Paper Bag Packaging Market

The global paper bags packaging is expected to witness sustainable growth in the next five years. The demand for paper bags packaging is poised to be driven growth of the food & beverage industry, growth of the retail sector, and cost-effective packaging solutions. Fluctuating supply and raw material prices act as a restraint for the market.

The rapid increase in population, along with growing urbanization, and changing lifestyle have resulted in the increased demand for packaged and ready-to-eat food products. An increase in per capita disposable income has led to increased spending on dietary food supplements, nutraceuticals and other premium healthcare and food products by the citizens of the developed countries. Additionally, the growing internet penetration has led to the growth of e-commerce, which is expected to fuel the growth of the online ordering of food and beverages, globally. The increasing population, growth in demand for dairy products, and rising health consciousness have led to the increased consumption of packaged food products, which is expected to lead to the market growth. According to FoodDrinkEurope, in 2018, the turnovers of food and drinks in Europe were valued at USD 1.24 trillion and USD 260 billion, respectively, which makes them the largest manufacturing industries in the EU. Additionally, the food industry in the developing countries is growing at a rapid rate. For instance, the Indian fast-moving consumer goods industry has generated USD 49 billion revenue in 2016, the growth being primarily driven by the liberalized foreign direct investment (FDI) policies, strong macro-economic indicators, and economic and industrial reforms, resulting in the development of the food production and processing industries.

A majority of the share of the FMCG sector is comprised primarily of food and beverage products, such as processed food including breakfast cereal, packaged beverages, coffee, tea, sugar, and beans. The increasing demand for packaging to carry articles from various end-use industries such as food & beverages, pharmaceuticals, & retail sectors for catering convenience for several enterprises, adds to the adoption of paper bags for packaging, leading to the market growth.

The growth of food & beverage and retail in both developed and developing regions is stable. However, the growth is limited in underdeveloped regions, which lowers the demand of paper bag packaging to an extent. The increasing environmental awareness regarding the use of plastic bags and increasing inclination toward processed food, primarily of the middle-class population and is expected to drive the demand for paper bags packaging in such regions. Thus, the impact of growing food & beverage industry on the global paper bags packaging market is expected to shift from moderate to high during the forecast period

The global market for paper bags packaging is expected to see increased investment into the expansion of its manufacturing capabilities and the recycling of paper. The market players are focusing on the use of recycled paper, facilitating the expansion of the paper industry. Moreover, according to The Paper Bag, France, the European Federation of multiwall paper sack manufacturers represents over 75% of European paper sack manufacturers operating in 20 countries. They produce more than 5 billion paper sacks every year, converting 650,000 tonnes of paper in 60 plants.

Furthermore, there is been an excessive dependence on imports across various industries due to the lack of manufacturing base in the major countries in the Middle East such as GCC counties, which is expected to lead to the adoption of recycled paper and other sustainable alternatives for manufacturing paper sacks. Such factors are expected to drive investments into recycling of paper. Thus, the global market is estimated to witness foreign investments and partnerships. Thus, investments in recycled paper use is expected to create opportunities for the global paper bags packaging market players during the forecast period.

The irregularity in availability and prices of wood pulp hinders the market growth globally. The dependence of paper manufacturing companies on imports from other countries such as Brazil, Chile, and Indonesia create issues in terms of supply of wood pulp and fluctuating international prices. For instance, regions such as GCC, which is primarily very arid, lacks the two essential ingredients for making paper, i.e., fibre and water. Water is in short supply and expensive while wood pulp is imported. Dependence on imported wood pulp challenges the power of the manufacturers, creating sustainability issues. This has resulted lowering the production of paper which ultimately hinders the adoption of paper bags packing in the region. The following chart shows the difference between the exported and imported values of wood pulp across the globe.

Thus, the impact of fluctuating supply and raw material prices on the global paper bags packaging market is expected to remain moderate during the forecast period.