Smart Packaging Market - Forecast(2024 - 2030)

The Smart Packaging Market size is forecasted to reach US$50.35 Billion by 2027, after growing at a CAGR of6.23%during2022-2027.The growing consumer demand for premium quality food products that provide adequate shelf-life, safety, convenience and information is one of the factors propelling the growth of the Smart Packaging market during the forecast period. Growing developments by the key players coupled with the rising demand for smart packaging in various industries are set to boost its market growth in the upcoming years. In May 2022, Essentra Packaging entered into a collaboration with Advanced Material Development (AMD) in developing a new generation of Time Temperature Indicators (TTIs), a Smart Packaging technology for the pharmaceutical sector.

Report Coverage

The report “Smart Packaging Market– Forecast (2022-2027)”by IndustryARC, covers an in-depth analysis of the following segments in the Smart Packaging market.

By Type: Active Packaging, Intelligent Packaging and Modified Atmosphere Packaging.

By Application: Pharmaceuticals, Food & Beverages, Automotive, Electronic Goods, Logistics and Personal Care.

By Geography: North America, South America, Europe, APAC and RoW.

Key Takeaways

·???????? The growing middle-class population and a decline in the poverty rate have resulted in higher income and an increase in urbanization. This growth is impacting the retail industry and thus propelling the Smart Packaging market growth.

·???????? Smart Packaging applications in frozen foods, packaged foods and dairy products sectors are high in demand. The demand is driven by consumers' food safety concerns and retailers need to reduce the food loss in the supply chain as Europe’s annual food and drink waste amounts to approximately 100 million tons. The smart packaging market is estimated to witness steady growth compared to other regions due to growing vertical integration and thus efficient distribution and logistics.

Type- Segment Analysis

The Modified Atmospheric Packaging segment accounted for the dominant market share in 2021. This segment generated a revenue of $13.89Bn in 2021 and is analyzed to grow at a CAGR of 4.09% during the forecast period. This segment is projected to generate a revenue of $17.74Bn by 2027. However, the active packaging segment is also analyzed to grow at a higher rate due to its unique properties. It offers a longer expiry date, which allows the product to be distributed far away from the place of origin, the reduction in food waste, restricts oxidation, preventing loss of the original taste, smell and color of the product As a result, active packaging is extensively used in various end-use industry verticals, including pharmaceuticals,? food and beverages, automotive and more, which in turn is boosting its market growth. Additionally, growing developments by key players are set to drive the underlying market growth. For instance, in September 2019, AptarGroup entered into a partnership with Loop, a global circular shopping platform from Teracycle that delivers consumer products in reusable containers.

Application- Segment Analysis

The food and beverage segment dominated the market share in 2021. This segment generated a revenue of $18.51Bn in 2021 and is projected to reach $26.52Bn by 2027, growing at a CAGR of 6.03% during the forecast period 2022-2027. This is mainly due to the growing food and beverage industry. According to IBEF, India's food and beverage industry currently stands at US$40.3 billion and is expected to touch US$66.3 billion by 2018, registering a growth of 18 percent. However, the pharmaceutical segment is also analyzed to grow steadily during the forecast period due to the growth strategies adopted by the key players to strengthen their foothold in the market. In January 2021, Avery Dennison entered into a partnership with Schreiner Medipharm and PragmatIC to leverage NFC technology by extending smart packaging to the unit level for everyday pharma products to improve patient safety and experience.

Geography- Segment Analysis

In terms of geographic region, the North American region accounts for the dominant market share in 2021. The segment generated a revenue of $10.74Bn in 2021 and is projected to reach $14.97Bn by 2027, growing at a CAGR of 5.58% during the forecast period 2022-2027. This is mainly due to the booming personal care industry in the APAC region. According to IBEF, Beauty & Personal Care continues to be refined at the helm of consumer preferences and trends, intense industry competition, technology and innovation. Moreover, a joint study report by Google, Kantar and WPP titled ‘Connected Beauty Consumer report’ released in November 2020 highlighted that the Indian beauty & personal care industry is expected to grow to Rs. 111,000 crore (US$ 15.17 billion) by 2024, from Rs. 73,000 crore (US$ 9.98 billion) in 2019, with?e-commerce being the game changer. However, the Europe region is analyzed to grow at a higher rate, with a CAGR of 6.08% during the forecast period 2022-2027.

Drivers –Smart Packaging Market

·???????? The growing consumption of alcoholic beverages in the APAC region:

The growing consumption of alcoholic beverages such as beer, which usually requires packaging, is a vital factor driving the Smart Packaging market in the upcoming years. According to NFHS-5 data, by 2021, only about 22.9% of men and 0.7% of women in India aged between 15 and 54 consumed liquor. Moreover, about one-third of India’s population consumes alcohol on a regular basis and 11% of the total number of Indians are moderate or heavy drinkers. The growing population coupled with the increased popularity of various kinds of alcoholic beverages such as beer, vodka, wine and others with enhanced packaging among youngsters has eventually fueled its market growth. Furthermore, the increasing beer consumption in emerging countries of Asia-Pacific is set to drive its market growth in the upcoming years, as the product is extensively used as beer bottles. Also, factors such as increasing income levels, the influence of western lifestyle, ease of availability and reduced cost of beer have led to its rising consumption in these emerging economies. The countries such as India, South Korea, China and Thailand have been witnessing a significant increase in beer consumption. This increase in beer consumption would positively impact the Smart Packaging Market in the future as the majority of beers are packaged.

·???????? Mergers, partnerships and acquisitions in the Smart Packaging Industry and development of new products:

Major manufacturers of Smart Packaging are adopting strategies like mergers, acquisitions and other strategic alliances to strengthen their foothold in the market. They are also expanding their business using such means. Focus on their research and development is prime, as they develop new and cost-effective products for various industries. In March 2021, ProAmpac?partnered with the?Clemson University Department of Food, Nutrition and Packaging Sciences?to support the company’s commitment to leading the industry in developing smart food packaging. In February 2022, US-based packaging company Sealed Air acquired Irish packaging solutions company?Foxpak Flexibles to expand its presence in Europe. The company carried out the acquisition through SEE Ventures, a company initiative to focus on investing in ‘disruptive’ technologies and business models. With the addition of Foxpak, Sealed Air aims to help advance innovations in Smart Packaging.

Challenges – Smart Packaging Market

·???????? Stringent regulations associated with smart packaging:

The efficiency of IT services in companies depends on many variables and sometimes varies with the companies. Similarly, each organization is unique and thus hires specific technology to fulfill the specific business solution. Therefore, due to the lack of standardization, it is difficult for companies to predict the profitability of IT services in other companies based on the performance factor of the same technology. Mismatched network equipment, software platforms and configurations involve a lack of standardization in IT services, leading to communication difficulties, a lack of scalability as the enterprise expands and failing compliance standards that leave major security holes. Security risks of cloud computing have become the top concern in recent years. The shortage of resources/expertise has been the number one cloud challenge articulated for the longest time. Also, the shift towards cloud services from on-premise services is posing a grave challenge to the on-premise IT services.

Market Landscape

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Smart Packaging market. In 2021, the Smart Packaging Market share has been consolidated by the top ten players accounting for a significant share. Major players in the Smart Packaging Market are Amcor, Dupont, 3M, Temptime Corporation, Sealed Air, Multisorb?Technologies, Paksense?Inc, ULMA packaging, BASF SE, and Ensurge Micropower ASA.