Although many businesses are still ailing from the effects of the global economic downturn and consumers remain somewhat reluctant to spend, the packaging industry has adapted to meet the new market challenges. Cutting-edge innovations in design, such as interactive packaging and smart labels, are on the rise, while perennial concerns such as sustainability continue to play a key role in the packaging industry.

Despite lingering economic difficulties brought on by the global economic crisis, the packaging industry is set to grow steadily for the short-term future thanks to rising demand for a range of packaged consumer, commercial and industrial goods. A number of key trends, including environmental concerns and technological innovations, are driving strength in sales. In short, the packaging industry is responding well to the changing needs of the market.

A 2010 report from Pike Research forecasts worldwide packaging industry revenues will increase from $429 billion in 2009 to $530 billion in 2014, reflecting a growth rate that is faster than that of the overall global economy. This rapid expansion will bring with it a corresponding increase in materials usage, energy consumption, transportation and disposal processes, making environmental impact a key concern in future packaging.

As with last year’s top pack trends, sustainability remains a driving force in packaging, with many businesses working to adopt or expand eco-friendly processes.

Based on responses from 630 packaging professionals, an annual survey from Packaging Digest found that sustainability has become an important factor in decision-making among nearly two-thirds of packaging companies. Sixty-one percent of respondents also said that sustainability has become a priority among their customers.

Today, 98 percent of respondents to the Packaging Digest survey are familiar with sustainability issues, up from 57 percent in 2007. Those who claimed they are “not at all familiar” with sustainability also shrank from 10 percent in 2007 to a mere 2 percent in 2010.

“Sustainability is not slipping down the priority list, but instead of seeing new developments, expect to see a continuation of what we have seen, with a few twists,” market intelligence firm Mintel explains. “There will be a greater focus on reduced packaging that promotes environmental responsibility in combination with uniqueness, such as boxless cereal bars or more cereals without the inner bag.”

Companies are also formalizing sustainability practices and making them an integral part of the business. Packaging Digest found that roughly a quarter of packaging companies have codified their sustainability efforts and 35 percent have made their strategies public. The most popular sustainability guidelines involve: energy consumption (62 percent); recycled content specifications (54 percent); packaging design (49 percent); and bans or limits on certain materials usage (43 percent).

Pike Research estimates that eco-friendly packaging will nearly double in revenues between 2009 and 2014, rising from $88 billion to $170 billion.

Despite recognizing the importance of sustainability as an ongoing packaging trend, many respondents are also concerned about “greenwashing,” the misrepresentation of a product’s environmental effects, with 81 percent saying too many companies make false or unproven claims about their own packaging.

Another major trend to note in 2011 is the increased consumption of flexible packaging. For this industry, “[g]rowth will be attributable to cost, performance and source reduction advantages over most rigid packaging formats,” design firm Leibold explains. “Stand-up pouches will lead the growth.”

According to Flexible Packaging Magazine, the flexible packaging industry constitutes approximately 18 percent of the overall packaging market, with $26.4 billion in annual sales in 2009. The “value-added” segment of the industry, which involves multiple processes on flexible materials, is estimated to produce $20.3 billion in annual sales revenue.

Flexible packaging can also play an important role in cutting down costs, which will remain a priority among many packaging firms in 2011. A survey from the Packaging Machinery Manufacturers Institute (PMMI) earlier this year found that 41 percent of manufacturers are implementing lighter-weight flexible packaging as a cost-saving strategy.

The food industry is likely to be the largest driver of flexible packaging growth for the near future. According to the PMMI findings, 53 percent of companies in the food industry are increasing their usage of flexible packaging, particularly the stand-up pouch.

“With a pouch, you have a package where the brand is always facing the consumer head-on creating an eye-catching billboard effect. Also, unlike cans and bottles, pouches don’t require additional labeling, as it’s all on one printed piece of film,” Leibold explains in a separate report. “As manufacturers and consumers become more cost conscious and as films and equipment improve, flexible packaging will further replace rigid packaging.”

In terms of design trends, packaging is more often relying on innovative methods to create an interactive experience for consumers. These new forms of packaging, which typically incorporate electronics, can significantly improve branding and intersect with broader technological trends to provide a more in-depth look at a company’s product line.

“There are now technologies like ScanLife, Augmented Reality and others that finally give the brand and consumer the chance to be interactive either in store or at home with smart appliances,” according to the Greener Package blog. “Additional content, coupons, promotions or unique experiences can be sent directly to the consumer and tailored directly to their individual needs and concerns right from the packaging.”

Food-and-beverage market research firm Innova Database forecasts the global interactive-packaging market will grow to $4.8 billion in 2011 and reach $14.1 billion in 2013. Active packaging, which involves the ability to sense or measure attributes of the product enclosed, is expected to grow to a market size of $6.4 billion by 2013.

“Packaging has finally truly become interactive,” Greener Package continues. “As a packaging designer or supplier, the time is now to shift our focus from just the best structure and graphic design for the product to how can we achieve those things and create an interactive experience between the consumer and the brand.”

Of course, economic considerations, such as keeping operational costs low and building stronger relationships with the customer base to maintain sales, are still priorities for many packaging firms and are likely to remain so in the coming year.

“The biggest risk, especially in the midst of a challenging economy, is to ignore total cost of ownership,” Earl Trout, the director of marketing at MWV Beauty & Personal Care, told GCI Magazine. “Supply chain, logistics support, flexibility, time-to-market, consumer confidence and satisfaction — these are difficult to measure but can often impact packaging cost and market success.”

Earlier

Pack Trends for a New Year

Beware of Greenwashing: Avoid Eco-Hype

Resources

Sustainable Packaging Market to Reach $170 Billion Worldwide by 2014
Pike Research, Jan. 4, 2010

2010 Sustainability in Packaging Study: A Deeper Shade of Green
by John Kalkowski
Packaging Digest, Oct. 27, 2010

Mintel Reveals Consumer Packaged Goods Trends for 2011
Mintel, November 2010

Top 10 Tends in Packaging for 2011
Leibold, 2010

FPA Releases 2010 State of the Flexible Packaging Industry Report
Flexible Packaging Magazine, July 23, 2010

Flexible Packaging Market Research Study 2010
Packaging Machinery Manufacturers Institute, January 2010

The Future of Packaging in Flexible
Leibold, October 2010

Interactive Packaging?
by David Padula
Greener Package, July 23, 2010

Interactive Packaging
Innova Database, May 2009

State of Packaging 2010
by Jeff Falk
GCI Magazine, Aug. 31, 2010