Active packaging is a type of packaging which is witnessing widespread adoption by customers for the purpose of preserving the quality and shelf life of products like foods, beauty and personal care products, and beverages among others. Active packaging has some chemicals or reagents either integrated into the material or inside the package in order to maintain the quality of contents. Although all packaging solutions are meant to offer protection to the contents, active packaging solutions are known to add to the overall shelf life of packaged contents by offering required favourable environment to them.
The market growth for active packaging solutions is partially attributed to rapid growth of cosmetics industry worldwide. Although cosmetics and personal care products have been in use from a very long time, many countries are emerging as lucrative markets for industry players. Changing demographics and macroeconomic environment across such countries is favouring the increase in sales of cosmetics products, thus opening doors to immense growth opportunities for industry players. Saudi Arabia, for instance, had, for long, remained a follower in the global cosmetics market on account of stringent and orthodox regulations which had been keeping the country’s cosmetics and personal care sector from realizing its real potential. But, increasing number of working women in this country has transformed the sector’s performance in the country. The figure given below shows the growth in the proportion of working women in Saudi Arabia:
% of Wage and Salaried Workers, Female (% of Female Employment)
Source: The World Bank Group
Since working women have their own salary to spend from, spending on cosmetic products in this country has been witnessing an impressive increase. Pushing through of a good number of social reforms by the crown prince of the Kingdom of Saudi Arabia, in order to curb the influence of ultraconservatives on lifestyle of women in the country has also been instrumental in boosting the growth of cosmetics market in Saudi Arabia. Many global cosmetic product manufacturers have been pumping investments in this country in order to harness the immense untapped potential held by the sector here. As investments, both by domestic and international cosmetics companies, continue to stream into the production of cosmetics and personal care products in this country, the demand for packaging solutions will also continue to grow. Changes like these can be seen across many other economies worldwide. Such economies which had been underperforming for a fairly long time in this sector are now showing good growth. Since enhancing the quality and shelf life of these products is key to retaining customers, manufacturers are increasing the adoption of active packaging, thus fuelling the market growth.
The market growth is also being driven by increasing adoption of active packaging solutions among fresh and processed food manufacturers. North America and Europe are known to be the early adopters of new and innovative technologies. High awareness among people regarding the ill effects of some types of packaging solutions has led many companies to adopt active packaging solutions in order to offer highest levels of food quality and security to customers. The demand for this type of packaging is not confined to these two regions. Asia Pacific has emerged as one of the key markets for active packaging among F&B players. The demand for active packaging in this sector in this region is being contributed to by increasing focus of people in many economies on health. Japan, for instance, is one of the most developed economies in the world and besides being known for the role this country plays in the global economic growth, it is known for the focus of its people on healthy lifestyle. The country is witnessing a solid increase in the production of organic food on account of rising focus of people on healthy foods. The figure given below shows the trend in production of organic food in Japan from 2005 to 2015:
Domestic Production of Organic Food (Plant, Non-Processed), 2005-2015, Metric Tons
Source: Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF)
Increasing production of organic food items in this country is driving with it the demand for innovative packaging solutions in order to preserve the nutritional value of the food items, thus fuelling the adoption of active packaging by customers.
The global active packaging market growth will continue to remain good over the medium and long term. One of the other factors which seem to be favouring the market growth is solid growth of global pharmaceutical industry and stringent regulations in many regions regarding packaging of pharmaceutical products. Pharmaceutical sector has remained a key contributor to the global GDP for a very long time. Since this sector is somewhat resistant to recession, countries have been making huge investments into strengthening it. Another way of seeing this is that many countries are seeking to minimize their dependency on other economies for many drugs, which is pushing them towards making such investments. Let us look at Australia’s efforts in this direction for instance. As a result of the Turnbull government’s efforts to stimulate the country’s medical sector under 2018-19 budget, global companies such as Pfizer, Eli Lily, Johnson & Johnson, and Merck are planning to invest more in Australian market. Under the 2018-19 budget, the Australian government announced the $1.3 billion medical industry growth plan which included $248 million to be spent on the expansion of clinical trials in the country. While this is just one example, countries like India and China, along with many other economies across Asia Pacific, Africa, Europe and Americas are also pumping investments into gaining a considerably strong position in the global industry. As this continues, demand for active packaging solutions is also increasing, thus propelling the market growth.
About the Author:
Dhiraj Kumar Sharma is a Market Research Analyst at Knowledge Sourcing Intelligence. He combines his outright understanding of technologies with years of experience working in the industry to deliver actionable information to clients who span across industries and geographies. Dhiraj often works closely with clients in order to better understand their requirements and is known for the quality of market insights he delivers to them.