Folding Carton Forecasts: Market Watchers Forecast Shifting Focus

Tonnage is on the rise. Revenues are too. Compound annual growth rates (CAGR) chart at between 4 percent and 5 percent. Economics and efficiencies are focal points that drive strategic directions. Enhanced customer experiences are being pursued. Digital technologies, complementary to flexo, continue to win favor.

Sales will approach, if not exceed $150 billion at close of business in 2024.

• Color is king!
• High-grade finishes are the norm!
• Graphics are described as “exceptional!”

Clearly, carton converters have plugged into connectivity and the opportunities it brings.

Market watchers, the likes of Technavio, Smithers Pira, Research And Markets and Mordor Intelligence, have identified those performance attributes as critical to success in the years between 2020 and 2025. While their individual forecasts differ in some degree, each one points to considerable sales growth. Succinct summaries, of recent observations issued, follow.

Technavio cited “incremental growth” in the global folding carton market and specified that tonnage will build by 12.8 million units by end of 2023. Half of growth in business volumes is expected in the Asia-Pacific sector. CAGR was seen as quite aggressive—better than 5 percent. The smart carton was called out as a point of emphasis.

Specific to North America, Technavio researchers stipulated, “Counterfeit packaging of health care products is widespread in the US, Canada and Mexico. Increasing safety concerns among consumers, related to spurious content, have encouraged companies to incorporate anti-counterfeit technology in folding cartons used in health care packaging. Use of anti-counterfeit technologies, coupled with the awareness of the need to use eco-friendly packaging material, will drive North American folding carton market growth.”

When addressing sustainability, it was further noted, “Several major brands, including Coca-Cola, Procter & Gamble and Nestlé have already started focusing on reducing the amount of plastic packages they use. Since folding cartons use eco-friendly materials—such as paperboard, which can be recycled and is biodegradable—growing awareness will drive future demand.”

Mordor Intelligence, in its global folding carton industry overview, stressed fast turnaround, personalized packaging requirements, digital print, and appealing and attention-grabbing graphics as profoundly influencing business. It charted CAGR at 4.4 percent in the 2019 through 2024 period.

Analysts cited sophisticated packaging solutions in applications, such as medical monitoring, as driving the demand for smart folding cartons. Observations voiced held that, “Incorporation of technologies, such as NFC, RFID, embedded bar codes and QR codes enable interaction with end-customers and consumers, and enhance customer experiences.”

Noting that, “Smart folding cartons are being used for product tracking, brand authentication and document security,” the market watchers decreed, “Technological advancements have helped in reducing the prohibitive costs of smart folding carton technology, thereby making it more economical.”

Research And Markets shared Mordor’s assessment of 4.4 percent CAGR in the 2019-2024 period. Its statisticians placed the global folding carton packaging market value at $117 billion in 2018 and said it is expected to accelerate and close 2024 at approximately $151.5 billion.

Comment was offered on key market trends. “With a strong pressure on the lesser usage of plastic, paperboard and paper cartons are experiencing a strong demand. To gain consumer attention, laminated and printed cartons with graphics and well-designed labels have been a focus area for food and beverage manufacturers.”

Smithers Pira research, contained in its report titled The Future of Folding Cartons to 2022, documented that the value of the global carton board packing market passed the $100 billion mark in 2016, consuming more than 40.3 million tons of material in micro- and mini-flute packaging applications.” Analysts contended, “Several market influences should combine to push worldwide demand for carton board in packaging to increase at 4 percent annually in the next three years, creating a global market value of $124.1 billion at the close of 2022.”

The team pointed to incremental gains in lightweight board grades and newly introduced recycled paper content as addressing environmental concerns and labeled them as “pressure points,” from both the brand and consumer perspectives. Members said, “Advancements and impending regulation changes are driving the carton board packaging market in new directions, as demand continues to grow.”

To that, they added, “More colors and a wider range of finishes are required to satisfy brand owners’ demands, encouraging the shift in favor of plain folding cartons, as these boards offer enhanced printing and finishing. Brand owners’ demands for exceptional graphics is generating interest in specialty inks and coatings, including satin, matte and gloss printing, as well as sensory coatings.”

Elaborating on the point, researchers said, “Converters are cashing in on the interactive trend, providing color shifting, reticulating and aromatic coatings. Uncoated carton board is also increasing in popularity among users who favor a more natural look and feel.”

Days before the January issue of FLEXO Magazine went to press, Smithers Pira augmented The Future of Folding Cartons to 2022 via issuance of its The Future of Folding Cartons to 2024. It pegged current market value exceeding $110 billion in 2019, then, like Research And Markets, forecasted, “The carton board packaging industry will experience high growth at the end-user level, approaching $150 billion in 2024.”

Momentum, according to this latest review, is “driven by the sustainability movement and increasing demand in emerging regions, especially Asia-Pacific, where an additional 11 million tons of material, worth more than $20 billion at current prices and exchange rates, will be required to meet demand relative to 2019 volumes.”

It was noted, “Asia-Pacific was responsible for 58 percent of market share in 2018, and is expected to make up 64 percent in 2024. North America and Western Europe made up 15 percent and 11 percent, respectively, in 2018.” In the next five years, market shares are expected to decline to 12 percent in North America and 9 percent in Western Europe, leaving the rest of the world to experience an ever-so-small decline, from the present 16 percent to 15 percent.

Food and drink products, which accounted for better than 50 percent of global folding carton production volume in 2018, are projected to post small but noticeable gains through 2024. Dry foods and confectionery are expected to show the highest growth. Health care products are also slated to capture a stronger share of market within non-food classifications.

According to Smithers Pira analysts, “E-commerce has taken a hold in the fresh food sector, with numerous brands emerging in the meal-kit home delivery space. Pet food producers have also latched on to the e-commerce bandwagon, with pet food subscription services now offering home deliveries of customized pet foods.”