The way consumers view and interact with packages is altering. Owing to the rising focus on sustainability, consumers are preferring easily recyclable carton packaging over plastic or tin packaging. The growing market demand for customer-friendly packages and heightened product protection is expected to boost paper packaging as a viable and cost-effective solution throughout Europe.
- According to Pro Carton European Consumer Packaging Perceptions Study 2018, 52% of all Europeans believe carton board/cardboard is the most environment friendly packaging followed by glass packaging. According to the same report, 52% of European consumers have switched brands because of the environmental concerns due to the type of material being used in the packaging of products.
- The exponential growth of e-commerce, combined with the technological advancements in the packaging material options, is primarily changing the way most of the companies are choosing the right solution. The main points are the performance, cost considerations driven by material improvements, packaging needs, delivery systems that create on-demand packaging, and sustainability.
- Premium brands have always used luxury packaging for their products, but there are other innovative solutions from companies, like Charapak in the UK, which include reversible and returnable packaging. With reversible packaging, the inside of the box features a gift-wrap like print pattern, while the outside is a normal carton. Because of this, the demand for customized cartons has been high from this segment.
- The impact of the outbreak of Covid-19 on the market is expected to be significant in the short-run as the global lockdown has disrupted the entire packaging supply chain. However, plants of companies like Mondi PLC, DS Smith PLC continue to operate to deliver essential items like food, beverage, hygiene, and healthcare products to the people. Also, in the long-run, with businesses becoming normal and e-commerce trends on the rise, the market is expected to rebound back.
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Key Market Trends
Increasing E-Commerce Sales will Drive the Market Demand
- There has seen an unprecedented surge in the number of online shoppers in recent years. A large number of users have resulted in e-commerce companies having to deal with huge surges during peak shopping festivals. Due to which, e-commerce firms have been highly reliant on paper packaging. The World Retail Congress reported that the peak season uplift in countries, like Ireland, was 634%.
- Amazon is the biggest player in the e-commerce industry, and it had more than 119 million products listed on its website, as of April 2019. Moreover, the company mentioned that it sells over 4,000 products every minute. The company also boasted an impressive 2.5 million sellers on its website in 2019.
- With a large number of products on their website, e-commerce companies have been highly dependent on corrugated boxes, as they allow them to have any desired shape, along with fixed standard sizes. The companies also use extra internal protection within the box for more fragile and premium products.
- The mobile market is the refreshed category of consumer electronics that have the highest penetration, and with continuous development by the technologies, the mobile market growth is multiplying. Also, in response to this growth, e-commerce companies are partnering for their launches and distribution, resulting in the growing demand for the e-commerce packaging market.
Western Europe to Hold Significant Market Share
- The countries in Western Europe holds the key market share in the region, due to the existence of established industries, like the pharmaceutical, food and beverage, etc. Germany is the largest market in the region, owing to its dominance in the packaging industry. However, Eastern Europe is anticipated to witness a higher growth rate, due to the growing adoption of these packaging techniques across numerous industries.
- Europe is the second-largest packaging market globally, and many industry experts also reported that the people in the region are willing to spend more on items if they have had some role in customizing them. And in countries like the UK, with one in five willing to pay an additional 20% for personalization privileges. The growing trend of customized packaging will also drive market growth.
- The growing adoption of carton packaging in the region, due to expanding e-commerce industry, is also driving the paper packaging demand in the European region. In October 2020, Paper manufacturer Arjowiggins (France) announced new paper packaging for the food sector to replace plastic and films. Sylvicta is an FSC and PEFC certified recyclable, compostable, and marine biodegradable paper packaging material.
- In February 2020, Leading manufacturers of paper and fiber-based food and foodservice packaging met in Munich to announce the European Paper Packaging Alliance (EPPA), co-founded by Seda International and Huhtamaki. EPPA aims to find concrete solutions to increase recycling and to reduce carbon emissions of food and foodservice packaging without compromising food safety and human health protection. EPPA would also work with European policymakers to support these common priorities.
- A company such as AR Packaging strengthened its position in healthcare packaging by acquiring Kroha GmbH in October 2020. Kroha GmbH is a family-owned company manufacturing folding cartons and leaflets at its factories in Miesbach and Barleben, Germany. This strategic move further strengthens the company’s position and capabilities to service both mid-sized and large customers in the pharmaceutical industry.
Competitive Landscape
The Paper Packaging Market in Europe appears to be fragmented due to the presence of a large number of vendors. This industry research report offers information about the competitive environment among players in this market space. Major players include DS Smith PLC, Mondi Group, Hamburger Containerboard GmbH, among others.
- April 2020 - Smurfit Kappa launched a new Bag-in-Box filling solution for organic birch sap drink thus offering a perfect packaging solution for the drink that keeps it fresh for up to 24 months before opening and 8 weeks after opening.
- March 2020 - WestRock showcased its dynamic right-sizing solutions BoxSizer and Box On Demand Compack Midi. These can right-size multiple pre-loaded box footprints arriving at random to the infeed, reducing costs around labor, maximize shipping yield, and improve customer satisfaction.
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