Global packaging services market to reach $50 billion in 2023
The introduction of new business models and greater vertical integration will help transform the packaging market according to the latest exclusive strategic research from Smithers Pira. Smithers Pira latest market report The Future of Business Models in Packaging to 2022 estimates the value for packaging services in 2017 is worth $33.7 billion, and by 2022 will be worth $50 billion, increasing at a compound annual growth rate of 9.5%.
The packaging services analysed and quantified in the study are packaging design, materials testing, contract packing, predictive maintenance, and consumer research. Contract packing is by far the largest segment, with 70% of the value. The priorities for packaging services vary along the value chain, and the positions are not fixed. Vertical development of the business model is normal where services that traditionally belong in another step are integrated in the offering. A typical example of a vertical business model is the packaging converter that also offers design services.
Evolution of this type is being driven by a series of broader technical and market developments. These include:
E-commerce, which is growing very fast and changes the way consumers shop. It adds convenience, an unlimited product range to choose from and a transparency that people appreciate.
Digital printing as a maturing technology is changing how firms can communicate with consumers, and is a means to personalise products.
Smart and intelligent packaging opens a wide range of new possibilities for the packaging industry and for brand owners.
Contract packing is not a new concept, but it fits well with deeper collaboration across the value chain, and can deliver major coast savings.
Industry 4.0 will also change the packaging business and it will be necessary for organisations to get on board utilising the benefits from automation, data exchange, IoT, and communicating robots on the factory floor and in distribution chains.
Analysing Big Data – such as sensor data for temperature, vibration, rotation speed – means packaging companies will be able to improve and rationalise; implementing predictive, rather than reactive, maintenance and service. Simultaneously twinning this with smart consumer-facing pack formats will give brands new leverage to engage with customers via personalised promotions.
The market for materials testing will be shaped by new materials, biomaterials, and new technology. New materials for new ideas requires new thinking. Material testing is an important step when selecting new materials for packaging. With the test results customers can compare materials and select the most suitable application.
