The reusable packaging market is being driven by rapid industrialization, high demand from e-commerce industry and the substantial generation of single-use packaging waste. This article is written by Snehal Mendhe, Senior Research Associate– Chemical & Materials, and Tejvir Singh, Associate Manager – Chemical & Materials, at MarketsandMarkets™.
What is reusable packaging?
Reusable packaging refers to a type of packaging intentionally designed and manufactured for repeated use over an extended period, in contrast to traditional single-use packaging, which is discarded after a single use. The primary objective of reusable packaging is to minimize waste, reduce environmental impact, and promote sustainability. Unlike disposable packaging, which is discarded after each use, reusable packaging is constructed to withstand multiple cycles of use without compromising its structural integrity. Reusable packaging comprises primary consumer packages like industrial and transport packaging, as well as beverage containers. This category of packaging includes robust and durable containers, crates, pallets, totes, bins, bottles, and other materials that can be cleaned, sanitized, and reintroduced into the supply chain for multiple applications.
What factors are driving the reusable packaging market?
Increase in environmental concerns, growing e-commerce market, changing consumer preferences, circular economy initiatives, supply chain efficiency, cost savings, regulatory pressures, and advancements in packaging technology driving the reusable packaging market.
The reusable packaging market is driven by the increasing demand for sustainable solutions, particularly due to environmental concerns over plastic pollution and waste generation. Additionally, businesses are motivated by the significant cost savings achieved through the long-term use of reusable packaging materials. This combination of environmental consciousness and economic benefits fuels the adoption of reusable packaging solutions across various industries. The implementation of reusable packaging systems enhances supply chain efficiency through streamlined logistics and reduced waste, leading to improved overall operations for companies.
The durability and reusability of reusable packaging contribute to the efficient handling of goods, reducing the risk of damage during transit and improving product protection, resulting in cost savings and increased customer satisfaction. Additionally, government initiatives and regulations promoting sustainability and circular economy principles act as strong drivers for the adoption of reusable packaging solutions by businesses worldwide.
The rapid growth of e-commerce provides a significant opportunity for the reusable packaging market. As online shopping continues to rise, there is an increasing demand for efficient and sustainable shipping solutions capable of multiple trips. Reusable packaging has become an attractive choice for e-commerce companies as it helps reduce packaging waste and improves their environmental image. Advancements in materials and manufacturing processes create exciting prospects for the reusable packaging market.
Innovations in designing durable and customizable packaging solutions enhance its potential. With access to new materials and technologies, businesses can tailor reusable packaging to meet specific industry needs, driving its adoption and market growth. Collaboration among stakeholders also serves as a driving force for reusable packaging. As businesses, governments, NGOs, and consumers work together to promote sustainability and circular economy initiatives, the adoption of reusable packaging gains momentum. Collective efforts and partnerships lead to increased awareness and education about the benefits of reusable packaging, facilitating its integration across various industries.
Intermediate bulk containers (IBCs)
Intermediate Bulk Containers (IBCs) are specifically designed for the transportation and storage of bulk liquid and granulated substances, including chemicals, food ingredients, and pharmaceuticals. These containers are reusable and typically have a standard capacity of 1,000 liters, making them ideal for handling large quantities of materials efficiently. They are commonly used for transporting hazardous waste and marine pollutants.
One of the primary benefits of IBCs is their exceptional strength and durability, which allows them to have a lifespan exceeding 20 years. The cubic-shaped IBCs are particularly popular in various industries as they maximize space utilization, enabling more material to be transported within the same area. Additionally, their stackable design facilitates packaging goods in bulk quantities, making them a cost-effective and efficient solution for large-scale transportation and storage needs.
Source: Interviews with Experts, Government Authorities, Related Research Publications, Government Publications, and MarketsandMarkets Analysis
Impact of recession on the reusable packaging industry
The year 2023 is projected to present significant economic challenges with persistent food and fuel inflation. Higher retail inflation will likely impact consumer confidence and spending. Governments may respond to combat inflation by raising interest rates, resulting in a slowdown in new job creation and overall economic activity and growth. As a result, companies may reduce capital expenditure, being cautious about investments due to inflation worries and weaker demand. Developed markets could be at risk of entering a recession due to slower growth and high inflation.
Concerns over new COVID outbreaks and uncertainties in China’s post-pandemic trajectory pose real threats to global supply chains and manufacturing, leading to potential disruptions. Additionally, volatile financial markets, escalating trade tensions, stricter regulations, and the increasing pressure to incorporate climate change considerations into economic decisions will add to the complexity of challenges faced by businesses and economies.
Despite these difficulties, the year 2023 presents opportunities for flexible and adaptable businesses and leaders to navigate through tough economic conditions successfully. By charting a forward-thinking path and embracing flexibility, companies can find ways to thrive even amidst the uncertainties of 2023.
Europe dominated the market in 2022 and is expected to show similar trends in the coming years.
Europe accounted for a significant share of the reusable packaging market in 2022. The Eurozone’s improving economy is anticipated to boost industrial output in the region, subsequently driving growth in the automotive, construction, chemical, and food & beverages sectors in the coming years. Countries with robust industrial bases, like Germany, France, Italy, and the UK, are expected to play a pivotal role in the expansion of the European reusable packaging industry. The rising demand from these growing end-use industries is projected to fuel the demand for reusable packaging throughout the forecast period.
Key players to expand their geographical presence through new product launches, partnerships, acquisitions, and expansions
The market for reusable packaging is fragmented due to the presence of many players in the market. These players adopt collaborations and new product launches as their key strategies to achieve a global presence and cater to the needs of their customers. For instance, in June 2023, Brambles, a prominent player in supply chain solutions under the CHEP brand, has recently announced the renewal of its partnership with The Global FoodBanking Network (GFN) for an additional three years. The collaboration aims to continue addressing the critical challenges of food insecurity and food waste on a global scale. This extension builds upon the existing partnership between Brambles and GFN, which was initially established in 2016 and later extended in 2019. Similarly, during the first half of 2022, DS Smith divested its non-core Dutch paper mill operations for a net consideration of USD 39 million after accounting for transaction costs.
The key players have been undertaking these strategies to leverage their strengths and develop better products. These developments are expected to positively impact the reusable packaging market in the next few years. Some of the most common strategies adopted by these players include product launches, partnerships, mergers, and expansions.
Reusable Packaging Market: Key Deals 2022-2023
Authors
Snehal Mendhe, Senior Research Associate– Chemical & Materials, and Tejvir Singh, Associate Manager – Chemical & Materials
Source: www.marketsandmarkets.com