Guest Column | February 12, 2016

The Packaging Landscape: Global Trends & Regional Factors Impacting Demand, Packaging Machinery, And Market Growth

The Packaging Landscape: Global Trends & Regional Factors Impacting Demand, Packaging Machinery, And Market Growth

By Laura Studwell, Food, Beverage, and Packaging Industry Marketing Manager, Omron

Here is what you need to know: the global packaging market is sustaining growth. According to Smithers Pira, the 2015 global packaging market was valued at about $400 billion. Growth underlines a shift in balance toward emerging markets, such as BRIC. North America showed a moderate increase from the prior year and is valued at $108 billion. Food packaging is the largest segment, accounting for 51 percent of the total market value. Beverage packaging accounts for 18 percent, followed by 6 percent for pharmaceutical.

Barriers To Growth
Pricing pressures, volatile commodity prices, and rising labor costs are barriers to growth. When it comes to volatile commodity prices, the cause is rooted in the increasingly globalized packaging market. When commodity markets were more localized, participants had a better feel for demand. This proximity to supply and demand factors allowed prices to follow more predictable patterns. However, the fact remains that the global packaging market has been permanently opened and this has caused volatility. The unpredictability of price levels has led countries that understand their own long-term raw material shortages to enter and exit markets as prices reach certain levels — increasing the frequency of price movements.

Global Trends
Main drivers include the performance of the worldwide economy and demographic factors, such as population growth and increasing levels of disposable income that boost demand for products. However, other trends, such as new packaging types, also affect the development of the market.