Packaging is a system for corralling and protecting a product from damage. It plays a vital role in the safe storage and hygienic handling of a product. Moreover it also provides protection from environmental factors such as dust, moisture and wind. Apart from safeguarding the product, packaging also helps in marketing the product to customers. Elegant packaging design with various color schemes and designs sways the preference of the customer. Aesthetically appealing packaging is meant to reflect the quality of the product and hence serves both brand promotion and advertising purposes as well. Packaging is of two types, rigid and flexible. Flexible Packaging is any package whose shape can be readily changed to suit needs. Examples are bags and pouches. Whereas rigid packaging are boxes, trays, cans, bottles and pots and is the dominant market segment.

The packaging materials used commonly includes plastic, metal, brick cartons, paper, cardboard and glass. These materials are used in the various end use industries dependent on packaging requirements. For instance, aluminum and tin are used to store food & beverages in cans. This is due to the corrosion resistant properties of these metals which ensure that the product isn’t contaminated. Similarly, alcohol is typically stored and sold in glass bottles as they look visually appealing and have a longer shelf life than plastic bottles.

The end users of packaging materials include food beverages, electronics, pharmaceuticals, personal care, textile, consumer goods and chemical processing. The largest end user is food and beverages packaging with increased consumption of packaged food in developing countries. Pharmaceutical companies rely on packaging in order to protect and promote their products, meet regulations and increase patient compliance. Especially, the use of plastic is preferred due to high dimensional stability, moisture barrier, strain resistance, low water absorption and resistance to heat.

Plastic is the most used packaging material. It isalso lightweight, strong and cheap to procure in the current market.Plastic packaging materials are manufactured from petroleum and its derivatives, andare used in various end user industries. Polyethylene terephthalate (PET), is used as the primary feedstock in the manufacture of plastic bottles, which finds large application in food & beverages, pharmaceuticals and cosmetics industry due to its high durability, light weight, low cost and recyclability properties. However, stringent government regulations for petroleum and chemicals industry due to release of large amount of CO2 and greenhouse gases coupled with crude oil price fluctuation are expected to hinder the market for global plastic packaging. Although plastics are non-biodegradable and end up in landfills. A shift towards sustainable packaging using materials such as paper, paperboard, cardboard, metal and glass has been observed. Moreover, criticisms from governments, public and the environmental lobby affect the public profile of the company. Sustainable packaging is expected from customers who are now aware of the environmental consequences of using plastics.

Opportunities

The growing disposable income and consumer preferences for packaged goods coupled with retail industry, especially in Asia Pacific and Latin America due to rise in per capita income among the middle class is projected to witness a significant growth during 2017-2025. For instance, India Brand Equity Foundation (IBEF) is a Trust established by the Department of Commerce, Ministry of Commerce and Industry, Government of India, the retail market is expected to nearly double to US$ 1 trillion by 2020 from US$ 600 billion in 2015.

Also, increasing awareness regarding food contamination has intensified the packaging market growth. Asia Pacific is the largest and fastest growing market. With the advent of online shopping and consumption of cosmetics to catch up with global fashion and social trends has resulted in a booming consumer market in countries such as India, China and Indonesia.Moreover, in India the government’s “Make in India” campaign to turn the country into a manufacturing hub will have a positive effect on the packaging industry in India. North America is a market leader in paper packaging and recycles up to 70% of its used paper according to the US Forest and Paper Association. Almost 35% of the feed for new paper was from recycled paper. In Europe, the European Paper Recycling Council aims to achieve 74% recycling in the European Union with Scandinavian Countries particularly adept. The paper packaging industry in North America and Europe can serve as a model for the developing regions to adopt.

Challenges

The environmental concerns regarding plastic packaging have hindered its market growth. Moreover, the preferred substitute to plastic, paper packaging though recyclable is produced by logging of forest areas. This has resulted in stringent packaging regulations. Moreover, a constantly fluctuating oil price results in the rise and ebb of the plastic industry as well. Lack of recyclability and adoption of sustainable practices in developing regions will result in environmental harm.Due to changing customer preferences for flexible packaging, newer product designs have required technology innovation. Also, leaching of chemicals from packaging into the product is a major concern. Cases of toxic packaging has been observed in China which has created a sense of distrust in the public regarding locally produced and packaged food.

Regulatory Scenario

Stringent government regulations and time consuming approval process before launching commercially, pressurizes the manufacturer to obtain approvals prior to distribution. For instance,

• China: The Food Safety Law 2009 contains provisions requiring clean and non-toxic packaging materials and penalties for marketing food that is contaminated by packaging materials.
• India: Ministry of Environment and Forests banned use of plastic packaging for tobacco products and minimum thickness of plastic carry bags increased from 20 microns to 40 microns.
• EU: The EU Packaging Directive (94/62/EC as amended) seeks to promote the recovery and recycling of packaging waste.