Retail ready packaging market ‘to reach $63.4 billion by 2017’

Retail ready packaging (RRP) demand is expected to reach USD $63.4 billion and 32.1 million tonnes by 2017, according to a new study by Smithers Pira, a consultancy for the packaging, paper and print industry supply chains.

RRP is a high growth sector of the overall packaging market, having been adopted in the UK and Europe around 2005 and now spreading across the globe. In 2011, global demand amounted to 27 million tonnes of material in 2011, worth over $54 billion.

The most popular type of RRP is corrugated board, which accounts for three-quarters of the total volume of materials used in 2011. Within this, die-cut display containers are the predominant choice, making up more than half the market, with decline-wrapped trays constituting 17 percent of demand and modified cases the remaining 5 percent.

The Future of Retail Ready Packaging to 2017 presents an analysis of the global demand for RRP and assesses the major influences driving demand for this type of packaging. The market is quantified and segmented according to type of material, end use application and geographic location, across 18 individual countries and 22 end use markets for the period from 2011 to 2017.

This report provides raw material suppliers, converters, users, processors and others along the supply chain with an up-to-date view of the current state of the market, with forecasts to 2017, and includes over 250 tables and figures.

The major driver of growth in demand for RRP will be the burgeoning development of supermarkets, especially in under-developed economic regions. The on-going formalization of the retail supply chain in countries such as China, India and Brazil, as well as parts of Africa and South America, will provide the stimulus to maintain growth in demand for RRP, whilst preventing any marked decline in demand from other regions. Russia is also showing high growth.

The early adoption of RRP by European retailers is evident from the 38 percent share of demand enjoyed by Europe in 2011. The Americas accounted for a third of the total with Asia accounting for an additional 22 percent and the balance spread over the other regions. For the period of 2012 to 2017, Asia is expected to show the highest growth rate with demand predicted to improve at an average rate of 6.2 percent annually. This region will also see the highest incremental tonnage demand over the period, with more than 2.2 million tonnes of extra material required to meet 2017 demand compared to projected 2012 tonnage.

The Americas will contribute incremental demand for almost 1.2 million tonnes over this period, and a further 1.1 million tonnes of additional demand will emanate from Europe, in spite of declining markets in most of Western Europe.

Three-quarters of RRP demand originates in the food sector, while the beverage industry accounts for a further 16 percent, with the balance in non-food products. Over the medium term, demand for RRP from the non-food category is forecast to increase by 3.1 percent on average per annum from 2012 to 2017, compared to 2.7 percent and 2.8 percent for food and beverages respectively.

The food sector will contribute an additional 3.3 million tonnes of incremental demand for RRP materials in 2017, with a further 700,000 tonnes coming from the beverage market and 400,000 tonnes from non-foods. High quality graphics go hand-in-hand with RRP and this is creating an opportunity for producers in increase the value-added element of their product portfolios.

More and better paperboards are being developed and launched into the market by the paper mills, providing the material necessary for the demands of the retailers and marketers to create visually attractive packs to capture consumers' attention.

The Future of Retail Ready Packaging to 2017 is available until 31 October for GBP £3,555, and for £3950 after that. For more information, contact Bill Allen (ballen@smithers.com, +44 1372 80 2086).

Click here for Smithers Pira reports available from the L&L bookshop.