Flexible packaging demand in Europe will pick up slightly in 2017, subsequently growing by 2.2 percent a year to reach 15.5 billion EUR (18.7 billion USD) in 2021, according to PCI Wood Mackenzie's latest review of the European marketplace.
The company’s Flexible Packaging Supply Demand Study – Europe to 2021 study has reported the fastest growing major flexible packaging markets in Europe in 2016 as Italy, Poland and Turkey, each growing by more than three percent during the year. This compared with growth in the overall European flexible packaging market of 2.1 percent. Germany, France and the UK continued to account for nearly 50 percent of European consumption.
According to the report, Europe’s 13.8 billion EUR (16.6 billion USD) flexible packaging market remains one of the largest and most sophisticated in the world, accounting for around 18 percent of the global total in 2016.
Poland’s flexible packaging industry is reported as achieving success by supporting the high levels of inward direct investment made by multinational food brand owners in recent years, and who are seeking to take advantage of growing packaged food markets in Eastern Europe and lower production costs available in the Polish market. In Italy, demand grew by three percent underpinned by the growing importance of supermarket retailing and changing consumer buying habits.Growth in Turkey, while significantly lower than earlier in the decade, continued to be boosted by a growing national economy, urbanization and relatively rapid population growth, including the influx of more than three million refugees fleeing the civil war in Syria, many of whom have now put down roots in Turkey.
PCI Wood Mackenzie analyst Paul Gaster commented: ‘For the third year in succession there have been few inflationary pressures with volume consumption growth in most European countries broadly tracking that of value. Poland, in particular, stands out as a major market where demand has continued to grow strongly, underpinned by robust domestic demand and a successful focus on packaged food exports, especially into Western Europe.’
According to the report, end uses that are growing faster than the market as a whole include coffee, snack foods, fresh produce, ready meals and pet food. However, flexible packaging sales for sugar and chocolate confectionery, one of the largest categories, were broadly unchanged. Tobacco was the only category to register a contraction, explained by it being a very mature market where flexible packaging sales are in slow long-term decline, having been adversely impacted by anti-smoking legislation, growth of the illicit tobacco trade, and the rapidly growing popularity of e-cigarettes.
'Significant' M&A has played an important part in shaping the European flexible packaging market.