Sustainability has established itself as one of the strongest trends in the packaging industry, with many e-commerce companies focusing on sustainable packaging solutions and moving towards paper-based packaging.

 

In the last few months, consumer shopping habits have drastically changed, as a consequence of the pandemic, which has translated into an acceleration of e-commerce. United States' e-commerce industry sales, according to the Census Bureau of the Department of Commerce, grew almost 32 percent quarter-on-quarter to USD 211.5 billion in the second quarter of 2020, accounting for over 16 percent of all retail sales.

A recent survey by Barclays Corporate Banking showed that 50 percent of all UK retailers have increased their reliance on e-commerce and social media since March. Online sales for Christmas this November and December are forecast to surge 33 percent year-over-year, according to a study from Adobe Analytics. Also, recent research from DS Smith revealed that European consumers plan to continue or increase buying groceries online (62 percent) and order home meal kits (49 percent).

These changes translate into huge market opportunities for packaging producers, especially those who eye low environmental impact, a trend that customers are increasingly concerned about. Government regulations in several countries, including South Africa, Italy and South Korea and some states in the US, Australia and India, in order to increase recycling and reduce the use of plastics including the ban on plastics in China from January 2021 are reinforcing this change in consumer behavior.

Sustainability has established itself as one of the strongest trends in the packaging industry, with many e-commerce companies focusing on sustainable packaging solutions and moving towards paper-based packaging.

According to the Dotcom Distribution’s 2020 eCommerce consumer study, sustainable packaging is more likely to gain shoppers than any other environmental factors as natural, plant-based products or fuel-efficient transportation methods, with 47 percent replying that they’re most likely to shop with a brand that uses sustainable packaging.

Currently, the total packaging market value is USD 850 billion, of which the paperboard packaging market represents roughly USD 300 billion, with 50 percent made from fresh fiber, according to a study from Smithers Pira, disclosed by Metsa Board.

Consumers, going forward, are interested in recyclable and recycled plastic packaging and in fiber-based substitutes. After the Covid-19 crisis, they have also significantly heightened sensitivity to hygiene and food safety, which are new strong preferences for packaging materials, according to McKinsey.

 

E-commerce and sustainability stand as major trends in the packaging industry

Recently, companies such as DS Smith, Sealed Air and Ranpak disclosed the underlying drivers of demand for their business in the next years will be sustainable recyclable packaging and e-commerce customers.

Companies like Marico, Bacardi, ASICS, HUL, Nestle India, Future Consumer, Coca-Cola, PepsiCo, Parle Agro have announced they will move to 100 percent recyclable packaging by 2025, transitioning towards a sustainable future.

The main trends with regards to sustainable packaging are zero-waste packaging concepts, replacing plastic with bioplastic (for example, those made by cellulose) and the use of recycled paper and certified paper (like FSC certified). The use of recycled and recyclable packaging has emerged as one of the main growth drivers for this industry.

With many countries experiencing lockdowns, consumers have started to pay more attention to the sustainability of the products they purchase, according to the report “Selling Sustainability: Adapting to the New Conscious Consumer” from PFS and LiveArea. More than a third (37 percent) of UK and Irish shoppers say that they are more conscious now about the environmental impact their online shopping habits than before the pandemic. About 73 percent of the consumers expect online retailers and brands to use recyclable packaging or minimize their use of packaging (74 percent).

 

Increasing demand drives innovation in the paper and pulp industry

Almost on a weekly basis, new innovative packaging solutions are being launched to meet e-commerce’s growing demand for sustainable packaging. Molded pulp products and thermal barriers are examples of these solutions.

Oji Holdings has started offering samples of its pulp mold product called PaPiPress, a product that uses three-dimensional molding technology to create a 100 percent pulp, eco-friendly product that can be freely molded like plastic. PAPACKS has also invested in a new production facility in Appingedam, in the Netherlands, where high-quality molded paper fiber parts are already being produced using the thermoforming process.

DS Smith and TemperPack, for example, have partnered to introduce ClimaCell, a sustainable thermal insulation barrier for temperature sensitive goods such as meal kits, perishable groceries and medical products, presented as a transport box and the insulation material made from recyclable paper and bio-based materials.

Other companies focus on recyclable or recycled paper from traditional and new, certified sources. German paper manufacturer Gmund has launched a new range of environmental-friendly certified paper suitable for packaging while another German company, Procos, is offering beauty brands a flexible corrugated cardboard box called Yoga box, designed for e-commerce for the holidays, made from 100 percent recyclable material.

In the US, Monadnock Paper Mills has launched a new alternative fiber performance board, composed of 30 percent hemp fiber and 70 percent post-consumer waste (PCW) recycled fiber, for a wide range of packaging applications, including cosmetics, wine and spirits, fashion accessories, tech and others.

 

Asia-Pacific region to drive growth in e-commerce packaging

The Asia-Pacific region is the fastest growing e-commerce region in the world. In 2019, China was the biggest ecommerce market, with over USD 1.9 trillion in sales, according to the Ecommerce Guide. India is currently the fastest growing market for e-commerce in the world, with revenues expected to grow by 40 percent year-on-year in 2020, grossing USD 38 billion, up from USD 27 billion in 2019 and USD 22 billion in 2018 as an increasing customer base will continue to drive the demand for more packaging solutions in the region, projects RedSeer Consulting.

In the United States, the second-largest market for e-commerce, in the first nine months of 2020, despite the pandemic, packaging papers and specialty packaging shipments increased by 4 percent compared to the same nine months of 2019, according to the American Forest & Paper Association (AF&PA).

 

Paper and pulp players invest in increasing packaging production

Many paper manufacturers have been strategically moving into the growing paper-packaging market. Paper and packaging producer VPK Group recently acquired the corrugated cardboard packaging manufacturer Encase, from Canadian Overseas Packaging Industries (COPI).

Spain-based Saica Group, is investing USD 72 million to build a packaging plant which will manufacture corrugated packaging in the state of Ohio, United States.

Packaging giant Mondi announced in September 2020 that it has installed new equipment at its corrugated box production plant in Szczecin, Poland, to produce sustainable packaging solutions for the growing e-commerce market in north-eastern Germany, Denmark, Sweden and Poland.

In Brazil, Klabin completed the acquisition, for approximately USD 64.4 million, of International Paper's units that produce corrugated board and paper for packaging. The acquisition strengthens Klabin’s position in the corrugated board segment, increasing the annual installed production capacity to over 1 million tons of corrugated board. The company is also preparing for its largest investment ever, the Puma II Project, which will add two new paper machines focusing on the domestic market.

As e-commerce expands and consumers become more aware about the environment impact of their shopping habits, the paper-based packaging market is expected to witness a slew of opportunities. Major players are already preparing for the increasing demand for paper packaging, creating new products, investing in new production lines and focusing on recyclable packaging, but there is still room for new investments over the next decade.

 

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