UK paper and board packaging market set for modest growth

That is the summation of the Packaging (Paper & Board) 2014 report from business intelligence provider Key Note, which noted that paper and board packaging remains the most widely used packaging material in the UK marketplace. This will not change in the near future, regardless of the fact that dramatic market growth seems unlikely in the coming five years. Key Note therefore forecasts modest growth of 6.3 percent between 2014 and 2018.

The apparent total value of the paper and board packaging market increased by 1.8 percent in 2013 according to Key Note, continuing a trend that has seen the market grow on a consecutive year-on-year basis since 2009.

Consumer demands and perceptions are an important influence in this market given the large number of end-use sectors within which paper and board packaging is required. This has positive and negative implications with regard to ongoing market trends, according to Key Note. On one hand, for instance, the growing demand for convenient foodstuffs is fuelling the use of paper and board packaging in products such as ready meals, thereby contributing to increasingly valuable manufacturers’ sales in 2013. Yet despite this, consumer perceptions continue to be predominantly negative towards packaging, based primarily on the opinion that packaging of all varieties is harmful to the environment.

Further questions over future growth potential are also being raised by a variety of current issues which have emerged in recent years. The ongoing development of innovative, plastic packaging is a key one identified by Key Note, which points to Tesco’s decision to replace the traditional cartonboard packaging used for own-label, free-range eggs with recyclable plastic packaging, thereby removing the problem of leakage from broken eggs.

Other current threats include political calls to legislate against branded cigarette packaging, as well as high overheads for paper and board packaging manufacturers. In terms of the latter, both global woodpulp prices and domestic energy prices are extremely high. As such, market consolidation has been common; this has been exacerbated by industrial globalization, which has benefited huge corporations capable of creating global supply networks.