In terms of market value, current forecasts for 2018 indicate that the value of the global flexible packaging market was around 170 billion USD in 2017, and rising to between 225 and 300 billion USD by 2024. A few industry forecasters are predicting even higher.
Variations in market size and growth forecasts in part depend on the particular reference sources used: flexible packaging may be shown in some studies as including both shrink and stretch wrap, shrink sleeve and stretch sleeve applications.
However, they all seem to agree that the largest market for all the different types of flexible packaging solutions can be found in food (Figure 7.1) and beverages (both retail and institutional), which accounts for a near 60 percent of all shipments (and nearer to 80 percent in some markets).
Figure 7_1 The largest market for flexible packaging is in food products and food snacks
As a guide, the key end-use markets for flexible packaging are featured in Figure 7.2.
Figure 7_2 Global flexible packaging market – the key end-use markets for flexible packaging
As can be identified from the chart, a key part of the upsurge in demand for flexible packaging has come from (packaged and processed) food applications, with changing lifestyle and eating habits all having a positive influence on the overall market share emanating from food and beverages applications. Such changes are in part driven by innovations in food processing and packaging that contribute to increasing the shelf life of foods . led by a whole range of snack and convenience foods, ready prepared meals, coffee pouches and on-the-go food and beverages, as well as the proliferation of quick-serve restaurants and cafés and changes in retail food trading.
Other important drivers in the growth of flexible packaging include:
Continued rapid growth in the global pharmaceutical and medical industry
New and changing applications in the health and personal care sectors
Continuing growth in the market for cosmetics products
High potential growth in retail non-food applications
Growth opportunities in household and consumer products
New growth opportunities in the nutritional and supplements markets
Continued growth for agricultural, horticultural and veterinary products
The potential in pet food applications
Other new applications, including sporting goods.
MARKET OPPORTUNITIES FOR NARROW- AND MID-WEB PRINTING
For the label converter looking to move into flexible packaging it is interesting to note that all the key end-use markets and the drivers of growth are virtually the same for both labels and flexibles. The label converter will often already be supplying labels to the same customers who are sourcing flexibles.
Flexible packaging buyers are certainly now looking for more cost-effective (or added-value) solutions, faster job turnarounds, versioning and variable data, just-in-time and on-demand printing, and reduced inventory costs. Something that the self-adhesive label converter has long been called upon to provide to his customers.
This all means that with flexible packaging run lengths and pack sizes getting smaller, as well as the possibility of adding in-line value and perhaps personalization, multi-versions and variations, there are undoubted opportunities for narrower , and particularly mid-web . label converters (using both flexo and digital technology) to capture a growing portion of the flexibles market that is not suited to wider web CI flexo or gravure presses as they struggle to print the smaller and higher added-value print and finishing run lengths economically.
Indeed, research in the US has already shown that jobs with the shortest run sizes are in pouches of any kind, as well as single serve and one-dose packs and sachets. These are key areas where label converters can most readily enter the flexible packaging market. Narrower and mid-web (especially in the 430-450 mm range) conventional and digital printing has effectively opened up the market to a whole range of new customers who have never previously had a solution for short-run flexible packaging orders.
Traditionally, lead times for flexible packaging printing on wide format flexo and gravure presses have been anything up to 40 or more days. Today, narrower and mid-web flexo and digital production technology has been able to bring this down to nearer ten days, or even less.
Certainly, there are many narrower and mid-web in-line style printing presses (servo-driven machines in narrower web widths) today that are now able to handle these shorter flexible packaging pouch and sachet runs that fit within the press web widths. Servo drives and controls have helped overcome the main challenges that have historically plagued the flexo market, such as gear marking, while ever-more sophisticated web handling and temperature control features on narrower web presses have made the handling and printing of thinner films far more accurate and precise.
Perhaps not unsurprisingly, a recent study of label converters in Europe found that 19 percent of them were already involved to some degree in the production of flexible packaging, while over 40 percent of visitors to Labelexpo Europe 2017 said that they had some responsibility for flexible packaging.
A similar study in North America found that narrower web label converters that had entered the US flexible packaging market were achieving an average of 9.73 percent per annum growth, with some of the leading narrow- and mid-web producers obtaining a growth rate of as high as 15 percent per annum growth.
Certainly, better rates of growth than many of the more traditional label converters are currently achieving.
FLEXIBILITY OF DIGITAL
With more and more installations around the world, many label converters are also now seeing value in the production of flexible packaging using digital printing. Although still only making up about one to two percent of total global flexible packaging volume, there is definitely an ongoing shift towards digital.
Digital printing’s ability and flexibility to react swiftly to market demands and to produce small print and custom runs, multiple SKUs (see Figure 7.3), on demand, without the corresponding loss of time that accompanies the production of the new tooling required for flexo, offset or rotogravure printing . offers significant and positive benefits. Digital printing, whether using toner or inkjet, effectively complements the traditional analogue methods.
Figure 7_3 Small run lengths, multiple SKUs, on demand printing and fast turnaround on HP Indigo 20000. Source- ePac
Growth expectations for all formats of digital printing are currently around 15 percent per year . considerably higher than conventional analogue printing. With digital packaging platforms opening up possibilities for creating new revenue streams, everyone in print packaging has an opportunity to take advantage of the latest digital and hybrid technologies which are now giving brands and their design teams more chances to use their creativity in new ways. Exciting for them and potentially lucrative for narrow- and mid-web label and flexible packaging companies to position themselves to benefit from these advances.
Digital printing technology is already being more widely used in the industry to serve the purpose of labeling/decorating flexible packaging.
Enhanced safety, less maintenance, efficient energy consumption and minimizing waste are some of the beneficial factors enhancing digital printing.
Narrower and mid-web label converters can also use digital print and in-line finishing to provide hard to replicate brand protection features on packs and labels, aiding anti-counterfeit efforts. The capability of digital systems to impart variable information – sequential coding or numbering, or an item-specific QR code – onto a pack or label also provides new security or traceability capabilities.
To this list of these more specific market sectors opportunities for the narrow- and mid-web converter can be added other more general changes in the market place that have an impact on flexible packaging growth opportunities, such as:
Ever-increasing demand for packaged foods
Shrinking household sizes (ready meals for one or two people)
A growing preference for flexible packaging over rigid packaging
Extended retail shelf-life requirements
Rising disposable incomes
Measures to reduce the carbon footprint
Changing lifestyles and convenience eating
THE ROLE OF FILMIC MATERIALS
While there are a range of flexible packaging materials and constructions that are available and widely used, it is plastics (polymer) films which now dominate the market and are said to currently account for over 70 percent of the industry’s revenue, making them a key area for the narrower and mid-web converter to understand.
Certainly the introduction of ever-more filmic materials since the 1960s, as well as advances in coatings, surface treatments and seals, sachets and pouches, the range of applications and markets for flexible packaging has grown dramatically and now includes packaging for very many different and varied markets.
The role and importance of plastics films was discussed in some detail in Chapter 2 where it was noted that the primary reason for the increasing popularity and growth of plastics in flexible packaging is the highly versatile nature of a wide variety of polymer films now available, which enables them to be converted into a large number of shapes, sizes, and designs, with a whole portfolio of performance characteristics. Also, plastics are more flexible, durable, and cost-effective than many other materials used for flexible packaging which has led to their increased adoption.
However, this does mean that one of the first challenges that the narrow- and mid-web converter will be faced with when moving into flexible packaging is deciding what paper, film, film construction, metalized film, etc., to use or include in a flexible packaging structure with barrier performance. Plenty of polymers, barrier materials, coatings and sealants are available and in common use in the industry.
Gaining a basic understanding of the key material choices available, the requirements of different product types and the commercial and technical considerations can undoubtedly simplify the selection process and pay dividends for those entering the market.
The aim should be to ask the right questions and agree the key specification requirements with each customer . not only what matters, but also what is known to work. To a large degree this will come down to experience and the implementation of due diligence procedures. The correct substrate specifications and selection will undoubtedly ensure a happy customer. Poor or wrong substrate selection can adversely affect the supply relationship, and may result in high wastage, rejected goods, higher costs and even non-payment.
It is therefore more than worthwhile for label converters to spend some time learning about flexible packaging films, film and barrier constructions, adhesives and laminating if they are looking to achieve a successful operation in this new market area.
FLEXIBLE PACKAGING APPLICATIONS
Previous chapters in this book have already mentioned the main market sectors for flexible packaging: food and beverages, consumer and household products, pharmaceutical and medical, healthcare, cosmetics and toiletries, retail non-food, industrial applications, nutritional and supplements, agricultural, horticulture and veterinary and pet foods.
Most of these sectors are already well served by the narrow- and mid-web label converter, so will be well-known to them in terms of market requirements, lead times, service, quality performance and, probably, with many of the same customers or buyers also sourcing flexible packaging.
For the label converter therefore, it maybe is not so much about finding new customers, but about understanding and servicing the shorter-run, smaller-size, added-value and niche flexible packaging requirements of existing customers . something which a growing numbers of label converters have been successfully and profitably achieving in recent years.
To aid the label converter in understanding some of the key flexible packaging market potential sectors and opportunities, the remainder of this Chapter takes a more detailed look at what it might be feasible for them to achieve.
FOOD AND BEVERAGE
Food and beverage flexible packaging, both retail and institutional, is said to account for a near 60 percent of all flexible packaging applications, with some market studies claiming a market share as high as 80 percent. It largely depends on exactly what a specific study includes. Does it include shrink sleeves or not? Does it include industrial applications?
Whichever way the market is analyzed, food and beverages are by far the biggest markets for flexible packaging. Indeed, as they are for labels. They therefore provide the biggest opportunity for the narrow- and mid-web converter.
In particular, the rising demand for snack and convenience foods in small or single size portions (Figure 7.4), increased spending on bakery and cereal bars, short-run ready meals and coffee or hot chocolate sticks (see Figure 7.5) and pouches, dehydrated and dry foods (instant soup, gravy and sauce packets, rice, food mixes), snack foods (again Figure 7.4) and nuts, spice foods, chocolates and sweets, ice-cream novelties, bakery products such as cookies (biscuits), cakes and chips (crisps).
Stand up gusseted pouches (Figure 7.6), and pillow pouches are widely used as flexible packaging products in the food sector. Pillow pouches have also witnessed high gains due to their increasing usage in the food, beverages and dairy industries. Low cost, high sealing ability and cost efficient transportation are some of the key properties positively influencing product penetration.
Figure 7_4 Examples from Mexico of pouches/bags used for snack food packaging. Source- Tory Plastics
Figure 7_5 Coffee packaging in sticks. Source- Constantia Flexibles
Figure 7_6 Coffee packaging in a gusseted stand-up pouch. Source- Constantia Flexibles
Stand-up pouches have become one of the most preferred flexible packaging products, owing to their versatility in various end-use food applications. Stand-up pouches are estimated to account for a revenue share of 75 billion USD by 2024 owing to attributing features that include high barrier properties against oxygen and moisture, low material consumption, and cost-effective properties.
Thermally processed foods are packed in these products to extend the shelf life. Other flexible packaging products used in the food sector include retort pouches, four side seal pouches, a wide variety of lidding, and portion packs. Lidding is also widely used for yogurt, cream and dessert pots.
A typical lidding film application is illustrated in Figure 7.7. Lidding films not only seal and protect the product but can perform an important decorative function. Most lidding films are designed to be peelable to allow easy access to pack contents.
Figure 7_7 A ready meal lidding film application. Source- OPM Group
Pre-printed wrappers and decorative bands are another effective way for flexible pack branding and packaging of foodstuffs. Flow wrappings are typically used on confectionery, sweets, butter packs, etc. In many cases products are completely over wrapped in paper or film to form an airtight seal. Figure 7.8 is a good example of this style of decorative packaging.
A steadily shifting preference for aesthetically appealing food products is also fuelling flexible packaging market demand. Increasing extended shelf life requirements along with preservation from contamination also open new avenues for industry growth in the food and beverages sector, along with rising consumer consciousness pertaining to food safety and hygiene.
Figure 7_8 Illustration shows examples of flow wrapped products
HEALTH, BEAUTY AND PERSONAL CARE
The healthcare, cosmetics, toiletries and personal care markets have long provided a wealth of opportunities for the label converter. Now, they also offer the opportunity to diversify into the production of high quality sachets (Figure 7.9), pouches and packs for many different . often shorter run lengths of multiple versions and variations . types of flexible packaging for the whole health and personal care market that includes toiletries, hygiene, shampoo, liquid soaps, creams, lotions, gels, cosmetics products, beauty products, wipes and packs.
Figure 7_9 Flexible packaging wraps and sachets used for beauty and personal care. Source- OPM Group
Flexible packaging technology is one of the key sectors predicted to witness significant growth over the coming years owing to growing middle-class populations, rising disposable incomes, and the escalating demand for all types of healthcare, cosmetics and toiletries products. New product launches by major brands in emerging markets (such as in India and China) are also projected to motivate the growth of the global cosmetics sector.
Ongoing innovations and applications in this sector which are predicted to continue to drive growth opportunities for label converters include all kinds of creams and gels (used extensively by the cosmetics, personal care and haircare industries), impregnated hand and tissue wipes, nutricosmetics, travel-sized creams, bath soaks, non-free-flow powders such as talcum powder . many of these applications being in sachets.
PHARMACEUTICAL, NUTRITIONAL, NUTRACEUTICAL, VETERINARY AND MEDICAL
The pharmaceutical and related sectors are variously recorded as the second biggest application section (around nine to 10 percent) for flexible packaging, with both trends in healthy living and increasing incidences of lifestyle related diseases among the working population expected to boost the demand for pharmaceutical, nutraceutical and medical items . which in turn will optimistically affect the flexible packaging and narrower web markets of tomorrow.
This sector is quite diverse in its array of products, which today ranges through all kinds of pharmaceutical products and ointments to weight loss and dietary supplements, sports nutrition supplements such as protein drink mixes and shakes, pre-workout powders, energy bars, foods for special dietary needs, powdered energy or vitamin drinks, spices, effervescent tablets, capsules and powders.
Single-dose packaging such as single-use pouches (Figure 7.10) and stickpacks provide today’s on-the-go consumers of nutritional and nutraceutical products with portability and convenience.
Figure 7_10 Single-use supplement and nutritional pack. Source- OPM Group
Stickpack packaging (Figure 7.11) in particular, is widely used by many leading nutritional brands for products such as drink mix supplements and protein powders, especially offered with easy open or tear propagation or laser scoring.
Figure 7_11 Stickpack packaging used for nutritional, pharmaceutical and haircare products. Source- OPM Group
It was interesting to note in the recent PCI Wood Mackenzie study of flexible packaging in Europe that they identified pet food as being the best performing flexible packaging category, currently growing in Europe at around four percent per annum.
A similar study in the US by the Freedonia Group pegged the US pet food packaging market at about 2.5 billion USD and again forecasts growth at around four percent. Pouches for pet foods (Figure 7.12) and pet products are identified as the fastest growing segment of the animal care market, due to them being easy to carry, store and re-seal to ensure freshness.
Figure 7_12 Pet and animal products. Source- OPM Group
Within the whole animal care sector are a wide range of products suitable for printing by label converters that include pet foods, pet care products, pet treats, veterinary powders and animal products, wild bird and wild animal feeds . with a great many short-runs of single serve pouches and gusset bags being produced on a regular basis for wet, semi-wet and dry pet foods.
Pet food packaging can be a challenge. It needs to prevent spillage, stand-up to multiple use, and maybe offer convenience features, such as re-closure or handle options.
RETAIL NON-FOOD, HOME AND GARDEN
Depending on the particular market study viewed, the whole non-food, home, DIY and garden sector accounts for up to 10 percent of the flexible packaging market, with products that include household items, laundry detergents, soaps, bath salts, under-the-sink packs, paints, pastes and plaster, lawn care, fertilizer, pesticides, grass seed, compost and bark.
Many of these products are packed in large bags and not suitable for the narrow- and mid-web converter, but smaller-sized flexible pouches and bags . both stand-up and flat . are also widely used and do provide an opportunity for single-use situations, such as flower and vegetable seeds.
With some studies showing industrial applications for flexible packaging being as high as six percent of the market, there are undoubtedly some opportunities for the label converter, especially for label companies that are already supplying labels into this sector and have potential customers that would also buy stand-up pouches and bags or sachet products from them.
Flexible packaging for industrial applications may require custom-made bag and pouch films and laminated rollstock specifically constructed to handle industrial powders, granular chemicals, lubricants, agricultural products and other such applications.
MAKING THE MOST OF THE OPPORTUNITIES
As a number of label converters are already proving, flexible package printing represents an opportunity for PS label converters to widen their product portfolio, compete on short-runs and smaller packs, and utilize high quality flexo, digital, combination and hybrid press technology (plus in-line lamination, added value embellishing or cold foiling), to increase the range and variety of high quality printed products produced.
Put together, the right width narrow- and mid-web presses, both conventional and digital, now offer label and flexible packaging converters the opportunity to target new short-run flexible packaging applications, multiple SKUs, to drive differentiation and personalization, offer faster turnaround and quicker delivery and reduced stockholding . and become more profitable.
As can be seen, the possible opportunities cover almost all types of consumer food, pharmaceutical, health and beauty, nutritional, garden, DIY, leisure and other retail market applications, as well as increasingly moving in to the industrial, automotive, agricultural, horticultural and medical sectors. Packaging types open to the label converter for this variety of products and applications are largely found or seen as being in stand-up pouches, lay flat pouches, sachets, lidding, and roll flow-wrapping materials.
But it’s not just about the print opportunities, successful converters targeting the flexible packaging market are particularly finding new business opportunities with the independent and more regional brands, helping these smaller and medium-sized company buyers to simplify how they buy their flexible packaging, and guiding them in understanding the specifications, tolerances, materials, origination, color technology, inks, and print requirements.
Quite simply, the more successful narrower and mid-web flexible packaging converters today are creating a new type of service model that makes the selection and purchasing of high quality flexible packaging in smaller sizes and shorter runs as fast and easy as possible.
Medical and pharmaceutical applications
Consumer products applications