Smart Packaging Market Size, Share & Trends Analysis Report By Type (Active Packaging, Intelligent Packaging, Modified Atmosphere Packaging), By Applications (Pharmaceuticals, Food and Beverages, Automotive, Electronic Goods, Logistics, Personal Care) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global smart packaging market size is valued at USD 33.19 billion in 2022. It is estimated to reach USD 52.82 billion by 2031, growing at a CAGR of 5.3% during the forecast period (2023–2031). The global smart packaging market is boosted by the rising expansion of the e-commerce industry worldwide because of the rapid proliferation of the Internet. Moreover, there has been a rapid expansion of sustainability in recent years, and the surging demand for sustainable packaging is, in turn, boosting the global smart packaging market.

The term "smart packaging" encompasses a range of packaging technologies and solutions that go beyond the capabilities and features of conventional packaging. Integrating technological components into packaging systems to create an informed connection between the product and the consumer or supply chain is known as "smart packaging." The purpose of these characteristics is to augment the practicality, ease of use, and worth of packaging for commercial enterprises and consumers alike.

Smart packaging can interact with consumers using augmented reality (AR), QR codes, or near-field communication (NFC) technology. Such packaging can deliver supplementary product information, recipes, or promotional content when detected with a smartphone. Smart packaging frequently uses cutting-edge materials, sensors, and digital technologies to deliver advantages, including enhanced product security, information transparency, user interaction, and supply chain management.

Market Dynamics

Global Smart Packaging Market Drivers

Growing E-commerce Industry

E-commerce has emerged as a vital component of worldwide retail in recent years. Like numerous other sectors, the purchasing and selling of products have experienced a significant paradigm shift since the inception of the Internet. With the proliferation of the Internet and its accelerated adoption on a global scale, where more than five billion individuals are connected, there is a consistent rise in the volume of online purchases.

According to Statista, global retail e-commerce sales were expected to surpass 5.7 trillion USD in 2022, which will continue to soar. In the coming years, this amount is anticipated to increase by 56%, culminating in approximately USD 8.1 trillion by 2026. Thus, the increasing inclination towards online purchasing stimulates the need for smart packaging, which provides logistical solutions like real-time tracking and guarantees effective transportation. Moreover, consumers' growing dependence on e-commerce platforms to access appealing promotions and discounts, convenient home delivery, and diverse payment alternatives fosters a favorable trajectory for the market, thereby fueling the global smart packaging market.

Growing Demand for Sustainable Packaging

In recent years, demand for sustainable packaging has increased owing to its negligible impact on the environment. Smart packaging can enhance sustainability. Smart technologies like RFID (Radio-Frequency Identification) or QR codes enhance supply chain efficiency and have the potential to reduce food and product waste through the provision of up-to-date data regarding the freshness, expiration life, and storage conditions of the product. This practice aids in the promotion of sustainability.

Many organizations worldwide are collaborating to promote the use of sustainable packaging. For instance, in September 2023, the World Packaging Organization (WPO) and the Active and Intelligent Packaging Organization (AIPIA) recently entered into an MoU to enhance their partnership in smart packaging and its underlying scientific principles. The World Packaging Organization (WPO) is expected to support the Active and Intelligent Packaging Organization (AIPIA) in material science technology, which holds substantial relevance in the domain of active packaging. AIPIA will support WPO's efforts to promote sustainable and suitable packaging innovation. This is expected to spur global market growth.

Global Smart Packaging Market Restraint

High Cost of Smart Packaging

Traditional packaging materials fail to integrate technological advancements such as sensors, identifiers, and the Internet of Things. Smart packaging implements cutting-edge systems, technologies, and devices, including RFIDs, sensors, and the Internet of Things, to enable real-time product monitoring, control, and tracking. They also employ cutting-edge packaging materials to preserve the original quality and freshness of products for an extended period of time. These materials or products are more expensive than conventional alternatives. The high price of smart packaging will, therefore, restrain the expansion of the market.

Global Smart Packaging Market Opportunities

Introduction of New Smart Packaging Solutions

Major players in the market are introducing new smart packaging solutions to strengthen their market share. For instance, in April 2022, Sealed Air introduced Prismiq, a comprehensive range of offerings encompassing design services, digital printing, and smart packaging, with a specific emphasis on enhancing the efficiency and effectiveness of the food supply chain. Prismiq is a centralized platform that provides brand owners with a readily accessible data set for their clients, enables them to connect and streamline all product information in a single location, and facilitates packaging design.

Similarly, in July 2020, Shiprocket, the largest e-commerce shipping and enablement platform for small and medium-sized enterprises (SMBs) in India, recently integrated smart packaging solutions onto its platform, demonstrating its dedication to providing premium shipping and fulfillment services to e-commerce enterprises of every scale. Shiprocket's objective with this introduction is to provide businesses with the means to enhance the overall end-user experience by guaranteeing access to superior packaging. Such product launches create opportunities for market growth.

Regional Analysis

North America Dominates the Global Market

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

North America is the most significant global smart packaging market shareholder and is expected to expand substantially during the forecast period. North America is seeing significant growth and expansion in its e-commerce industry, leading to its establishment as a prominent player in the global market. This sector necessitates effective packaging solutions that facilitate tracking, monitoring, and improving user experiences, thereby driving the smart packaging market. In addition, North America, and the United States in particular, is home to many technology sites and preeminent innovation centers. This provides a competitive advantage to the region by encouraging the development and innovation of cutting-edge technologies that can be incorporated into smart packaging.

For instance, in August 2023, researchers from Case Western Reserve University are at the forefront of an initiative to create a "smart packaging" system that will monitor pathogens, temperature fluctuations, and moisture changes in perishable food products while they are in transit. Their energy-efficient strategy may provide food producers with cost savings, distributors with a more cost-effective supply chain, and consumers with food of higher quality. Approximately one-third of all food cultivated for human consumption, or 1.3 billion kg, is wasted annually. Nevertheless, this novel approach holds the potential to substantially mitigate deterioration, optimize financial savings, and bolster food safety. This is expected to expedite the market expansion in the region.

In the European Union, consumer awareness of environmental issues and sustainability is growing, which is fueling the need for creative and ecologically friendly packaging solutions like smart packaging. Moreover, the presence of key market participants in the region introducing new packaging solutions is boosting market growth in the region. For instance, in October 2023, Appetite Creative, a digital technology laboratory, and Tetra Pak, a packaging company, jointly introduced interactive smart packaging for Rauch, a European fruit juice producer. The introduction of this smart packaging supports Rauch's winter beverage theme. The one-liter juice containers are now available in three distinct flavors: apple, pineapple, and orange.

Asia-Pacific region is expected to grow significantly in the global smart packaging market. The high proliferation of the Internet, along with the soaring adoption of smartphones in the region, is leading to the growth of the e-commerce sector. The main aspect that is propelling the market in the region is the flourishing e-commerce industry. For instance, China maintains its dominant position in worldwide e-commerce sales, as the International Trade Association reported. In 2022, online sales in China surpassed USD 3 trillion, representing over 50% of all retail sales worldwide.

Similarly, according to Statista, recent industry calculations indicate that between 2023 and 2027, India will lead twenty countries globally in developing retail e-commerce, expanding at a CAGR of 14.1%. Currently, the e-commerce market in India holds a valuation of 63.17 billion U.S. dollars. This factor is expected to boost the smart packaging market in the region.

Segmental Analysis

The global smart packaging market is segmented by type and application.

Based on type, the global smart packaging market is divided into active packaging, intelligent packaging, and modified atmosphere packaging. 

Modified atmosphere packaging (MAP) is the process of changing a package's internal atmosphere composition to extend its expiration date. In general, the modification procedure reduces the quantity of oxygen (O2) present in the container's headspace. Carbon dioxide (CO2) or nitrogen (N2), a relatively inert gas, may be utilized instead of oxygen. Passively or actively, a stable atmosphere of gases can be created within the packaging by employing techniques such as gas flushing and compensatory vacuuming or developing "breathable" films.

Active packaging is a kind of smart packaging that enhances the quality and safety of packaged goods while extending their shelf life through active materials and technologies. Conventional packaging functions primarily as a passive barrier, shielding the contents from potential harm caused by environmental elements, including moisture, oxygen, light, and physical damage. On the other hand, active packaging surpasses this fundamental purpose by interacting with the packaged product or the surrounding environment to preserve or improve the product's state. Food and pharmaceutical products, which are susceptible to environmental factors and necessitate an extended period of storage, can benefit significantly from the utilization of active packaging.

Based on application, the global smart packaging market is segmented into pharmaceuticals, food and beverages, automotive, electronic goods, logistics, and personal care. 

The food and beverages segment is expected to be the largest revenue contributor. Smart packaging refers to the incorporation of diverse technologies into the packaging of food and beverages to offer supplementary functionalities in addition to the conventional containment and protection functions. By monitoring parameters including temperature, humidity, and gas composition, intelligent labels equipped with sensors can reduce food waste and ensure that products are stored and transported under ideal conditions, thereby preventing spoilage. It is projected that the food and beverage sector will witness an expansion of smart packaging applications as manufacturers and consumers pursue novel approaches to enhance product quality, sustainability, and safety.

Smart packaging in the pharmaceutical industry pertains to incorporating sophisticated functionalities and technologies into the packaging of pharmaceutical products to augment their safety, efficacy, and user satisfaction. Smart packaging may comprise color-changing labels or indicators that deliver notifications before the expiration date of a prescribed medication. This reduces the likelihood that patients will ingest expired medications, which may have diminished effectiveness or safety.

Recent Developments

• September 2023: Jus de Fruits Caraïbes, a fruit juice company based in the French West Indies, formed a collaboration with Tetra Pak, an esteemed AIPIA member and a global leader in food processing and packaging, to develop an engaging and interactive connected packaging experience.
• In October 2023, Carlton Packaging introduced a novel'smart' pallet wrapping technology, WrapX, that incorporates smart features, aiming to enhance safety, convenience, and efficiency throughout its utilization.