Hot Packaging Markets: Understanding Growth Opportunities

Packaging is in high demand and growth projections are favorable for each segment of the industry. Despite the differences in flexible and rigid packaging, varying consumer behaviors and brand demands have led to significant opportunities in each format. But understanding the market segments where each type of packaging shines is imperative to making the most out of these opportunities.

Flexible and Functional

In the flexible packaging segment, a key aspect of this format’s rapidly rising demand is its performance attributes, and how it provides more than just a container for a product. For example, Alison Keane, president and CEO of the Flexible Packaging Association, explains that many flexible packaging structures can be resealed, incorporating a zipper into the package that can increase the life of a product.

Flexible packaging printers have seen demand in resealable pet food packaging. Image courtesy of the Flexible Packaging Association.

One market in particular that has presented significant growth opportunities is pet food. Keane explains that resealable flexible packaging in this segment is beneficial because it can prevent spoilage and unwanted animals or insects from getting into the product. In addition to the resealability factor, Keane says that the graphics flexible packaging printers and converters can now provide on pet food bags and pouches are of the quality that discerning pet owners look for when seeking out the best for their pets.

“[It’s the thought to] keep the dog on a diet just like me,” she says. “Make sure they’re healthy and make sure they live the longest life possible. Organic, gluten free … it lends itself to premium packaging and with flexible, you can really do a lot with beautiful graphics and resealable bags.”

Beyond flexible packaging’s ability to provide resealability for pet food, Ron Sasine, principal at Hudson Windsor, a boutique consultancy focused on packaging strategy, innovation and supply chain transparency, says pet owners are increasingly looking for premium packaging formats, many of which are representative of the packages they buy their own snacks in. For example, he says pet treats in standup pouches with special effects, such as a matte finish, portray a premium quality.

“The pet food aisle will look more and more like the human food aisle with every passing month,” he says. “Those transformations are being driven and are driving the same sort of print requirement in animal feed.”

Food and Beverage: Opportunities Across the Board

As the largest overall market segment in packaging, the food and beverage space offers distinct opportunities for both rigid and flexible formats.

Premiumization has become important in multiple markets. Image courtesy of the Paperboard Packaging Council.

One market that is in position for a packaging transition is bottled water. While bottled water has been an immensely popular consumer product in recent years, environmentally-minded consumers have been displaying a demand for a packaging format that trends away from plastic. For example, Brian Westerlind, communications manager for the Paperboard Packaging Council, says that boxed water has become an increasingly popular product and an upward trending package for folding carton converters to produce.

“There is definitely more awareness of the environmental properties of different substrates,” he explains. “Some biodegrade, some don’t. Generally, people think that paper is environmentally friendly. I think it’s a sort of cultural consciousness.”

Similarly, Sasine says that with the rise of specialty water products, such as carbonated and flavored water, cans have become a strong packaging format for this growing segment. As such, the print quality required to stand out in this segment is of growing importance to brands.

“We’re now seeing really significant upgrades in the quality of the print required in the can business,” he says. “Canned waters are going to continue to grow.”

Much like the rise of boxed water, Sasine explains that canned water’s growth is correlated to consumers’ sustainability concerns.

“The liquid packaging business is in a real state of transition today, as bottles are increasingly questioned by consumers and alternatives gather steam,” he says. “People intuitively understand that paper is recyclable. They intuitively understand that metal cans are recyclable. They are told that PET bottles are recyclable, but there is a consumer concern, and it’s apparent … there is concern about what repetitive use of PET bottles means to the average consumer.”

However, while rigid packaging options are becoming enticing formats for packaging water, there are several emerging opportunities for flexible formats in food and beverage. Dairy, for example, is a market segment that Keane points toward with potential for flexible packaging growth, despite Euromonitor International Passport data that projects less than 1% CAGR from 2017 to 2022 in the United States. She says that the positive reaction Daisy sour cream received from offering its product in a squeezable pouch demonstrates that consumers are receptive to this transition.

Daisy is one dairy brand pioneering the use of flexible packaging. Image courtesy of the Flexible Packaging Association.

“The Daisy sour cream pouches prove it can be done, and it can be done really well,” she says. “Even though it’s only projected to grow 1% as far as the market analysts and research is concerned, I am hearing a lot of folks from our end that are pushing into it, or thinking it’s a good growth market to push into.”

Keane explains that part of the reason why the emergence of dairy products in flexible packaging is a relatively recent phenomenon is because of how much research and development it required. She says the Daisy pouch took almost three years of R&D to reach the point to where it could be released to consumers. But now that it’s on the market, she expects similar products will shift into flexible as well.

“There was a lot of architecture and innovation to it, but now that people know how to get it done, you can start transitioning it into other products,” she says.

Potential in Premium Packaging

Regardless of packaging format, across nearly every market segment, brands and consumers have been pushing for premium packaging, and printers and converters have had to find ways to enhance the visual appeal of their products.

For example, boxed pasta may not be considered by many to be a premium product, but brands are seeking to stand out from the competition with new packaging strategies. And Sasine explains that the print quality in this segment doesn’t just extend to paperboard, it’s needed on the flexible films used in pasta as well.

“They use nice graphics,” he says. “They are well designed, well executed, using high quality films or cartons. … They’re making a play on quality, and that play is communicated expressly through the quality of print.”

While boxed pasta has transitioned its packaging into more premium formats, it is also a market benefiting from new innovations in flexible packaging. For example, Sasine says single-serve pasta options are now available in a pouch. Meanwhile, pasta accompaniments like tomato paste are also now available in pouches, including the two-tablespoon tomato paste pouch produced for Hunt’s by Bemis Co., which received the Highest Achievement Award in the 2017 Flexible Packaging Association Achievement Awards.

“You know you usually get tomato paste in a small can and you use only two tablespoons and you have the rest you don’t know what to do with?” Keane asks. “They made a two tablespoon pouch ... with a nice little spout on the end so when you squeeze it you get it all out.”

Cannabis brands are seeking high-end, child-resistant packaging. Image courtesy of the Paperboard Packaging Council.

Though long-standing markets like pasta have benefited from improvements in luxury packaging, brand new market segments are also seeking a high-end appearance. As medical and recreational cannabis achieves legalization in an increasing number of states, brands have sought out ways to market the drug in a sophisticated manner, while also adhering to the necessary childproofing requirements.

Westerlind says that he has seen many Paperboard Packaging Council members extend their folding carton offerings into the cannabis market, and are pulling out all the stops to provide premium packages to these new brands.

“As we see more utilization and recreational use, [cannabis] companies are looking for high end packaging that can really stand out, and paperboard does that well,” he says. “It also provides the childproofing features required by law.”

But as brands continue to seek out new ways to package their products and printers and converters adapt to market segment needs with a mix of analog and digital printing technology, Sasine recommends printers format their shops to be versatile. Maintaining multiple printing technologies and having an understanding of market segment demands, he says, will allow printers to adjust accordingly to the latest brand, consumer and market trends.

“The variability and flexibility with which the average printing operation needs to be able to produce today means your systems need to be flexible, your approach to customer needs has to be flexible, your print technology needs to be flexible,” he says.