Beverage Cartons Market Size, Share & COVID-19 Impact Analysis, By Type (Refrigerated Carton, Shelf-Stable Carton), By Application (Fruit & Vegetable Juices, Dairy Products, and Others), and Regional Forecast, 2021-2028

The global beverage cartons market size was USD 16.51 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with these products witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a huge decline of 5.0% in 2020. The market is projected to grow from USD 16.77 billion in 2021 to USD 22.44 billion in 2028 at a CAGR of 4.2% during the 2021-2028 period. The sudden decline in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Beverage cartons are a widely adopted form of packaging that protects juices and drinks, enabling their distribution and storage at ambient temperatures or under refrigerated conditions. These cartons preserve the freshness, flavor, and nutritional qualities of beverages. Moreover, their easy-to-carry design helps in supporting the trend for on-the-go products to fulfill the millennial generation's fast-paced lifestyle.

A conventional beverage carton is manufactured using around 75% wood fiber in paper or paperboard, 21% HDPE and a small layer of aluminum. All these three materials are recyclable, making them an attractive, sustainable alternative to conventional plastic packaging. Another factor that has pushed for the demand for these products is easy printability on the outer paper layer compared to conventionally used beverage packaging materials like plastic bottles and glass jars. Owing to these factors, many beverage companies are adopting these aseptic cartons over their former packaging solutions. For instance, In January 2021, Elopak supported BoxedWater’s sustainability enabling campaign #betterplanet by providing viable packaging solutions for its four new flavored water offerings.

Increased Uptake of Packaged Beverages to Partially Offset Impact of Covid-19

The impact of the COVID-19 pandemic was particularly visible across the entire food and beverages sector, which penetrated down to the packaging products. Extended lockdowns in many countries led to a halt in the production activities of many beverage manufacturers. According to the USDA’s GAIN report 2020, major milk-producing nations such as Germany, France, Italy, the Netherlands, Ireland, and the UK were negatively affected by the COVID-19 outbreak in Europe. The report also states that fluid milk production has declined, reflecting a downward trend in domestic milk consumption throughout Europe. This decline has further reduced the demand for packaging solutions such as cartons during this period.

However, lockdowns also resulted in the closure of many restaurants and cafes. Therefore, to fulfill the customary demand for beverages such as coffee, tea, wine, and beer, several consumers shifted to packaged alternatives available on the supermarket shelves or delivered via food delivery services. In support of this trend, Tetra Pak South Asia reported that UHT sales or ‘long-life’ packaged milk and other beverage categories like ready-to-drink ORS, coconut water, and dairy beverages experienced a strong market in the past year.

LATEST TRENDS

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Rising Demand for Convenient Packaging in Emerging Economies to Propel Growth

The demand for convenience-improving packaging products is expanding rapidly in the developing countries of the Asia Pacific and Latin America, on account of the large population in these regions. A majority share of the population is held by the millennial and the Gen Z generations. The young generation has increasingly sought convenience products to match their on-the-go lifestyle. Easy-to-carry and tamper-proof packaging helps them travel and work for elongated hours without worrying about the spillage and spoilage of the products. Furthermore, these packages are easily available in the brick-and-mortar retail shops and supermarkets/hypermarkets, making them easy to procure. This is expected to contribute to the global beverage cartons market growth during the industry forecast period.

Marketing campaigns launched by the manufacturers and the companies employing these cartons have also improved consumer confidence. For instance, Amul, a leading dairy association in India, launched their milk and milkshake offerings in beverage cartons offered by Tetra Pak. These packages were marketed as Tetra Packs that help in a convenient carriage and long shelf-life performance. Owing to this factor, Tetra packs became a synonym for beverage cartons in the country.

DRIVING FACTORS

Increasing Consumption of Packaged Dairy Products to Augment Market Growth

The sales of dairy products have shown a topsy-turvy trend in the past. For instance, according to the U.S. National Agricultural Statistic Service, the per capita consumption of milk declined from 23 gallons in 2000 to 17 gallons in 2019. The key reason behind this decline was the growth in the popularity of dairy alternatives. However, in more recent times, with the pandemic gaining momentum, people are turning back to conventional grocery habits, resulting in a larger uptake of milk and milk products. A report by Midwest Farm predicted that after the hit of the pandemic, the growth in demand for milk was recorded at 45 million gallons in two peak weeks of March 2020, which equaled its one-year decline in the past.

In emerging economies of the Asia Pacific and Latin America, the demand for milk and dairy-based beverages is expanding. The rise of key dairy corporations such as Amul and Mother dairy is a testimony to this fact in India. Even in China, the local acceptance of milk and dairy products has grown strongly over the past couple of years. According to the China Milk Quotient Report and Dairy Global, dairy sales in China expanded by 6.4% in the past year, accounting for a market of around USD 56.9 billion. The growth was driven by about 96% of the local population believing that dairy consumption could help in improving immunity, especially in the middle of the pandemic.

While the demand for dairy products is expanding, dairy companies and associations are putting effort into improving the product's shelf life and providing convenience to the customers. Furthermore, the consumers have become highly aware of the environmental harm created by conventional plastic packaging products, which drives the dairy manufacturers to take up sustainable packaging options like shelf-stable cartons to package their products.

Rising Usage of Smart Technologies to Boost Market Growth

The packaging industry is going through a digital transition, with companies introducing various technologies such as AI, machine learning, artificial neural networking, and source tracking systems to their products. These technologies help them assemble better products, assist in consumer data generation, support the purpose of consumer attraction, and help keep track of the supply chain loopholes and improve their profit margins. This trend has also entered into the beverage packaging sector, including the cartons vertical.

Companies such as Tetra Pak, Elopak, and SIG Combibloc have been invested in developing such technologies to support the beverage manufacturers demand to attract consumers. For instance, Tetra Pak has introduced Connected Package technology, which marks the cartons with special QRs that track the package. The consumer scans these QR codes via their mobiles, which leads them to the information center about the product and its manufacturing details. Companies can study the traffic received on their websites to understand the buying patterns of the consumers via this technology.

Furthermore, using technology such as smart colors for printing on these cartons could revitalize the market's growth. These colors change their appearance according to the temperature profile of the product inside, enabling the consumers to understand the best possible way to enjoy the beverage. Thus, these currently utilized or under-development smart technologies could help gain a large global beverage cartons market share in the forthcoming years.

RESTRAINING FACTORS

Unavailability of Recycling Infrastructure in Developing Countries to Limit Market Growth

The key feature that defines the global growth of beverage cartons is their recyclability. According to the ACE, developed economies have a higher share in the recycling initiative. For instance, in Italy, recycling infrastructure covers around 80% of the population. Similarly, In the U.S., a report by the Carton Council estimates that about 61% of the total population in 49 states has access to recycling facilities for their beverage cartons. However, the developing economies still do not have enough access to the recycling infrastructure. For example, in the Czech Republic and Slovakia, the recycling rate ranged between 15-25% in the past five years. Currently, only 30 collection agencies are present in India, and only four independent recyclers are present. Although this infrastructure can collect 40% of the cartons sold in the country, the infrastructure still fulfills the recycling demand only meagerly.

The swift adoption of beverage cartons and the unavailability of recycling infrastructure have led to large amounts of waste cartons entering landfills. As these cartons can hold liquid content, their entry into waste streams heaps the possibility of spreading diseases such as malaria. Hence, many countries across the globe have regulations or are planning to put restrictions on the usage of non-sustainable materials such as plastic linings to produce these pouch cartons. These regulations make the companies invest heavily in developing alternative resources that fulfill the functions of conventional materials, thus affecting the growth potential for the market players operating in the market, especially in developing economies.

SEGMENTATION

By Type Analysis

Increasing Need for Chilled Beverage Storage Propelling Refrigerated Cartons Demand

Based on type, this market is bifurcated into refrigerated cartons and shelf-stable cartons. Both these types are convenient for transportation and easy to use.

Amongst them, the refrigerated cartons segment held a larger share in the global market. Many beverage products such as milkshakes and fruit juices are susceptible to microbial development at risen temperatures due to the generation of a healthy environment. Therefore, beverage manufacturers are adopting refrigerated cartons that could be stored under controlled temperatures. Furthermore, these cartons are easily recyclable compared to shelf-stable cartons, which fuels the segment's growth in the global market.

The shelf-stable beverage cartons segment is projected to showcase faster growth as demand for packaging that can keep product shelf life longer are high in demand. As these cartons don’t require refrigeration until they are opened, consumers can easily transport valuable products for longer distances.

By Application Analysis

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Rising Consumption of Milk-based Functional Beverages Inflating the Dairy Segment

The global market is segmented into fruit & vegetable juices, dairy products, and others based on application.

Amongst these applications, the dairy products segment is expected to dominate during the industry forecast period. The increasing consumption of different types of dairy-based beverages such as fresh milk, UHT milk, milkshakes, packaged coffees, and nutritional beverages has led to the segment holding the largest share.

The others segment, which mainly includes still drinks, alcoholic beverages, and sparkling waters, is expected to grow at the fastest rate in the future. This is owing to the growing demand for these beverages from young consumers. Beverage manufacturers strategically collaborate with carton manufacturers to tap potential growth opportunities in this segment. Furthermore, the restrictions on single-use plastics have restricted the growth of bottled water, making mineral water manufacturers shift to boxed packaging types. This factor is also expected to vitalize the growth of the others segment.

REGIONAL ANALYSIS

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The global market size in Asia Pacific stood at USD 5.70 billion in 2020. Our research findings depict the region as the largest shareholder in this market throughout the industry forecast period. The dominance will be strongly supported by the economic growth observed in the developing countries in the region, including China, India, Taiwan, Indonesia, Malaysia, and Thailand. Rapid urbanization and an increase in disposable income are likely to boost the consumption of beverages, expanding the usage of beverage packaging such as cartons.

North America is one of the largest consumers of processed and packaged beverages. According to a report published in The Hill, an average American consumes around 8.7 liters of alcoholic drinks in a year. According to a study in Forbes, the U.S. spirits industry experienced a 5.3% increase in 2019, accounting for a record sales of USD 29 billion. The consumption of non-alcoholic beverages in the region has also grown steadily, crossing 118 billion liters in 2019 and is expected to cross 120 billion liters by 2022. The growth in various beverage sales across the region has expanded the demand for different beverage packaging products, including aseptic cartons.

The demand for low/non-alcoholic and functional ready-to-drink (RTD) beverages is expanding in the European region, considering the shifting preference of the newer generation towards lower alcohol drinks with novel taste profiles. The new generation is looking to experiment with novel tastes and textural experiences for the products, pushing the demand for packaged cocktails and mocktails. However, the EU had introduced a ban on single-use packaging plastics to be implemented by 2021. But, the implementation was postponed to 2025 owing to the pandemic. Therefore, beverage manufacturers are expected to seek alternative packaging products during this period. Carton manufacturers can attract their attention by developing sustainable and recyclable cartons with properties similar to conventional packaging.

The market in Latin America is expanding due to the increasing consumption of fruit juices in countries such as Brazil and Mexico. Orange and passionfruit are some key crops cultivated in the region, and their juices are consumed and exported on a large scale. These juices require to be stored under aseptic conditions as they are susceptible to microbial action. Thus the juice manufacturers have partnered with carton manufacturers to introduce their products in these aseptic packages.

The Middle East & Africa market is expanding on account of increasing sales of fruit juices and milkshakes in the African and Middle East sub-regions, respectively. The increasing spending capacity of the people in the region has led to increasing consumption of low-alcohol by volume (LABV) beverages, providing a push to the demand for beverage packaging solutions. According to Drink Day founder Erika Doyle, the zero alcohol revolution has strengthened in the Middle East in the past few years. Bacardi, a Bermuda-based Rum producer, predicts that the low to no alcohol beverages are expected to observe a growth of 400% by 2024.

KEY INDUSTRY PLAYERS

Key Market Players to Strengthen their Position through Product Development and Expansion Strategies

The market is controlled by very few large enterprises, making the market a consolidated one. Some of the key market players are Tetra Pak, Elopak, and SIG Combibloc Group Ltd. These three stakeholders hold more than 60% share in the global marketplace. The key companies in the market have employed a mix of organic and inorganic growth strategies. In 2020, Tetra Pak launched its virtual marketplace targeting new customers in food and beverage manufacturing, while in January 2021, Ferd Group invited potential investors to invest in Elopak to support the growth of the company in the future

The beverage cartons market players have increased their focus on product development to create novel solutions that can attract consumers towards packaged beverages. For instance, SIG Combibloc developed DrinksPlus Technology. This innovative solution enables aseptic filling of carton packs with liquid refreshments containing pieces of fruits, vegetables, nuts, or grains, adding a value-addition to the product.

LIST OF KEY COMPANIES PROFILED:

• Tetra Pak (Switzerland)


• Elopak (Norway)


• Sig Combibloc Group Ltd. (Switzerland)


• Mondi Group (UK)


• Westrock Company (U.S.)


• Visy (Australia)


• Stora Enso (Finland)


• Pactiv Evergreen (U.S.)


• IPI S.r.l. (Italy)


• Greatview Aseptic Packaging Co. Ltd. (China)


• Other Key Players

KEY INDUSTRY DEVELOPMENTS

• November 2020 - Tetra Pak joined forces with Stora Enso to explore the possibility of building a new recycling line to significantly increase the recycling of used beverage cartons in Central and Eastern Europe


• February 2021 - Capital Bra, a German rap star, launched his BraTee ice tea brand in collaboration with UniBev GmbH. The variety of iced teas were packed in Pure-Pak cartons. The rap star ordered over 6 Mn cartons before the launch of the product.


• April 2021 - SIG announced the construction of a new plant in Queretaro, Mexico. The company announced an investment of about USD 45 Mn in the new plant over the period of 2021-2023. The new plant will have a technologically advanced production capacity covering printing, cutting, and finishing of the carton packs.

REPORT COVERAGE

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A growing trend is observed in the market for various applications such as fruits & vegetable juices, dairy products, energy drinks, alcoholic brews, and functional beverages. The report provides qualitative and quantitative insights on this market and a detailed analysis of market size & growth rate for all possible segments in the market. Along with this, the report provides an elaborative analysis of the market dynamics and competitive landscape. The report's key insights are Porter’s five forces, recent industry developments in the market, the regulatory scenario in crucial countries, macro, microeconomic factors, SWOT analysis, key industry trends, competitive landscape, and company profiles.

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