the flexible packaging market is expected to grow moderately. In 2019, the YOY increase was slightly higher than in 2018 due to rising food consumption and growth of the retail sector. The US is expected to be the highest revenue generator in the region throughout the forecast period. The North American economy has performed well over the years, increasing per capita consumer spending. In addition, the flexible packaging market in North America is currently at a mature stage. Economic data points such as consumer spending, frequency of eating out, retail industry growth rate, and household income indicate that the performance of the market will be above average during the forecast period. The portability associated with pouches, a priority for the food and personal care sectors, is driving the expansion of the market in North America.

In Latin America, the flexible packaging market is estimated to expand over the forecast period due to the surging middle-class population and higher disposable income. After the outbreak of the COVID-19 pandemic, the consumption of flexible packaging has increased significantly in more mature markets of North America and Europe, owing to the increased demand for consumer products. The growth of the Latin American flexible packaging market has been accelerated by the simple availability of cheap labor and raw materials and by the region's convenient access to two of the world's largest consumer markets, the US and Canada.

In the Middle East and Africa, the flexible packaging market has immense potential as the per capita consumption is currently very low compared to Europe and North America. The flexible plastic packaging segment is expected to grow during the forecast period, driven by economic growth in Middle Eastern countries such as Turkey, the UAE, and Saudi Arabia. However, the growth could be impacted by the volatile economy of African countries and COVID-19. Logistics infrastructure is still lagging in African nations and could hamper the availability of packaged food, pharmaceuticals, and other non-food goods. The per capita consumption (particularly for flexible plastic) is still comparatively low in major cities of the Middle East and Africa as compared to Europe.

Segmental Analysis

The global flexible packaging market is segmented by material, application, consumer flexible packaging end-user, product, and printing.

Based on material, the global market is divided into flexible plastic, flexible paper, and foil. 

The flexible plastic segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 4.42% over the forecast period. Flexible plastic pouches consume 60% less plastic than rigid packaging with a higher product-to-package ratio. Therefore, they consume less energy during manufacturing with lower emissions. The food industry is the highest revenue generator, with the highest YOY growth rate. Concerning flat pouches, four-side-seal pouches are anticipated to witness a significant growth rate, driven by the meat, poultry, and seafood industries.

Flexible plastic materials/packaging are derived from non-renewable resources. Premium products and most food items are packaged in flexible plastic pouches that are fitted with closures of some form (spout or zipper). The segments are further bifurcated into PE, BOPP, CPP, BOPET, PA, PET, PVC, EVOH, etc.

Based on application, the global market is divided into consumer packaging and industrial packaging. 

The consumer packaging segment dominates the global market and is predicted to exhibit a CAGR of 4.21% over the forecast period. Although the demand for food products and essential items increased after the outbreak of COVID-19, the demand for flexible packaging decreased in restaurants and food service outlets due to government restrictions. Therefore, the demand for consumer flexible packaging is high in the healthcare, food and beverage, and pet food segments. Consumers stockpiled essential items during the lockdown. Thus, all consumer end-user segments witnessed a modest growth rate.

Due to global economic changes, cost pressure on the consumer flexible packaging market has increased. Market manufacturers are under immense pressure, consumers are becoming more price-sensitive, and packaging manufacturers are burdened to meet the market's demand.

Based on end-users, the global market is bifurcated into F&B, healthcare, personal care, pet food, and others. 

The F&B segment dominates the global market and is projected to exhibit a CAGR of 4.05% over the forecast period. The need to increase shelf life without adding any external chemicals or preservatives is one of the major factors driving the adoption of flexible packaging in the F&B industry. Significant increases in two-income households, migration from rural to urban areas, and the consequent creation of more nuclear families are pushing the demand for flexible packaging in the F&B industry. In addition, the growth of the food industry is predominantly because of higher food consumption and population growth. An increase in food consumption indicates economic growth in a region, leading to lifestyle changes and subsequent changes in packaging to cater to changing food consumption patterns.

Based on product, the global market is segmented into bags and sacks, pouches, and others. 

The bags and sacks segment is the largest revenue contributor to the market and is predicted to exhibit a CAGR of 2.97% over the forecast period. Flexible bags and sacks are used in various applications like healthcare, personal care, pet food, etc. The market has various bags, such as reclosable plastic and poly-woven bags. The industry is dominated by monolayer PE films that do not require sophisticated packaging equipment. The threat to the industry is also limited as the application areas require flexible packaging. Unlike other packaging formats, pricing pressure is not significant in this segment. The low-grade material can also be used with recycled packaging, as most of these bags do not come in contact with food as the primary product.

Based on printing, the global market is bifurcated into flexography and rotogravure. 

The flexography segment is the highest contributor to the market and is anticipated to exhibit a CAGR of 4.73% over the forecast period. Flexographic printing uses three types of inks – solvent-based, water-based, and ultraviolet-cured inks. For most flexible packaging substrates, solvent-based ink is widely used for adequate adhesion and wetting. Inks, adhesives, and machinery are the majorly sourced products by flexible packaging vendors. Flexographic printing is associated with low labor costs, low press footprint, and lesser energy requirements. Plate costs for gravure are over 70% higher than those for flexographic printing, which average around 50%.

Recent Developments

• May 2023- Huhtamaki unveiled a new sustainable, flexible packaging innovation that offers an unmatched combination of best-in-class protection, complete recyclability, and affordability.
• June 2023- CCL Industries Inc., a world leader in specialty label, security, and packaging solutions for multinational firms, government institutions, and small businesses and consumers, announced the acquisition of Pouch Partners s.r.l., Italy, from Pouch Partners AG, Switzerland, a subsidiary of Capri-Sun Group with its headquarters in Switzerland.