Global protective packaging market is estimated to witness high growth owing to rising e-commerce sales & increasing foreign trade
The Global Protective Packaging Market is estimated to be valued at USD 36.88 billion in 2024 and with a CAGR of 5.2% over the forecast period 2024-2031. The growth of the market can be attributed to the rising demand from various end-use industries such as electronics, automotive, pharmaceutical, and food and beverages. Furthermore, increasing e-commerce sales and foreign trade activities are augmenting market growth.
Rising E-commerce Sales
Expansion of e-commerce industry globally is one of the major drivers for protective packaging market growth. Significant rise in online shopping has increased the demand for secure packaging solutions to prevent merchandise damages during transit. According to statistics, global B2C e-commerce sales grew by more than 24% in 2020 reaching $4.2 trillion.
Increasing Foreign Trade
Growth in international trade activities between countries also drives the need for protective solutions. Packaging plays a crucial role in ensuring safety of imported and exported goods across borders. World trade volume is forecast to increase by 4.7% in 2022 providing opportunities for protective packaging manufacturers and suppliers.
Growing E-commerce Sales is Driving Demand for Protective Packaging
The growth of e-commerce has significantly increased demand for protective packaging over the past few years. As more consumers shift their shopping online, goods need to be securely packaged to prevent damage during transportation. E-commerce sales grew by more than 15% in 2020 alone. This increased demand has led protective packaging manufacturers to invest more in materials like paper cushions, air pillows, and expanded polystyrene that help absorb impacts and keep products undamaged. Companies shipping goods online require innovative, high-performance packaging solutions to provide buyers with positive unboxing experiences. The continued rise of online retail is a major driver propelling growth in the global protective packaging market.
Increasing International Trade is Boosting the Need for Protective Solutions
With globalization and expansion of international trade, demand for protective packaging has also risen as products are transported further across countries and continents. Goods need to withstand longer transit times, varying environmental and climatic conditions. Manufacturers have to develop packaging that protects products from factors like vibration, temperature changes, moisture etc. during overseas shipments. As companies increasingly source raw materials and components globally, there is growing emphasis on utilizing packaging formats that can withstand the rigors of international logistics. Integration of emerging economies in global supply chains has boosted international trade volumes significantly - another key driver fueling demand within the protective packaging industry.
Volatility in Raw Material Prices Pose a Challenge
Fluctuating prices of raw materials used for producing protective packaging solutions like paper, plastic resins and foams can negatively impact profit margins for manufacturers. The costs of these input commodities tend to vary considerably based on supply-demand forces and global economic scenarios. When raw material costs increase, packaging companies find it difficult to transfer the entire burden to customers. This eats into margins. Availability of cost-effective substitutes also influences the price variations of inputs. Dependence on imports for certain materials exposes packaging producers to volatile currency exchange rates as well. Unpredictable swings in commodity rates pose a major restraint over stable growth for players in the protective packaging market.
Concerns Over Plastic Waste Accumulation
Increasing awareness about environmental sustainability has prompted scrutiny over usage of plastics. While plastics are commonly employed in protective packaging due to their lightweight and durability properties, improper disposal of single-use plastic packaging has led to rising quantities of non-biodegradable waste clogging landfills and polluting oceans. This poses threats to wildlife and ecological balance. Intense focus on eliminating plastics has spurred development of alternate materials like molded pulp, bamboo, wheat straw etc. which have lower environmental footprint but comparable performance. Stricter regulations being enacted to ban certain varieties of plastics also act as a restraint over plastic-based protective solution providers.
Growing Demand for Sustainable Products
With sustainability emerging as a dominant business priority, manufacturers across industries are under pressure to embrace environment-friendly practices. Companies are actively pursuing sustainable and eco-friendly packaging formats to demonstrate their green credentials. Biodegradable options made using agricultural waste, compostable films derived from corn and other renewable sources are finding more traction. Consumers also demonstrate preference for brands that utilize recyclable, recycled content packaging. This growing interest in sustainability presents lucrative opportunities for protective packaging providers to offer innovative solutions minimizing resource consumption and carbon impact without compromising on functionality. Those aligning product development with circular economy principles will gain competitive advantage.
Demand for Customized Solutions Creates New Prospects
Rather than relying on standardized product lines, more companies now expect specialized packaging tailored to their individual needs. As logistics processes become complex with multi-dimensional inventory streams, protective solutions requiring minimal operations but high performance are in demand. Packaging manufacturers enhancing design expertise, supplying programmable formatting equipment and demonstrating agility in low-volume prototyping stand to win new business. Emerging applications across industries ranging from pharmaceuticals to aerospace also open up novel opportunities for suppliers to engineer specialized packaging formats ensuring safety of customized components. The scope for innovation and customized approaches presents bright prospects ahead.
Link: https://www.coherentmarketinsights.com/market-insight/protective-packaging-market-3493
Key Developments
- In 2023, Electrolux Group introduced new sustainable packaging solutions.
- In 2022, Pregis unveiled a carbon-neutral film designed for protective packaging.
- In 2021, Altor Solutions, Inc., backed by Compass Diversified and known for its high-quality packaging products, announced the acquisition of Plymouth Foam, a designer and manufacturer of foam packaging and shipping products. This acquisition aims to enhance Altor Solutions' position as a leading provider of packaging and component solutions by expanding its geographic reach.
- In 2021, Tekni-Plex, a global leader in the healthcare and consumer products sectors, acquired Keyes Packaging Group, a prominent provider of protective molded fiber packaging and tissue wrap. This acquisition enables Tekni-Plex to expand its portfolio of trays and flats, thereby enhancing its offerings to customers in the food and beverage industry.
Key Players
Sealed Air Corporation, Sonoco Products Company, Smurfit Kappa Group Plc., WestRock Company, Huhtamaki OYJ, DS Smith Plc, Pregis LLC, Pro-Pac Packaging Limited, Dow Chemical Company, Intertape Polymer Group (IPG), Storopack Hans Reichenecker Gmbh, International Paper Company, EcoEnclose, Point Five Packaging, Universal Protective Packaging, Inc., Durapak Paper Void Filling System, Supreme Indstries, Signode India, Rathana Packaging, and Protective Packaging India
