Packaging Adhesives Market

Market Overview

The global packaging adhesives market size was valued at USD 17.45 billion in 2022. It is estimated to reach USD 28.10 billion by 2031, growing at a CAGR of 5.43% during the forecast period (2023–2031).

Highlights

• Water-based dominates the technology segment
• Flexible packaging dominates the application segment
• Asia-Pacific is the highest shareholder in the global market

Packaging adhesives refer to the adhering agents used to bind two or more sections of packaging materials together. Adhesive materials are used extensively for binding and finishing in packaging to make, seal, and label boxes, cartons, and other packaging materials. A wide variety of adhesives are available, with the specific variety for a given end-user being predominantly determined by cost, substrate nature, and end-user requirements.

Common packaging adhesive varieties include solvent-based, water-based, and hot-melt adhesives. For porous or non-porous substrates, like starch, dextrin, and polyvinyl alcohol (PVA), water-based adhesives are utilized, whereas solvent-based adhesives are utilized for plastic applications. Hot-melt adhesives, also known as hot glue, are thermoplastic-based adhesives that dissolve when heated. These adhesives are produced with natural and synthetic polymers, including polychloroprene, polyvinyl acetate, polyurethane, and polyvinyl pyrrolidone.

Market Dynamics

Global Packaging Adhesives Market Drivers

Growing Demand from the Food and Beverage Industry

The food and beverage sector is among the fastest-growing industries owing to the incorporation of advanced technologies in production and management. In addition, high consumer demand for food and beverage products results in mass production, likely fueling the industry's growth. However, many countries worldwide have restricted the use of lightweight single-use plastic bags or begun taxing them. Besides this, another focus of the packaging industry has been on developing convenient and lightweight packaging coupled with a significant withstanding temperature range, which propels the demand for flexible packaging, which creates considerable opportunities for advanced adhesive solutions.

Additionally, the popularity of E-commerce and E-delivery has been growing continuously in emerging countries over the last few years, further stimulating the demand for food packaging materials across the globe. Moreover, in developed countries, a higher rate of internet penetration and growing demand for safe and quality consumer goods are considerably increasing online shopping for groceries and other food products. Further, the advancement of technologies coupled with better advertising and marketing strategies by packaged food producers will impetus the growth of the food and beverage industry, positively influencing the demand for adhesives in packaging applications.

Increasing Demand from the Cosmetic and Personal Care Industry

The consumer trend toward self-care and increased disposable money drive significant growth in the cosmetic and personal care industries. Pharmacies and department store's health and beauty sections carry most of these items. The appealing packaging of popular products like shampoo, gels, deodorants, and other cosmetics helps consumers identify them. Additionally, the fact that these products can be purchased online has increased the demand for packaging solutions. Therefore, the increase in packaging demand increases the demand for packaging adhesives.

In addition, according to the Personal Care Association of Europe, skincare products held the largest part of the European cosmetics market in key nations like Germany, France, the U.K., Spain, and Italy in 2020, with a valuation of USD 23.74 billion. Consequently, expanding the personal care and cosmetics industry is propelling the market for packaging adhesives.

Global Packaging Adhesives Market Restraint

Strict Government Regulations 

Discharging volatile organic compounds (VOCs) is a matter of concern. Due to this, the regulations related to VOC emissions have increased, which creates severe environmental concerns regarding adhesives. The adhesives used in the packaging applications can be very harmful as these possess toxic chemical ingredients used during the preparation. In addition, several governments and organizations have recognized the harmful chemical substances in the packaging adhesives and banned or advised the maximum amount limit during the manufacturing and using these adhesives.

For instance, OSHA has defined PEL for more than 100 solvents, and the National Institute for Occupational Safety and Health (NIOSH) has even strictly recommended PELs for more than 35 of those solvents, including turpentine, benzene, toluene, xylene, perchloroethylene, trichloroethylene, and methyl ethyl ketone (MEK). Constant push from regulatory authorities, such as EPA (environmental protection agency) and REACH (registration, evaluation, authorization, and restriction of chemicals), is likely to limit the use of solvent-borne adhesives to reduce their harmful impacts on the environment. Such factors restrict the market growth.

Global Packaging Adhesives Market Opportunities

Increasing Awareness of Food Safety

Consumer awareness of food quality and safety is one of the key growth factors for the market. The increase in social communication and campaigns on food standards and safety by many government and non-government organizations will foster the growth of the food packaging industry. The rising demand for healthier food products is a key factor in recent times benefiting the food and beverage industry. In addition, changes in eating, food preparation habits, and re-creating the restaurants' experiences at home are promoting the demand for restaurant-branded food products and packaged meal kits which gradually fuels the adhesive industry.

Furthermore, the rising safety challenges in food and beverage packaging will likely fuel the market growth during the forecast period. This has also resulted in adhesives manufacturers focusing on innovation to keep pace with consumer demand and provide the widest range of quality and high-performance products. Hence, increasing awareness of food safety creates diverse opportunities for a wide range of adhesives for various packaging applications. Striving for continuous development of better products for the industry is likely a major driving force for the market over the forecast period.

Regional Analysis

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

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global packaging adhesives market shareholder and is anticipated to exhibit a CAGR of 5.84% during the forecast period. Due to the significant demand from nations like China, Japan, India, and others, Asia-Pacific now holds the largest market share for packaging adhesives. China leads the world in the consumption of packaging adhesives due to its burgeoning e-commerce giants and rising per capita wealth. According to the National Bureau of Statistics of China, the total retail sales revenue of consumer products was CNY 39,198.07 billion (or USD 5532.31 billion) in 2020 and climbed to CNY 44,082.34 billion (or USD 6221.66 billion) in 2021. In addition, adhesives used in consumer products packaging and transportation saw increased demand due to increased retail sales revenue. One of the largest food industries in the world is located in China. The country is predicted to have steady growth during the projection period due to the rise in customized packaging in the food sector, including microwave, snack, and frozen meals, along with rising exports. Therefore, packaging adhesive usage is anticipated to rise in the next years.

Europe is estimated to exhibit a CAGR of 5.18% over the forecast period. In Europe, Germany holds the largest healthcare market. The annual expenditure on health in the country is estimated to be more than EUR 375 billion, excluding fitness and wellness. The healthcare and life-science industry is a priority for the country. The government has been focusing on R&D and innovation for many years, which is expected to boost the country's pharmaceutical sector and further fuel the global market over the forecast period. In addition, high-quality medical device production has a long history in Germany, emphasizing optical technology, precision dental equipment, and diagnostic imaging. The nation hosts the third-largest medical devices market in the world. The logistics used in the exports of this equipment will also provide a huge demand for packaging adhesives in the country, boosting regional market growth.

North America is expected to grow significantly over the forecast period. The United States is one of the fastest-growing packaging markets in North America. The presence of large packaging companies has been driving investments in innovation and R&D activities in the country. Major trends for packaging on the consumption end incline toward the demographics and rise in demand for convenience packaging, fueling the market expansion. In terms of exporting agricultural and agri-food goods, Canada ranks fifth globally. Over the last decade, agriculture and agri-food exports grew by 103%. Canada is also among the top countries exporting food and beverage products. These industries are driving the demand for the packaging adhesives market in the country.

In addition, Mexico is an attractive destination for online re-commerce merchants such as Mercado Libre and Amazon, which are e widely used in Mexico. Mercado Libre was estimated to be the most visited e-commerce site in 2020, with 128 million visits per month, followed by Amazon, with 64 million visits per month. Therefore, increasing penetration of e-commerce companies in the region will likely boost online shopping in the country, posing a positive growth trajectory for the packaging adhesives market.

The Latin American market is growing owing to the presence of key countries Brazil and Argentina. Brazil witnesses demand for packaging adhesives owing to the vast demand for processed foods. The exports and domestic demand for processed foods have been on a continuous rise, with the food processing industry in the country witnessing growth driven by the gradual recovery from the severe economic crisis. Furthermore, the increasing demand for processed foods will increase the demand for packaging materials and hence, the demand for packaging adhesives in the coming years. The market for non-perishable food and ready meals is growing significantly in the country, contributing to the food packaging market. Domestic consumption increased, and retail sales are expected to grow sharply in the coming years. Additionally, the growing FMCG sector has boosted the production levels of daily need products, which is creating a demand for flexible packaging. This factor is driving the growth of the country's market.

Segmental Analysis

The global packaging adhesives market is segmented by technology and application.

Based on technology, the global market is bifurcated into water-based, solvent-based, and hot melt. 

The water-based segment dominates the global market and is projected to exhibit a CAGR of 5.70% over the forecast period. Water-based packaging adhesives can be used in various situations and offer superior bonding to fulfill demanding requirements in numerous end-user markets. Boxes and cartons use water-based adhesives. In addition, water, polymers, and additives are combined to create water-based packaging adhesives. For porous or non-porous substrates, they are perfect. These adhesives can be created as solutions, and they become active as the water evaporates or the substrate absorbs it. Although some types, like plant and casein glues, are made with a base material that is insoluble at room temperature, water-based adhesives' polymers make the bonds between surfaces more susceptible to moisture and water. Furthermore, water-based solution adhesives are still perishable and have a lower shelf life, even if this has increased their resilience to the effects of water and moisture.

Hot-melt adhesives are thermoplastic polymer-based compositions that are 100% solids. When heated over their softening point, they transform from solid to liquid and can be treated. They are inactive at room temperature. Up until they solidify, the hot-melt adhesives might still moisten the substrate. They revert to a physical state with structural integrity and the ability to act as an adhesive upon solidification. Extruding, rolling, or spraying the hot-melt adhesives is used to apply them, and joining is done immediately or after reheating the hardened layer. Based on viscosity, hot-melt adhesives can be categorized into low-viscosity hot-melt adhesives and high-viscosity hot-melt adhesives. In addition, hot-melt adhesives are in high demand for labeling mineral water bottles, carbonated beverages, juices, oil, and sauces for their multiple benefits. NANPAO RESINS CHEMICAL GROUP, Intercol BV, PARAMELT, and many others manufacture hot-melt adhesives.

Based on application, the global market is segmented into flexible packaging, folding boxes and cartons, sealing, labels and tapes, and others. 

The flexible packaging segment owns the highest market share and is estimated to exhibit a CAGR of 5.80% during the forecast period. Flexible packaging is expanding at an impressive rate as consumer preferences transition toward more aesthetically pleasing packaging, usability, sustainability, and environmental consciousness. Using a single component may not satisfy all desired product properties in numerous flexible packaging applications. In these instances, a composite composed of two or more layers of material can provide the intended performance. In addition, laminating polymeric films to other films, foils, papers, etc., with a polymeric adhesive is a common technique for producing such composites. Laminating adhesives for flexible packaging are available in various technologies, viscosities, and solids concentrations. With the growing population in countries such as the United States, China, and India, the requirement for food is increasing, thus, resulting in increased demand for flexible packaging worldwide.

In general, adhesives for labels (including pressure-sensitive) are flexible, viscous, and tacky to the touch. These adhesives are applied to a surface, in this case, a label material (paper, vinyl, polypropylene, etc.), which will then stick to the surface upon application of pressure, causing the label to adhere to its intended container. The three most basic, general categories of label adhesives are Permanent adhesive, Removable/reusable adhesive, and Freezer grade adhesive. Furthermore, the rising demand for labeling is expected to spur the market growth of the application segment over the forecast period. Labeling adhesives applications ensure reliable bonding properties on various surfaces for different machines. This is expected to boost market growth throughout the forecast period.

Recent Developments

• October 2022- Henkel and LyondellBasell collaborated to create a hotmelt adhesive for resealing food-containing APET and polyolefin containers.
• December 2022- Dow's solvent-free and water-borne packaging adhesives are anticipated to contribute an adhesive component to its REVOLOOP technology platform after receiving approval for mechanical recycling from RecyClass.