The Europe Flexible Packaging Market has been valued at USD 52.59 Billion in 2020 and is expected to grow at a CAGR of 3.01% during the period 2021-2026. The Covid-19 pandemic resulted in a growing demand for flexible packaging in the region due to new or heightened hygiene and consumer-safety concerns and the drive for redefined sustainability. Technological innovation, sustainability trepidations, and attractive economics are the major factors driving the growth of innovative and more sustainable, flexible packaging. Also, the increasing market demand for customer-friendly packages and heightened product protection is expected to drive the growth of the market in Europe.
- The need for longer shelf life, increased adoption of flexible packaging over rigid packaging, demand for lightweight products, and changing lifestyle of people in Europe have been the primary drivers of the market. As flexible packaging is known to have better barrier capabilities, it can effectively protect the product from moisture and oxygen, which is particularly important in the pharmaceutical industry, where the production capacity is of prime importance.
- Various food and beverage manufacturers have been turning to flexible packing to add convenience and improve the consumer experience. Also, the price of the pouches is lower and provides high convenience, which has increased the demand for pouches across the region. In the food industry, beyond convenience, the other characteristics, such as sustainability, transparency, food safety, and reduction in food waste, are influencing the flexible packaging choice for meat, poultry, and seafood.
- The growth of the e-commerce industry and the increasing need for convenience are shaping new customer expectations in Europe. Some E-commerce and home delivery businesses are experiencing a massive boost during the pandemic, where packages require better impact and puncture resistance, driving a shift from rigid to flexible packaging for liquid products, as enhanced integrity is required with e-commerce purchases, thereby driving the growth of the market in the region.
- The consequences of the financial crisis on the consumer's purchasing power, rising prices of the commodities, and other such factors can be challenging to the market in Europe. Also, there are some environmental concerns about recyclability and sustainability, which may slightly hamper the growth of the market due to the common use of plastic material for flexible packaging. Furthermore, regulations with respect to disposal and recycling are becoming stringent in several European countries, which might be challenging to several vendors in the region.
- With the covid-19 pandemic, restaurants have shifted to take-away and food deliveries during lockdowns, driving the demand for packaged food, such as Frozen meat, fish, etc., which increased the need for flexible packaging. Also, the use of at-home refill packaging for home and personal care products has generated a new potential for flexible plastic refill pouches that minimize shipping weight and parcel size in transit.
Key Market Trends
Flexible Packaging is expected to play a major role in E-Commerce Industry that is growing significantly in the region.
- The COVID-19 pandemic has enhanced the growth of the E-commerce industry that many of the online shopping habits European consumers adopted over lockdown. Moreover, with increased E-commerce intensifying consumers' concerns about packaging, there has been an increasing demand for sustainable, flexible packaging in the region.
- Various companies have been focusing on expanding their portfolio to cater to the demand for flexible packaging in Europe. For instance, Mondi has been investing in its European operations to improve and grow its services to customers, upscaling MailerBAG production to approximately 350 million bags per year, responding to strong growth and customer demand for flexible packaging in eCommerce. When used to replace standard plastic mailers, the company's scale-up in production is expected to have the potential to substitute approximately 7,000 tonnes of plastic per year. Furthermore, in June 2021, Mondi also expanded its paper-based MailerBAG range to replace plastic packaging in e-commerce with a recyclable solution made of responsibly sourced, renewable materials.
- The E-Commerce industry requires flexible packaging such as bags, mailers, and folders that use less material than similar-sized boxes, weigh less, and conform around the product, taking up less space than a box during shipping. This makes flexible packaging to pack more orders in each load, resulting in fewer trips, less fuel burned, and a smaller carbon footprint. Such potential advantages drive the demand for the market in the region.
- The E-commerce industry has been growing significantly in Europe. According to the PPRO payment service provider company, as of January 2020, Romania was the country with the highest e-commerce growth in Central and Eastern Europe, followed by Ukraine and Estonia. Russia had a greater B2C e-commerce operation in Central and Eastern Europe, valued at USD 36 billion in 2020.
- Flexible packaging is the lightweight alternative that can be used to eradicate costs associated with production, damage, replacement parts, returns, waste, and shipping by allowing material handlers to transport more products with less, which is an ideal solution for e-commerce professionals working with a tight budget. In addition, many small and medium enterprises in the region have been looking for enhanced protection with extended shelf life against various ways that food can be spoiled, such as air, moisture, and sunlight, thereby driving the demand for flexible packaging.
United Kingdom witnesses significant growth opportunities in the market
- The growing urban population in the United Kingdom, altering patterns in lifestyle, including decreasing the amount of time spent on the preparation of meals, is leading to a shift toward more processed, easily packed, and pre-prepared foods and snacks, which is expected to propel the growth of the market studied. Also, the rise in demand for packaged foods, ready-to-eat foods, frozen foods, luxury foods is also likely to increase the demand for flexible packaging solutions in the country, owing to its ability to extend the shelf life of such products.
- Moreover, the growth of e-commerce sales, increasing demand from the food and beverage manufacturers for eco-friendly and recyclable packaging, increasing demand for personalization of products have been driving the growth of sustainable, flexible packaging solutions in the region.
- Various vendors have been focusing on strengthening their position in flexible packaging and broadening their sustainable solutions portfolio and extending their reach across the region. In July 2021, ProAmpac acquired Ultimate Packaging, a pioneer in flexographic and digitally-printed flexible packaging based in the United Kingdom, to expand ProAmpac's product portfolio. Ultimate packaging specializes in developing innovative packaging solutions to increase product shelf life, convenience, and recyclability across a range of product sectors. With the acquisition, the company is looking forward to gaining further growth opportunities in the region.
- Due to the COVID-19 pandemic, the United Kingdom has witnessed lockdown restrictions, which led to panic buying, which imposed massive pressure on the FMCG companies to adopt flexible packaging solutions, as the food companies have increasingly witnessed an inclination towards pre-packaged food in smaller, consumer-sized packaging. Furthermore, as flexible packaging increases the product's shelf life, customers have preferred flexible packaging in the region.
- The growing public consciousness around sustainability has led to an enormous change among UK consumers that paper-based packaging is more sustainable than plastic. In 2020, paper and board consumption in the United Kingdom amounted to 9.9. million metric tons, of which 5.6 million metric tons were consumed for packaging, which represented more than 50% of total paper and board consumption. Also, the British Plastics Federation (BPF) issued guidelines for pharmaceutical, food, drink, and cosmetic packaging to measure recycled content by including recycled packaging content in their packaging solutions. This has increased the demand for sustainable and recyclable flexible packaging offerings by various vendors in the region.
The Europe Flexible Packaging Market is concentrated and is dominated by a few major players like Amcor PLC, Mondi Group, Wipak Group, Sealed Air, and Constantia Flexibles. These major players have a prominent share in the market, and are focusing on expanding their customer base by leveraging strategic collaborative initiatives to increase their market share and profitability. With better technological advancements and product innovations, mid-size to smaller companies are growing their market presence in Europe by securing new contracts and by tapping new markets.
- June 2021 - Mondi Group expanded its range of plastic-free eCommerce packaging with MailerBAG range of sustainable paper solutions, which is fully recyclable in existing paper waste streams and replaces the need for plastic packaging. The company also recently invested in its European plants to deliver approximately 350 million paper bags per year for the online retail industry. Also, in the same month, Mondi's paper-based EcoWicketBag won gold in the 2021 EUROSAC Grand Prix for its overall performance, reduction of CO2 emissions, and convenience for the customer.
- March 2021 - Amcor won two Flexible Packaging Association (FPA) achievement awards for developing and producing innovative packaging technologies for its customers. Amcor dual-chamber pouch secured Gold achievement award for technical innovation, and Shield Pack clear high-barrier aseptic IBC liner garnered Gold achievement award for technical innovation. This technology extends distribution range, improves product quality and color, reduces transit failures, all while delivering other important attributes, such as extended shelf-life, durability, and clear packaging format.
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