Global packaging market growing 3.9% CAGR to reach $1.42 trillion in 2028: Smithers report
Flexible plastics and paperboard
will be the fastest-growing packaging materials – reflecting both challenges and
opportunities as the industry targets greater sustainability – across the next five
years, according to the latest in-depth analysis from Smithers.
Its new market report – The Future of Global Packaging to 2028 – shows total
value in the sector will reach $1.17 trillion this year. Worldwide demand has
recovered strongly from the COVID-19 pandemic and subsequent economic disruptions, having
grown at 5.8% year-on-year across 2018-2021.
Despite macroeconomic uncertainty and rising input costs, Smithers expert
modeling shows global sales value will increase at a compound annual growth
rate (CAGR) of 3.9% to reach $1.42 trillion in 2028. Organic growth in
developing regions will account for the majority of this increase, according to
Smithers exclusive study of 50 individual national markets across the globe.
The market in Asia alone will increase by 5.3% year-on-year across 2023-2028.
The fastest developing markets are Indonesia, the Philippines, and India. They
are followed closely by China, already largest single market on the planet, it will
account for 25.3% of world packaging demand, by value, in 2028. India
meanwhile is now the third largest national market, with packaging sales
overtaking Germany for the first time in 2022. This is shadowed by similar, if
smaller emerging potential in South & Central America, Africa, and the Middle
Higher consumer spending power in these regions will help support increased
sales of packaged food, healthcare, and cosmetics packaging. This will sustain
increased sales of flexible plastic packaging formats, which offer distinct
advantages in these markets, despite growing awareness of the difficulty of
recovering these at end-of-life. A global CAGR of 5.1% will make flexible plastics
the fastest-growing packaging material across the next five years, with global
sales increasing from $197.7 billion in 2023 to $253.2 billion in 2028.
Paperboard (corrugated, folding cartons, and liquid paperboard) is still the
largest material segment, accounting for 31.8% of world value ($373.8 billion) in
2023. The segment is set to grow at a 4.2% CAGR through to 2028. This reflects
below average growth in transit segments, countered by surging demand in e-
commerce, and new premium sustainable alternatives to plastics for consumer
applications in developed regions.
This last trend is most advanced in Europe, which will soon see a reformed
Packaging and Packaging Waste Regulation (PPWR) join its pioneering single-use
plastics legislation. Many leading CPG brands have also committed to improving
the sustainability of their packaging portfolios across the forecast period, with
the first targets set for 2025.
This is providing an impetus for innovation that will permeate around the world
over the forecast period. In parallel, demand for recycled plastics is increasing,
but requires further investment in recycling infrastructure to provide a long-
term solution. Initially post-consumer recycled (PCR) resins will concentrate on
rigid plastics, and polyethylene terephthalate (PET) beverage formats in
particular; although flexibles and polyolefins are set to benefit from the
installation of more advanced (chemical) recycling capacity at scale.