Flexible packaging for converting – Data 2016

Data and facts on the youngest packaging type currently on the market, which enjoys good health with the exception of some minor setbacks having mostly to do with less than stellar performance of certain target sectors.   Barbara Iascone

Flexible packaging is a modern solution that is well-matched with today’s consumer trends: communicative and easy to personalize, this packaging also offers valid reasons for marketing departments of user firms to take interest.
The polylaminates used to produce flexible packaging are the result of combining cellulose, plastic, aluminium film or metallized materials according to the characteristics of the product to be packaged.
Their market share continues to see positive growth, albeit not as robust as that seen in the recent past.
If we look at the last 10 years (thus also including the beginning of the global economic crisis), we see +15% growth, both in terms of production and in terms of employment. The latter datum is a point of pride for the sector: the number of Italians employed by flexible packaging rose even in the darkest hours, representing a feather in the cap of Italian industry.

Market trends
Thanks to its adaptability to various uses, flexible packaging has managed to consolidate its position in numerous sectors, intercepting shares from various competing materials, especially paper and plastic. This characteristic, along with a very strong position in food products, are the main reasons for flexible packaging’s excellent performance.
Another important factor to this packaging’s growth has been exports, which on average represent 48% of production. The positive trend of exports applies both to empty packaging and that already containing products.
Significant, in this sense, is the widespread use of flexible packaging for products of which Italy is a strong exporter, such as coffee, pasta and baked goods, pet food and 4th range fresh fruit and vegetables.
This and other factors maintain flexible packaging’s strong market position even when the economy as a whole suffers.
Considering Europe as a whole, Germany is the biggest producer, while Italy, Spain and the UK compete for second place.
According to a report by PCI Films Consulting, in 2015 the global flexible packaging market for food and non-food sectors amounted to some 84 billion dollars in 2015 (table 1). That’s +4.5% over the previous year. The global market is split among North America (27%), Central and East Asia (24%), western Europe (17%), Southeast Asia and Oceania (17%) and the rest of the world (15%).

2016: what happened in Italy
The number of operators in the Italian market has remained stable for many years.
Production has been higher during the last year than in 2015 (+2.2% with 373,000 t), driven by domestic demand, which closed the year at +3% over 2015.
Exports also performed well, but with a modest growth rate, ending 2016 with +1%.
Exports nonetheless represented an important component of overall production, owing to the high quality of the product offer and service offered to customers according to their requirements.
Also in 2016, turnover amounted to 2,091 million euro (+2% compared to 2015). Imports remained stable with modest volumes (table 2).
Since 2010, production has been sustained by an average annual growth rate of 3.5%, while turnover averaged 4% growth annually.
Raw materials for production
According to analysis by Istituto Italiano Imballaggio of the various types of laminated materials, 73% of flexible polylaminates for converting are derived mainly from plastic, while 25% is mostly paper and 2% is mostly aluminium.
The ongoing process of flexible packaging solutions becoming increasingly lightweight continues, as evidenced by the mix of raw materials used for production of flexible polylaminate packaging.
In terms of tonnage, the total amount of raw materials used in 2016 fell by about 1%. To be more precise, recourse to paper and board grew (+3%), as well as aluminium (+1%), polyethylene (+0.6%) and polyester (+1.4%). Other materials (nylon, polypropylene and other plastic films) saw their usage drop by between 6% and 4%.

Sectors of use
Food. As shown in table 3, the food sector remains the primary target market of flexible packaging (92.2%). This is definitely due in part to steady growth of ready-to-use products, especially 4th and 5th range, but also ready meals and frozen foods.
More specifically, baked goods and pasta have a share of 23.5%; 18.3% is used for packaging 4th and 5th range products, and 15.7% goes to cheeses.
Following up are processed meats and cold cuts (7%), showing progressive growth both in brand name and store brand products; frozen foods with 6.1%; coffee with 4%; and pet food with 4.6%.
Pet food shows constant growth, with flexible packaging for this category gaining ground on all other materials for both dry and wet food.
The category “other food products”, with a 13% share, includes sauces, ready meals, seafood products, candy and confectionery generally, baby food, yogurt, spices, ready-to-serve olives, honey, tomato products, fresh meat, beverages, condiments, etc.

Non-food. In this sector, domestic detergents have a 4% share. This product type presents two salient features: a solid trend of replacing the paperboard box with the flexible polylaminate bag (e.g. compress tablets for the dishwasher), and an increasing consumer orientation toward buying “refill” type products.
A similar disposition is also influencing the personal care sector, in which liquid soaps are increasingly offered in a refillable format. Looking at the cosmetic sector of creams, flexible packaging is taking shares from other packaging types because more and more brands are offering monodose formats made from polylaminates.
Taken as a whole, the pharmaceutical and cosmetic/perfume sectors have a 3.8% share.                                            

Barbara Iascone
Istituto Italiano Imballaggio