Market Challenges: Volatility in raw material prices

One of the key challenges faced by the global fresh food packaging market is the volatility in raw material prices. As fresh food packaging extensively relies on plastics as a raw material for packaging products such as plastic bags, trays, wraps, etc., fluctuations in global oil and petrochemical prices have a significant impact on plastic raw material costs. In the recent past, rising crude oil prices have increased the prices of plastic resins and polymers. This has increased production costs for fresh food packaging manufacturers. Passing on the entire cost increase to customers is also not feasible and affects profit margins. Unpredictable commodity price swings make it challenging to establish stable pricing for packaging products. The coronavirus pandemic has further exacerbated fluctuations in raw material costs. Fresh food packaging companies need to closely monitor raw material price movements and effectively manage procurement to minimize risks arising out of supply chain disruptions. Adopting efficient material selection and rigorous cost control measures are important to sustain profitability during volatile market conditions.

Market Opportunities: Growing markets in developing economies

One of the key opportunities for the global fresh food packaging market is the rapidly growing markets in developing economies. With rising disposable incomes and growth in spending power, fresh food consumption is increasing steadily in developing Asian, Latin American, Middle Eastern, and African markets. However, in many developing nations, a large portion of the agricultural produce is still distributed without proper packaging. This leaves significant room for growth of organized retail and utilization of protective fresh food packaging. Introduction of innovative yet affordable packaging solutions tailored to the requirements of local producers and consumers can help drive wider adoption. The development of cold chain infrastructure will further aid market expansion. Foreign and local fresh food packaging manufacturers need to focus on these emerging markets by establishing distribution networks and customizing products as per regional demands. Strategically tapping rising demand can ensure profitable long-term returns.