Modified Atmosphere Packaging Market

Market Overview

The global modified atmosphere packaging market size was valued at USD 13.5 billion in 2021. It is estimated to reach an expected value of USD 22 billion by 2030, registering a CAGR of 6.4% during the forecast period (2022–2030).

The term modified atmosphere packaging refers to a type of packaging that involves replacing the air surrounding the product with a single gas or a gas mixture. The method normally aids in preserving the product's freshness until it reaches the consumer. This packaging aids in the preservation of the product's nutritional value, as well as its visual and textural integrity.

One of the primary factors driving the growth of the modified atmosphere packaging MARKET is the rise in demand for fresh and high-quality packaged foods worldwide. The on-the-go lifestyle is propelling the growth of the food packaging technology and equipment sector, and the increase in the shift toward easy-to-carry and convenient packaging fuels the expansion of the market.

Market Dynamics

Global Modified Atmosphere Packaging Market Drivers

Rising Demand for Longer Shelf Life

The food products being packaged in a protective atmosphere tend to spoil much slower than a normal product. Combined with continuous cooling of these products, modified atmosphere packaging technology can significantly extend the freshness and shelf-life of the food products. However, this prolonged shelf life varies depending on the product type, but doubling the life is usually possible. Modified atmosphere packaging products maintain product quality over an extended period to ensure that the product arrives at the consumer in the best possible condition.

In the past months, consumers have been stocking up on shelf-stable goods owing to the impact of the COVID-19 outbreak. Technological advancements in packaging materials and production processes have led packaging designers to produce packaging structures and methods that are hermetic, strong, and with a high barrier while favoring recyclability. With people struggling with food security and economic hardships, modified atmosphere packaging offers the best way to package food conveniently. Trends such as eliminating trays for packaged foods are also expected to become mainstream.

Other macroeconomic factors, like increasing food wastage, propel the demand for modified atmosphere packaging. For instance, the industry trade group, Produce Marketing Association, estimates that approximately USD 5 billion of fresh fruits and vegetables succumbed to waste in the United States alone. Hence, such factors contribute to market growth.

Growing Demand for Ready-to-Eat Food Items in the Developing Economies

Young consumers spend most of their income on convenient ready-to-eat food products. Most of the population in emerging economies, such as India, comprises adults, which indicates the increase in demand for convenient food products. These young consumers are the primary targets for the ready-to-eat food manufacturing players. Owing to the convenience these products provide, an increase in the demand for these products is anticipated.

The past year's ready-to-eat food products were among the few industries witnessing a significant surge in demand during the coronavirus pandemic. With countries on lockdown and a considerable population working from home, ready-to-cook food products have been flying off the shelves over the last few months. For instance, India-based online grocery store Grofers reported a sale surge of around 170% in the ready-to-eat category, 31% in the readymade meals and mixes category, and 41% in the frozen food category, primarily indicating the consumer shift from home-cooked food to ready-to-eat products. It is also anticipated that this change in consumer behavior will likely drive the market studied significantly in the coming years, as compared to before.

Global Modified Atmosphere Packaging Market Restraint

High Investment Costs for modified atmosphere packaging Equipment

The modified atmosphere packaging process involves comparatively higher requirements. This is primarily attributed to costs associated with possible failures such as incorrect gas composition, leaks due to faulty temperature, pressure distribution, contaminated or worn tools, seal contamination, or defective material. All these lead to the maintenance of equipment becoming of prime importance. The process also has some limitations for wide commercial usage owing to the higher cost of gas packaging machinery and the possible growth of food-borne pathogens, which can be due to temperature abuse. Also, the advantages of modified atmosphere packaging are lost once the pack is opened or leaked.

Furthermore, each food type has unique requirements to optimize its shelf life, with some requiring to be isolated from the external environment, whereas the rest requires internal gas composition regulation. The packaging materials must be carefully chosen to meet these requirements. Alternatively, high-quality packaging films, gas consumption, and personnel costs for quality control are the cost of modified atmosphere packaging. Such factors hindered the market growth.

Global Modified Atmosphere Packaging Market Opportunities

Emerging Applications in the Form of Utilities

New applications have also sprung up for modified atmosphere packaging in the form of modern utilities, including Coffee roasters and even Cannabis packaging. The coffee roasters have started to utilize modified atmosphere packaging in the form of one-way valves that allow for the release of carbon dioxide from the coffee bag without letting any ambient environmental gases or contaminants in.

Now that legal cannabis products are available commercially in certain US states and nationwide in Canada, cannabis companies must ensure that their products stay fresh for longer to create a premium consumer experience. Modified atmosphere packaging technologies prevent oxygen formation in such packaging, which helps the yield to remain fresh. As a result, top players in the industry have been investing in automated cannabis packaging systems that feature modified atmosphere packaging technologies, like nitrogen gas flush, to extend the products' shelf life. Such investments fuel the segment's growth.

Regional Analysis

Supremacy of Asia-Pacific Over Others

By region, the global modified atmosphere packaging market includes North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-Pacific accounts for the largest market share and is estimated to grow at a CAGR of 7.4% during the forecast period. The increasing demand for convenience and ready-to-eat food items in the emerging economies in Asian countries is driving this market. Modified atmosphere packaging experts can initiate the best way of preserving such multi-component foods. For example, the reduced oxygen level coupled with higher carbon dioxide and nitrogen can add five or six days to the shelf life of many types of sandwiches. Furthermore, Southeast Asia's rising incomes, growing population, and increasing urbanization have contributed to the growth in livestock production and meat consumption, particularly in poultry and pork.

Every Southeast Asian country has a different meat preference, as reflected by their consumption and production levels. However, all the countries are expected to increase their consumption and production of pork and poultry over the next decade. The USDA ERS stated that Southeast Asia's poultry production expanded by 56% in the last decade, which grew from 5.9 million metric tons (MMT) to 9.2 MMT in 2018 and is expected to reach 12.3 MMT by 2028. Such an increasing trend in poultry production would significantly demand modified atmosphere packaging for the extended shelf life.

Europe is estimated to generate USD 22 billion by 2030, registering a CAGR of 5.7% during the forecast period. In Europe, modified atmospheric conditions are common trends in the packaging and storing of all kinds of food products, from fresh to frozen. Due to the considerable microbial growth caused by the increased moisture and nutrient content, poultry, fish, and meat products, especially raw fish and meat, are vulnerable to spoiling. Deterioration occurs during and after killing beef, pork, or poultry. Hygiene standards, long-lasting cooling, and modified atmospheres can help extend the shelf life of meat and poultry products. The EU is the world's second-biggest pork producer after China and the biggest exporter of pork and pork products. The EU's central producer countries are Germany, Spain, and France, representing half of the EU's total production. The EU exports about 13% of its total production. With such a production trend, the demand for modified atmosphere packaging increases in European countries.

North America accounts for a significant share of the global modified atmosphere packaging market. This is attributed to the rising demand for processed food packaging, perishable food, and fresh food. Modified atmosphere packaging increases the product's shelf life to provide convenience to the customer and adds worth to the product. The United States has a significant amount of food wastage due to improper packaging and wastage along the supply chain, resulting in the adoption of modified atmosphere packaging for fresh vegetables and fruits in the country. According to the USDA, 30–40% of food is wasted in the United States every year. Good temperature management coupled with modified atmosphere packaging can tackle this wastage. Furthermore, good post-harvest handling, cold chain management, and correct modified atmosphere packaging design can open a window of opportunities for the country.

Segmental Analysis

The global modified atmosphere packaging market is segmented by packaging gas, packaging material, application, and region.

On the Basis of Packaging Gas

By packaging gas, the global modified atmosphere packaging market includes Oxygen, Nitrogen, Carbon Dioxide, and Others.

The Carbon Dioxide segment accounts for the largest market share and is estimated to grow at a CAGR of 6.5% during the forecast period. Carbon dioxide is a colorless, odorless, and tasteless gas with an oxidation-inhibiting and growth-inhibiting effect on most aerobic bacteria and molds. The shelf life of packaged or stored food is usually longer if CO2 content is higher. The use of CO2 in modified atmosphere packaging solutions is also gaining rapid traction, as it helps to make the packaging easy to test for discrepancies like leaks. Launched in November 2020, Leak-Master Pro 2 from WITT can find micro-leaks in modified atmosphere packaging packages. The leak test with the Leak-Master Pro 2 is carried out with CO2 as the tracer gas. Such properties drive segment growth.

On the Basis of Packaging Material

By packaging material, the global modified atmosphere packaging market includes Polyvinylchloride (PVC), Polyethylene (PE), Polypropylene (PP), and Others.

The Polyethylene (PE) segment accounts for the largest market share and is estimated to grow at a CAGR of 6.7% during the forecast period. Among the types of PE, LDPE is expected to command a dominant market share and is the most commonly used packaging film. LDPE seals at lower and over a wider temperature range. LDPE is an excellent barrier to water vapor but a poor barrier to oxygen, carbon dioxide, and many odor and flavor compounds. A significant focus is expected to be on offering recyclable packaging solutions owing to governments worldwide banning single-use plastics, thus pushing vendors to provide and focus on recyclable solutions. For instance, in June 2020, the United Kingdom-based absorbent food packaging specialist, Sirane, launched a range of mono-material recyclable pouches and films called RePEat, which can be recycled where LDPE recycling streams are available.

On the Basis of Application

By application, the global modified atmosphere packaging market includes Fruits & Vegetables, Poultry, Seafood & Meat Products, Bakery & Confectionery, and Others (Diary, Coffee Roaster, Cannabis, Transportation & Logistics, Others).

The Fruits & Vegetables segment accounts for the largest market share and is estimated to grow at a CAGR of 5.5% during the forecast period. The respiration of fruits and vegetables is a critical factor that makes up for the significant changes. When fruits and vegetables breathe, they consume oxygen and emit water, carbon dioxide, and heat, which leads to the decomposition of carbohydrates and several other substances that have an essential impact on the freshness, taste, and health quality of fruits and vegetables. They release ethylene, one of the main factors behind killing fruits and vegetables during storage and retail shelf-life. To improve the storage capacity of fruits and vegetables and control ethylene, modified atmosphere packaging is being significantly utilized.

Recent Developments

• August 2022 - Amcor (NYSE: AMCR) (ASX: AMC), a global leader in developing and producing responsible packaging solutions, announced that it had closed the acquisition of a world-class flexible packaging plant in the Czech Republic.
• July 2022 - Amcor was recognized twice for its advancements in environmentally friendly packaging. Amcor was honorably designated a 2022 Sustainability Leader in the Australian Financial Review's (AFR) annual list and received a silver award from the Australasian Packaging Innovation and Design Awards (PIDA) in 2022.