The global fresh food packaging market size is expected to reach USD 181.7 billion by 2028, according to a new report by Grand View Research, Inc. The market is expected to expand at a CAGR of 5.0% from 2021 to 2028. Increasing demand for fresh dairy products from developing countries is expected to be the key driver for the market over the forecast period.
The industry has experienced a significant impact of the COVID-19 pandemic owing to the disruption of the supply chain. The shutdown in China, which is one of the key raw material producers, has impacted packaging manufacturers globally. The shortage in supply of raw materials like plastics, aluminum, steel, and others from Chinese manufacturers has resulted in a demand-supply gap, however, the manufacturing is expected to ramp up the production gradually.
The demand for packaging of fresh vegetables and fruits remained intact as the supply chain remained unaffected and imports continued during the COVID-19 pandemic. Specifically, the fruits and vegetables with high vitamin C content witnessed a significant increase in sales which further contributed to the increased supply-demand gap for the market.
The increasing demand for eco-friendly packaging solutions has forced various companies to develop products that are recyclable or biodegradable. For instance, in November 2020, Amcor plc introduced a new product line, Packpyrus, which is a paper-based packaging solution for meat and cheese. Similarly, in September 2019, PPC Flexible Packaging LLC launched PPC green products, which include compostable and recyclable pouches to strengthen its sustainable eco-friendly product portfolio
Major market players are constantly acquiring smaller market participants to increase their market shares in the global market. For instance, in February 2019, Sealed Air announced the acquisition of MGM’s flexible packaging business to increase its market presence and expand its food packaging product portfolio. Similarly, in June 2019, Amcor Plc acquired U.S.-based Bemis Company Inc., a manufacturer of flexible and rigid packaging, to increase its global reach.
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The U.S. is one of the largest markets for packaging products around the globe with a total market exceeding USD 177 billion as of 2019, according to the Flexible Packaging Association. It is one of the largest producers and exporters for the application industries including dairy products, eggs, meat, and fruits and vegetables which has created a huge demand for fresh food packaging products in the country.
According to the data published by Produce Marketing Association in October 2020, fresh produce sales increased by USD 4.5 billion in the U.S. between January and August 2020 as compared to the same period in 2019. According to a survey conducted in July 2020, a majority of contemporary consumers preferred the purchase of fresh food and are willing to pay a premium price for the same.
Plastic resins such as polypropylene (PP), polyethylene (PE), polyvinyl chloride (PVC), polystyrene (PS), and others like paper pulp, metals, and glass are mainly used to package produce products. These plastic resins are derived from crude oil. In addition, materials like steel, aluminum, and glass are energy-intensive materials. Therefore, continuous fluctuation in crude oil prices leads to uncertainty around the availability of raw materials at lower or economical prices creating challenges for fresh food packaging.
Furthermore, to curb the humongous amount of plastic waste generated annually, many regulatory bodies and governments around the world have imposed restrictions on the generation of primarily plastic waste over the years. The regulatory bodies are emphasizing the circular economy under which higher importance would be given to the reusability of packaging products and strengthening of recycling activities which is expected to create challenges for the plastic material and opportunities for paper and paper board, bagasse, and polylactic acid.