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The global packaging resins market size was USD 189.03 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with packaging resins witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 1.6% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 202.46 billion in 2021 to USD 326.56 billion in 2028 at a CAGR of 7.1% 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.
The market is expected to witness extensive growth due to the increasing demand for packaged food and beverages. Plastic packaging increases the shelf life of perishables and protects them from external factors that may degrade the quality of the product. Hectic work-life schedules are driving the demand for packaged foodstuff, further escalating the demand for packaging type of resins. Moreover, the increasing demand for consumer goods will contribute positively to the market.
COVID-19 Pandemic: Curbs on Production Activities May Hinder Growth
In the global plastic sector, the COVID-19 impact had a severe effect on primary producers, as well as recyclers, which caused the overall depression in the production and supply of this type of resins, plastics, and other petrochemicals. This further resulted in a negative economic downturn in the sector. The market experienced a decrease in industrial demand attributed to restrictions imposed by the government to pause production activities.
Large macroeconomic drivers for packaging resins are being demanded from end-use sectors, such as food & beverages, retail, consumer goods, and others. The rising disruption of the supply and demand chain of packaged food products accredited to the growing customer demand is estimated to result in multiple cost rises by manufacturers. However, the sector has also experienced a positive response from the food & beverages sector attributed to a surge in demand for packaged food products.
The increased e-purchasing activities attributed to the rising awareness in consumers regarding getting contracted with the virus and supposed risk has surged the demand for consumer goods and their packaging. However, the market volumes and prices were expected to bottom out in June, barring the second wave of COVID-19.
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The Emergence of Bioplastics in the Packaging Market is a Prominent Trend
There has been significant development in packaging materials and packaging methods in the last few decades. The development of bioplastic is one of the major technological advancements in the field of plastic packaging. Bioplastics are plastics produced from renewable biomass sources, such as vegetable fats and oils, woodchips, corn starch, agricultural byproducts, and others. PLA, PHA, and CPLA are types of bioplastic developed to overcome the issue of biodegradability. PLA is recyclable, biodegradable, as well as compostable. The development of bioplastic is one of the significant achievements in the plastic packaging sector. Companies have started employing plant-based packaging methods, which include the use of bioplastic. For instance, Milliken and Company joined the global organization of PHA (GO! PHA) to drive the adoption of PHA, a biodegradable polymer in single-use packaging applications.
Increasing Demand from Food & Beverages Sector to Propel Market Growth
Packaging resins are expected to experience strong growth in the forecast period owing to the high demand from the food & beverage industry. The increasing population, coupled with a rise in disposable income, has substantially driven the demand for processed, ready-to-eat, and ready-to-cook food products. Another factor driving the demand for packaged food is the rising awareness of waste and its attendant costs. For instance, according to BBC News, almost 17.5 % of the total amount of food thrown away in the U.K. comes from households. Almost 7.2 million tons of food and drinks from the household are thrown away in the country.
The availability of packaging can reduce the wastage of food. The world population is increasing. However, household populations are growing smaller. Smaller households have increased the demand for the closer regulation of food purchase and consumption. The increasing number of store visits required the growth of shelf-ready packaging, and in-store merchandise has substantially driven the demand for packaging, which, in turn, is surging the demand for packaging type of resins.
Furthermore, the observation on the demographic values implies that the packaging sector has been experiencing strong growth, and a similar trend is anticipated to be observed in the future.
Superior Properties of Resins to Drive the Market
Plastic packaging resins are exceptionally lightweight, strong, flexible, non-corrosive, safe, and durable. The durability of plastic resins provides protection against fragile objects and electronics. Plastic packaging increases the shelf life of perishables and keeps them safe from contaminants and dust. Plastic resin is one of the sustainable packaging solutions available in the market, which consumes less energy while producing than metals and other packaging alternatives. The easy molding ability is one of the prime factors supporting the increasing demand for plastic packaging resins. These superior properties, coupled with the relatively lower cost than alternatives, would propel the packaging resins market growth in the upcoming years.
Stringent Government Norms May Hamper Market Growth
The use of plastic is thoroughly controlled by the Food & Drug Administration (FDA), attributed to the concern regarding the impact of plastic packaging on food and pharmaceuticals. The Consumer Product Safety Commission has jurisdiction over the plastic packaging used for toys of kids. Stringent norms imposed by the government to ensure the safety of consumers and the environment and plastic disposal are likely to hamper the market growth.
Polypropylene Segment to Generate High Revenue due to Surging Demand from End-use Industries
Based on type, the market is segmented into HDPE, LDPE, PET, polypropylene, polystyrene, PVC, and others. The polypropylene segment is estimated to generate the highest revenue attributed to the strong production and increasing adoption of packaging resins in various end-use sectors. Followed by it, LDPE is highly employed in packaging films and food packaging attributed to its clarity and processability. The increasing demand for HDPE from various end-use sectors, such as personal care and consumer goods, attributed to its high strength and durability is expected to drive market growth. The PVC segment is expected to show considerable growth during the forecast period owing to the high demand for rigid packaging.
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Food & Beverages Segment to Hold a Significant Share due to High Population Growth
The market is segmented into food & beverages, consumer goods, and healthcare in terms of application. The food & beverages segment constituted the key market share. The growing demand for food & beverages supported by the increasing population is the key factor driving the demand for this type of resins. Besides, the increasing demand for consumer goods owing to a rise in disposable income is expected to drive the stipulation for these products. The high demand for consumer goods due to the rising disposable income and substantial expenditure on maintaining a good lifestyle shall significantly aid the segment’s growth.
Asia Pacific Packaging Resins Market Size, 2020 (USD Billion)
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The market size in Asia Pacific stood at USD 91.26 billion in 2020. The region dominated the packaging resins industry and is likely to maintain its position throughout the forecast period. The increasing population in countries such as China, India, and Bangladesh is expected to drive the demand for convenience food, subsequently providing ample opportunities to manufacturers and boost regional growth. For instance, according to The Agricultural and Processed Food Products Export Development Authority (APEDA), the market for ready-to-eat food products in India in 2016 was INR 2900 crores. The market is further expected to show a double-digit growth rate. Additionally, the presence of strong manufacturing bases for polymer resins, namely, propylene, polystyrene, PVC, and others in China, is expected to foster market growth.
North America is one of the thriving regions in terms of development and industrialization. The growth in the packaging industry is anticipated to be a significant driver for the market. Modern packaging technologies and advancements in production methods are expected to propel the growth of the packaging resins. The demand for plastic packaging is expected to increase during the forecast period owing to demographics and consumer preferences.
Europe is expected to show considerable growth owing to the increasing packaging industry. Russia’s packaging industry has significantly grown in the economy, allowing it to become the 10th largest packaging market in the world. Limited packaging waste laws and favorable taxation are factors influencing growth for packaging resins in Europe.
The Brazil packaging industry is considered to be the 7th largest across the globe. The growth in Latin America is largely driven by Brazil’s healthy population and the increasing disposable income. According to Pira International, South America is expected to experience high growth by the end of the forecast period attributed to the recent acquisition of manufacturers such as Amcor, Rexam, graham’s packaging, and others for PET and other plastic packaging materials.
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The Middle East and Africa is expected to show considerable growth. Population growth and the rising tourism due to the hosting of mega-events are key growth factors for the packaging industry. The increasing demand for packaged food products and perishables due to extreme weather conditions shall positively impact market growth. The UAE and Saudi Arabia are expected to be lucrative countries for the packaging industry due to the increase in the purchasing power of consumers.
Key Companies to Launch Sustainable Packaging Brands and Broaden their Market Presence
With a few global players capturing a significant share, the market is concentrated in nature. BASF, China Petroleum & Chemical Corporation, Exxon Mobil Corporation, LyondellBasell Industries Holdings B.V, Dow Inc., and SABIC are some key players in this industry.
Market players are operating principally based on the product's price and application characteristics. To boost their market share and achieve a competitive advantage, several major players are engaged in numerous strategic alliances to promote their brands and sales. For instance, in April 2021, Beiersdorf selected SABIC certified renewable polypropylene from the TRUCIRCLE portfolio for its new Nivea packaging.
An Infographic Representation of Packaging Resins Market
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The market research report provides a detailed analysis of the industry and focuses on crucial aspects, such as leading companies, products, and raw materials. Also, it offers insights into the packaging resins market trends and highlights vital industry developments. In addition to the factors mentioned above, the report encompasses various factors that have contributed to the market's growth in recent years.
This report includes historical data & forecasts revenue growth at global, regional, and country levels and analyzes the industry's latest market dynamics and opportunities.
Value (USD Billion) and Volume (Kilo Tons)
Type; Application; and By Region
Fortune Business Insights says that the global market size was USD 189.03 billion in 2020 and is projected to reach USD 326.56 billion by 2028.
In 2020, the Asia Pacific market value stood at USD 91.26 billion.
Registering a CAGR of 7.1%, the market will exhibit steady growth during the forecast period (2021-2028).
The food & beverages segment is expected to lead this market during the forecast period.
The growing demand for food and perishable packaging is the key factor driving the market.
BASF SA, SABIC, China Petroleum and Chemical Corporation, Lyondellbasell, and Dow Chemical Company are the major players in the global market.
Asia Pacific dominated the market in terms of share in 2020.
The usage of bioplastic by end-use sectors is expected to drive the adoption of this product.
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