Packaging Foams Market

Market Overview

The global packaging foams market had a revenue worth USD 16.37 billion in 2022. It is expected to reach USD 26.23 billion by 2031, growing at a CAGR of 5.4% during the forecast period (2022-2031). 

Foam packaging is the process of combining gas in solid and liquid form. Toys, electronics, and other products all use this foam packaging material extensively. Additionally, this product can be utilized for various packaging needs. Due to its usefulness in protecting items and low cost, foam packaging is increasingly in demand across various industries. Packaging foam is widely utilized as a standard cushioning material for boxes; this packaging solution is renowned for its adaptability and customizability. Foams are utilized in a wide range of packing applications where the best possible protection and durability are crucial. In the shipping and packaging sectors, packing foam comes in various forms, including polystyrene, polyurethane, polyolefins like polyethylene, cross-linked polyethylene, expanded polyethylene (EPE), expanded polypropylene (EPP), etc.

 Online shopping has become more prevalent due to growing digitization, which has increased the demand for packaging foams. Additionally, transportations frequently sustain damage from being dropped, kicked, etc., where packaging foam is critical in lowering these incidences. Industrial enterprises typically need packaging to safeguard their goods during distribution, raising the demand for flexible foam. Several million packages are shipped daily by organizations like Amazon, USPS, FedEx, and UPS. As a result, businesses are spending money on sustainable packagings, such as safe and recycled plastic packaging.

Market Dynamics

Market Drivers

The Increasing Demand from the Packaging Industry

Foam made of expanded polypropylene is environmentally friendly. It is entirely non-toxic and simple to recycle. Polypropylene recycling is becoming an effective and economically sound solution on a wide scale. Additionally, EPP foam's diverse range of characteristics, including its exceptional energy absorption, water and chemical resistance, hygienic nature, ease of handling, and recyclability, make it the ideal material for food packing. The demand for packaged foods has increased, which has led to considerable growth in the food packaging business globally.

 Due to their resilience and natural capacity to absorb energy during transit, EPP foams are also widely used to create reusable industrial packaging, also known as dunnage. There is a high need for containers, cold-chain transport boxes, and fast-food packaging in regions including North America, Asia-Pacific, and the Middle East. To create a fully recyclable option with a microwaveable low carbon footprint and keeps food hotter for longer, Infinity and London Bio Packaging, a trading division of Bunzl UK Ltd., are working on a revolutionary innovation in sustainable food-to-go EPP packaging.

 Beyond, the popularity of food delivery has increased by 39% in the previous three years. This is anticipated to result in an increase in demand for packaging soon. Because of the exponential growth of the packaging industry and the increasing awareness and use of green packaging, it is anticipated that the growth of e-commerce, the food packaging industry, and online business will favor the market for packaging foam in the years to come.

Market Restraints

Molded Pulp Used as Green Alternative

A notable rise in the use of molded fiber packaging has been attributed to the public's growing preference for environmentally friendly goods and the possible volatility of rising oil costs. Polystyrene foam, sometimes known as EPS, is used in various packing foams. Because it's constructed of petroleum-based polystyrene and a blowing agent for fuel like pentane or carbon dioxide, polystyrene foam endangers human health and the environment. However, because of its unique characteristics and massive scale, EPS can often be challenging to recycle and take up landfill space if recycling efforts are not sufficiently successful.

 Expanded polystyrene, or EPS, packaging has long been a well-liked option for securing goods throughout distribution. As nations become more urbanized, the demand for packaging is anticipated to increase exponentially, necessitating the development of an efficient recycling system. Uniform packing sizes would find a market as e-commerce grows. Customers will value lifestyle trends toward comfort, wellness, and environmental awareness more. The demand for EPS foams is anticipated to decline shortly due to the growing markets for alternative green substitutes.

Market Opportunities

The Increasing Requirement for Eco-Friendly Packaging Foam

An eco-friendly substitute for conventional packaging foams is becoming increasingly popular. Growing consumer demand for bio-based polypropylene foam (PPF) could indicate future expansion of the market under study. With a brand content above 50%, researchers could create bio-based plastic cushions with a high proportion of natural components. This suggests that the requirements for both bio-based and biodegradable polymers may be met. Many businesses are also concentrating on making bio-based PP, which might have a favorable effect on expanding the expanded polypropylene foam market throughout the forecast year.

 For example, Borealis AG and Neste collaborate strategically to generate renewable polypropylene (PP). In addition to conducting the first bio-PP industrialization demonstration test in the industry's history, Mitsui Chemicals planned to evaluate several aspects of technology, quality, economic efficiency, and environmental impact, including GHG reduction. After resolving these problems, Mitsui Chemicals Group has considered commercializing bio-PP; production is scheduled to begin in 2024.

Regional Analysis

The region-wise segmentation of the global foam packaging market includes North America, South America, Asia Pacific, Europe, and the Middle East & Africa.

 The Asia Pacific and North America will be dominating the regional market.

The Asia Pacific will be commanding the regional market while expanding at a CAGR of 5.87%. China is a prime revenue generator of the region. The market for packaging foam is anticipated to expand faster thanks to the expanding food and beverage, automotive, electronics, personal care, and pharmaceutical industries. One of the world's biggest food industries is found in China. Due to the rise of customized packaging in the food sector, including microwave food, snack foods, and frozen meals, as well as rising exports, the nation is anticipated to have steady growth during the projection period. It is anticipated that packaging foam usage will rise in the following years.

 Automotive aviation spare parts can be tricky to handle; some need additional care while being stored and transported. This is caused by the complexity of various components, especially those found within and in the engine. These control the ride, offer the car a new look, and even increase the effectiveness of the car's systems. This implies that the correct packaging of replacement parts during shipping and storage would be protected. So, it is advised to use specific automobile foam packaging materials.

 North America is estimated to have the second-largest shareholding of USD 3,994 million, growing at a CAGR of 3.87%. The United States covers the majority of the region’s share. Customers are increasingly ordering groceries and other food products online due to the widespread use of the internet and rising demand for convenience. A rising number of services, including Amazon Fresh, let customers buy fresh vegetables without leaving their homes. Additionally, wineries, food, and beverage processing facilities, and facilities for the slaughter and processing of animals make up the majority of food and beverage processing facilities in New York. This expands the market for packaging foam.

 In addition, Walmart, headquartered in the United States, is the biggest company of its sort worldwide and the largest retailer overall. Five of the world's top 10 largest retail corporations are headquartered in the United States, making it the leader in the sector. According to the Flexible Packaging Association of the United States, with a market share of approximately 20%, flexible packaging is the second-largest category in the nation. The nation's expanding food market is also stimulating the packaging industry there.

Segmental Analysis

The global packaging foams market is classified across material, structure, Application, and region.

 Per the material, the sections are Polystyrene, Polyurethane, Polyolefin, and Other Materials.

 Polyurethane is estimated to advance at a CAGR of 5.27% and holds the largest market share. Flexible polyurethane foams are frequently utilized in packaging. Open-cell polyurethane (PU) foams have a structure. Air flows freely between the PU foam's cells, making it exceptionally stress-absorbing. Polyurethane is a great vibration-dampening substance because of its sponge-like feel. PU also has a light sheen that varies in intensity according to the quality. Case inserts are typically used with it. Polyurethane foam avoids the shortcomings of vinyl films while combining the best aspects of plastic and rubber. As a result, it is easy to work with and resistant to brittleness. Additionally, it is simple to adapt to various requirements, and you can create custom foam forms.

 Polystyrene is expected to hold the second-largest share. Styrene is threaded together or polymerized to create polystyrene (PS) foam, often known as styrofoam, a flexible substance used in various consumer items. It is frequently used in goods that need to be clear, such as food packaging. Packaging for food service made of polystyrene is less expensive, more durable, and better at insulating. Widespread use of foam polystyrene in the creation of protective and light packaging. It is frequently used in various packaging types to avoid deterioration or damage in CDs, DVDs, and other electronic device cases.

 Per the structure, the sections are Flexible and Rigid.

 The flexible section will likely grow at a CAGR of 4.97%, holding the largest market share. Flexible foams are frequently used in the packaging industry and can be made from polyurethane, polyethylene, and other materials. Flexible foams are advantageous for packaging because they are soft, lightweight, water-resistant, and shock-resistant. Most of the time, these flexible foams are designed in different structures, like convoluted form and end caps foams, to name a few, or cut to meet the contour of the product. Flexible foam is a perfect material to package electrical components due to its anti-static qualities.

 The rigid section will have the second-largest share. Foams for rigid packaging are typically stiff and frequently used in industrial packaging. Rigid foams are inexpensive packaging materials that are moisture-resistant, thermally insulating, and structurally sound. Examples include expanded polystyrene and other rigid foams. Rigid packing foams can protect industrial goods like toys, electrical consumer goods, fragile medications, and electronic components. They are employed in transporting consumer appliances like refrigerators and washing machines, as well as packaging food and pharmaceuticals.

 Per the Application, the sections are Food Packaging and Industrial Packaging.

 The industrial packaging section is forecasted to hold the largest market share, proliferating at a CAGR of 4.5%. Transportation, Electrical & Electronics, Personal Care, Pharmaceutical, and Other Applications are the different sub-segments under this category. The transportation section covers the majority of the share. Automobile spare parts can be tricky, and some need to be handled with additional care when stored and transported. Although using specialist automotive foam packaging materials is advised, there is yet to be a definitive definition of good part handling. These unique foam pieces were created to protect automotive parts during storage and transportation. The demand for packaging foam increases due to the rising production of automotive vehicles and the rising need for high-strength components from various locations. This is due to an upsurge in need for high-quality component packaging.

 The food packaging section will hold the second-largest share. Due to their qualities, such as cushioning, thermal conductivity, low density, and sound absorption, foams are frequently used for food packaging. Additionally, foams are utilized in the shipping packing of goods, including delicate food items, fish, meat, and beverages. Food packaging typically involves compartmentalized foam containers and foam containers with rectangular or square-hinged lids. One of the most commonly utilized types of food packaging is styrofoam. For the packaging of food, they are typically utilized in retail establishments, supermarkets, restaurants, etc.

Recent Developments

• In 2022, Armacell introduced the ArmaGel HTL, a special non-combustible aerogel blanket designed for industrial applications where corrosion under insulation mitigation, thermal performance, and non-combustibility are critical requirements.