FMI’ Analyst view: “Embracing Eco-Friendly Packaging: The Role of Kraft Liner”
The global Kraft liner market size is expected to propel at a CAGR of 1.7% over the forecast period. The market value is projected to increase from US$ 21,338.2 million in 2023 to US$ 25,606.3 million by 2033. It was valued at US$ 20,988.6 million at the end of 2022, and is anticipated to exhibit a Y-o-Y growth of 1.7% in 2023.
The kraft liner industry is expected to create an absolute dollar opportunity of US$ 4,617.7 million and is likely to expand 1.2x its current value through 2033. Rise of e-commerce has led to an increased demand for packaging materials, including kraft liners.
As more consumers shop online, there is a need for strong and durable packaging to protect products during transit. Kraft liners provide excellent strength and cushioning properties, making them ideal for packaging goods and reducing the risk of damage during shipping.
There is a growing emphasis on sustainable packaging solutions to reduce environmental impact. Kraft liners are made from renewable resources, primarily wood pulp derived from sustainably managed forests. This keeps operating costs low for businesses during the manufacturing process.
They are also biodegradable, recyclable, and have a lower carbon footprint compared to alternative packaging materials such as plastics. As companies and consumers prioritize eco-friendly packaging options, kraft liner demand is expected to rise.
Kraft liners are a crucial component of corrugated packaging. It is widely used in several sectors, including food & beverage, retail, electronics, and automotive.
Corrugated boxes provide excellent protection, stack ability, and versatility for transporting and storing goods. Demand for corrugated packaging such as Kraft liners is projected to elevate as the global economy expands and international trade continues to surge.
Emerging economies, particularly Asia Pacific and Latin America, are experiencing rapid industrialization, urbanization, and a rising middle class. Greater accessibility to disposable wealth and growth of e-retail in the domestic market are driving demand for packaged goods in this region.
They are further increasing the need for reliable packaging materials such as kraft liners. As these regions continue to develop, demand for kraft liners is expected to flourish significantly.
Kraft liners also offer flexibility in terms of printing and branding options. Companies can customize their packaging by printing logos, product information, and promotional messages on kraft liners.
It would help them in enhancing brand visibility and consumer engagement. As businesses increasingly recognize the importance of branding and marketing through packaging, demand for kraft liners with customization capabilities is likely to expand.
What Are the Key Kraft Liner Market Trends?
· Growing adoption of e-commerce is set to propel the need for durable packaging materials such as kraft liners.
· Increasing demand for sustainable packaging solutions, as a response to climate-focused regulatory developments worldwide, is predicted to bode well for the market.
·Technological advancements can enhance the printing and customization capabilities of kraft liners by implementing striking design aesthetics and brand messaging, further augmenting sales.
· Rising focus on lightweight packaging to optimize transportation costs is emerging as a key trend.
Key Dynamics in Kraft Liner Market Provided by Future Market Insights (FMI)
· Rising Concerns about the Environment to Propel Demand
Urban population across the globe is increasing at a rapid rate, and is expected to reach 8.9 billion in 2033. According to the United Nations, around 4.9 billion people are expected to live in cities by 2033.
Increasing population in urban areas is anticipated to improve the living standards and disposable incomes of individuals. It might further propel demand from manufacturers in the consumer goods and packaging sectors. Fulfilling demands from individuals while maintaining sustainability is identified as the primary concern for suppliers, as well as consumers across developed countries.
Aversion to use of plastic from all economies in the world is growing. It is set to push demand for feasible and sustainable packaging solutions.
Packaging giants are focusing on sustainable materials by understanding the future demand and consumer preferences. As a result, demand for paper is growing for use among packaging companies. Paper companies are mainly focusing on innovating and expanding their packaging capabilities.
· Surging Inclination Toward Corrugated Board Packaging to Boost Growth
Corrugated board is an environmentally friendly packaging material made from recyclable materials such as used cardboard containers and old newspapers. Corrugated cardboard is frequently made without the use of colors or bleaches, reducing its environmental impact and level of recyclability even further.
Corrugated packaging can also be reused. Recycling and reusing corrugated cardboard products has a knock-on effect, as it is made with a high percentage of recycled materials?
The energy required to manufacture corrugated packaging is hence considerably decreased. They are frequently made from widely accessible recycled materials. As a result, production transportation costs are cheaper than if the materials had to be imported or shipped long distances.
Innovative corrugated package designs such as retail ready packaging (RRP) can eliminate unneeded materials while maintaining structural strength and product protection. For example, retail ready packaging (RRP) designs allow for packaging with thinner walls. These features of corrugated packaging goods might promote sustainability for packaging makers and increase the use of kraft lining.
Which Factors Might Hinder Kraft Liner Sales Globally?
· Competition from alternative packaging materials such as plastics and composite materials might hamper growth.
· Fluctuating prices of raw materials such as wood pulp can impact production costs and pricing of kraft liners.
· Limited availability of sustainable and certified sources of wood pulp for kraft liner production can obstruct sales.
Country-wise Insights
How is Germany Creating Lucrative Opportunities for Kraft Liner Companies?
Germany kraft liner industry accounted for a share of 25.0% in 2023. It is anticipated to offer an incremental opportunity of US$ 360 million over the assessment period.
According to DIE PAPIERINDUSTRIE e. V., the Germany paper sector ranks first in Europe and fourth worldwide. Around 3000 different varieties of paper, cardboard, and paperboard are produced in Germany to meet a wide range of needs.
Germany has a robust export market, with its products being shipped worldwide. As companies in the country export their goods, they require high-quality packaging materials that can withstand international shipping and protect their products.
Kraft liners, with their strength and cushioning properties, are well-suited for this purpose. This might create a significant opportunity for kraft liner companies in the next ten years. They are projected to supply their products to Germany-based exporters and benefit from the country’s strong export market.
Why is China Exhibiting Surging Demand for Kraft Liners?
China kraft liner market is likely to hold about 58.4% of share in 2023. It is projected to account for about 60.9% share in 2033. A CAGR of 2.1% is likely to be exhibited by the country from 2023 to 2033. China has been investing heavily in infrastructure development, including transportation and logistics networks. This infrastructure development supports growth of domestic and international trade, further driving demand for kraft liners. These would be used to cater to packaging needs of goods being transported across the country and exported to global markets.
China has also been actively promoting sustainable packaging practices to reduce environmental impact. Kraft liners, being made from renewable resources and recyclable, align with these sustainability goals.
The government’s push for eco-friendly packaging, along with preferences for sustainable products, has fueled demand for kraft liners. These are projected to be used as an environmentally friendly packaging solution.
Competitive Landscape
Kraft liner manufacturers are focused on continuous improvement initiatives to optimize production processes, reduce waste, enhance operational efficiency, and control costs. This allows them to offer competitive pricing while maintaining product quality and meeting customer expectations.
They are working closely with customers to understand their specific packaging needs and develop customized solutions. This collaborative approach allows manufacturers to create tailored kraft liner products that meet their requirements, improve efficiency, and provide added value.
A few other players are investing in branding and marketing efforts to differentiate their products & build brand recognition. This includes showcasing unique features and benefits of their kraft liners, highlighting sustainability credentials, and actively promoting their capabilities through various channels. A few of these include trade shows, digital marketing, and industry publications.
For instance:
· DS Smith Plc partnered with Zeus, an Ireland-based global packaging company, to offer a Coffee Cup Recycling Scheme to the Ireland market.
· International Paper Company completed the sale of its India-based printing paper business, International Paper APPM Limited, to West Coast Paper Mills Limited.
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