The packaging printing industry is a vast and complex market, estimated at $200 billion in the United States alone. The sector comprises various segments, with corrugated printing being the largest, followed closely by flexible packaging and folding cartons.
The industry has seen a decreased demand compared to the previous market surge. However, BASF’s marketing team said 2023 had been one of hope and resiliency following the challenges posed by the COVID-19 pandemic, supply chain disruption, price increases, slower demand, and market recovery.
Simon Foster, Head of Global Marketing, said the industry has been a rollercoaster for the past few years worldwide. Foster said the previous years’ boom borrowed from high demand regarding what the team is seeing now. He noted that, contrary to the pandemic economy, services and experiences dominate consumer spending instead of goods.
“High inventories and slower demand have meant this has been an unusual year,” Foster said. “There were still some destocking effects from the pandemic that carried over.”
However, Foster said retailers recently saw a solid start to the holiday shopping season. According to Mastercard, retail sales on Black Friday alone were up 2.2% versus last year, with online sales leading the way. Approximately $5.6 billion was spent online in the US on Thanksgiving and another $9.8 billion on Black Friday, a new record and a further 7.5% increase over last year.
Despite this potential bright spot, Regina Escandon Millet, Commercial Marketing Manager, said that brand owners are experiencing uncertainty in consumer loyalty amid softer product demand. Escandon Millet said, however, that brand owners and companies are responding to increased demand for sustainable packaging solutions. She said recent changes in the packaging industry would fall into three categories: awareness, sustainability, and size. People are more conscious of what they consume, what packaging a product uses, and its goal. For example, Escandon Millet said consumers wanted the packaging to be as safe as possible during COVID-19, and now they are coming back thinking of the end life, if its recyclable or compostable.
Customers are also more aware that structures can be mechanically recycled, so products should ideally be mono-material. Otherwise, the process becomes complex, but there are solutions like ChemCycling. Brand owners have also reduced the sugar (carbohydrates) and fat content in their packages and the size of them, meaning customers sometimes will consume two to three times the product package, resulting in additional packaging material.
With the functional coatings available in BASF’s portfolio, formulators can select from a toolkit to create packaging coatings for brand owners to meet the United Nations’ Sustainability Development Goals (SDG). Escandon Millet said the value chain must work together to find solutions, and that takes time. She added that industry events such as conferences and trade shows are shifting more into a collaboration, taking out the competition and focusing on improving the packaging of products for a safer, cleaner planet.
BASF approaches the value chain strategically with a before-store, in-store, and after-store method. The before-store demonstrates how BASF packaging and materials can change the industry—for example, by switching from solvent to water-based formulations, reducing exposure for work, and saving costs. In-store shows how BASF products can enable waste reduction. For instance, they keep products fresh or address the need of moisture or oil and grease barriers. After-store demonstrates how BASF provides materials that enable end-of-life recyclability.
The marketing team hopes that packaging engineers will consider all packaging components — when analyzing a change. For example, they can think of the adhesives, the substrate and the ink. BASF's different business units have solutions to offer, in adhesives offering ready to use and raw material to formulate adhesives from UV-cured like acResin® or water-based or compostable adhesives from the Epotal® line.
From the ink side, BASF offers solutions to formulate water-based inks with bio-renewable content like Joncryl® BRC 662 or Joncryl HPD BRC 596. From the substrate perspective, BASF offers solutions to coat the substrate paper or film with functional coatings with Joncryl, such as functional barrier to moisture vapor (MVTR), liquid, grease, as well as products that provide heat-sealability.
Smithers market report estimates that the global packaging market is expected to reach $1.05 trillion by 2024. The demand for packaging materials that are easily recyclable and sustainable, such as paper and board, recycled PET (rPET), and bioplastics, is expected to continue to grow. Furthermore, there will be a reduction in excessive secondary packaging. Flexible packaging is anticipated to replace traditional packaging with high-barrier films and retort stand-up pouches, challenging rigid pack formats for various food products, such as metal tins and glass jars.
Convenience packaging, such as microwavable meal cartons with easy-open and reseal components, is also in high demand. Health and wellness packaging with security measures, such as child-resistant closures and tamper-evidence seals, should also grow next year.
As the industry approaches the SDGs for 2025 and 2030, it's even more critical for formulators, converters, and brand owners to come together for a smooth transition. Foster said that the most influential members in the value chain are brand owners since they determine what substrate is being used.
“The printing and packaging industry needs to be willing to work together to enable all of us to win,” Foster said.