Flexible packaging: a “healthy” sector
Facts and figures from the 2020 market: with a slight drop in turnover, the balance sheets of Italian flexible packaging manufacturers confirm the a-cyclical characteristics of the sector.
Barbara Iascone
Istituto Italiano Imballaggio
It hadn’t happened since 2009 that the Italian flexible packaging sector recorded an, albeit slight, reversal of trend, thus interrupting a long series of positive performances.
Until 2019, considering the previous 10 years, the sector recorded an average annual growth rate of production expressed in tons of +3.9%. And this has happened even in critical periods, when the packaging sector as a whole has registered falls of 12%, while flexible packaging for converters has managed to hold its own, limiting losses to 3%, quickly recovered in subsequent years.
This will also be the case in 2020, when manufacturing activity will fall by more than 10%, while flexible packaging for converters will record a much smaller drop, confirming the solidity of the sector. In 2020 the average growth rate of the sector relative to the last 10 years drops to 3.5%.
| 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|
| Turnover millions of euros | 2,132 | 2,184 | 2,250 | 2,227 |
| Companies operating in Italy | - | - | - | 80 |
| Approx. workforce | 6,800 | 6,991 | 7,115 | 7,130 |
| Production t/000 | 382 | 391 | 403 | 399 |
| Exports t/000 | 210 | 215 | 222 | 219 |
| Imports t/000 | 3 | 3 | 3 | 3 |
| Apparent usage | 175 | 179 | 184 | 183 |
The world market
In 2020, the world market for flexible packaging from converters is estimated at around 97 billion dollars, 28% of which is attributable to the USA (+4% compared to the previous year).
At the European level, consumption will grow by 2.9%, reaching over 15 billion euros, with 79% attributable to Western European countries. In quantitative terms, consumption expressed in m2 grew by 2.5%, exceeding 58,400 m2. Analysis of sales expressed in terms of number of pieces also shows a positive trend (+1.2%).
The domestic market
The data shared in this analysis refer to the production of flexible packaging obtained by coupling films of various materials: plastic, aluminium, cellulose and, more recently, also biodegradable and/or compostable films. It is important to underline that the data expressed for the Italian market refer, in quantitative terms, to tons of packaging, unlike what is expressed for the European market.
After years of continuous and steady growth, both in terms of turnover and tons, in 2020 flexible packaging from converters will therefore record a drop of -1% for both quantities compared to the previous year.
In 2020 there will be about 2,227 million euros while production will be around 399,000 tons.
As in the case of the entire packaging industry, the effects of the pandemic have also been felt in this sector, albeit to a much lesser extent than in Italian manufacturing.
Despite the growing use of flexible converter packaging in some markets, such as the fresh-cut fruit and vegetable sector, the declines in other product sectors were the main cause of the setback.
Compared with the entire national packaging production, flexible packaging from converters accounts for 2% in terms of tonnes, but 8% in terms of turnover.
The percentage of national production destined for export remains constant and, also in 2020, is around 55% (-1.4%); imports are stable, but still minimal.
In spite of the negative sign relative to production, it can therefore be confirmed that the sector continues to be in good health, given that the losses recorded refer exclusively to the drop in production sectors and not so much to a drop attributable to the type of packaging.
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| FC | 100 | 99 | 95.7 | 101.3 | 108 | 108 | 112.3 | 116.7 | 121.7 | 124.3 | 127.3 | 130.3 | 134.3 | 133 |
| TOT. PACK. | 100 | 96.9 | 85.9 | 90.5 | 90 | 85.5 | 85.2 | 88.6 | 90.7 | 93.6 | 96.7 | 98.5 | 100.6 | 99.1 |
Types and sectors of use
As we know, flexible packaging for converters is characterised, among other things, by the fact that it is made by laminating different materials - plastic, paper and aluminium - depending on the end use.
They are subdivided according to the prevalence of this and that material: 73% are predominantly plastic, 25% are predominantly paper, the remaining 2% are predominantly aluminium.
Sectors of use
Innovative, modern and avant-garde, flexible packaging from converters is always ready to meet all market needs and overcome all challenges, both technological and environmental. Predominantly linked to the food sector (food accounts for around 94%), this packaging is also gaining ground in the non-food area.
In the food sector, the IV range of fruit and vegetables continues to be the largest user of flexible packaging with 26.1% (the area is growing in 2020, thanks to the attention to hygiene and protection by consumers that has exceeded the usual levels).
In second place, we find cheese (19.7% share), followed by baked goods and pasta (18.7%, down from 2019, due to the negative trend recorded by the sector).
The uses in food are of various types, and the item “other” (13.7%) encloses within it different categories of products, such as ready meals, sauces, candies, chocolate or, again, baby food, yogurt, honey, jams and beverages (mainly juices).
Continuing the list relating to the sectors of use, we find the processed meat area, i.e. cured meats, at 5.1% slightly down compared to 2019; same market share for frozen food.
The breakdown in the food area ends with coffee (3.5%) and pet food, slightly down, at 2.5%.
In the non-food sector, flexible packaging is used almost exclusively by the cosmetic/pharmaceutical and household cleaning sectors, which share 6% of the market. In the cosmetics sector, single-dose formats are particularly well developed, while in the home care sector we are talking about refills for bottles.
| 2019 | 2020 | |
|---|---|---|
| Bakery products and pasta | 19.60% | 18.70% |
| Cheese | 18.60% | 19.70% |
| Processed meats (cold-cut, cured meats) | 5.40% | 5.10% |
| Frozen foods | 4.90% | 5.10% |
| Convenience produce | 24.80% | 26.10% |
| Coffee | 3.80% | 3.50% |
| Pet food | 2.60% | 2.50% |
| Other foodstuffs | 14.70% | 13.70% |
| Total food | 94.40% | 94.40% |
| Pharmaceutical | 3.00% | 2.90% |
| Domestic detergents | 2.60% | 2.60% |
| Other non foods | 5.60% | 5.50% |
| Total | 100% | 100% |
Raw materials for production
As in the previous year, in 2020 there will be an increase in the use of paper for coupling, which translates into +2% at the expense of the use of plastic. The use of aluminum, on the other hand, remains stable.
The use of biodegradable/compostable materials continues to grow, through the coupling of paper + plastic (biodegradable/compostable) or plastic + plastic in both cases biodegradable/compostable.
This is a development in line with the demand for packaging with low environmental impact. This type of coupling is used, for example, in the realization of envelopes for the packaging of pasta and cookies.
On the basis of data from the Istituto Italiano Imballaggio database, it is assumed that out of the approximately 61,000 tons of flexible converter packaging used, 7% was produced by laminating biodegradable/compostable materials.
Flexible packaging for converters will continue to play a leading role in the future, thanks to its ability to understand and satisfy new and different market requirements. Attention to the environment remains, however, a fixed point for the sector, as does the fight against food waste and the search for sustainability, thanks to advanced technology made available to the entire supply chain.
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