There will be steady increases in demand for liquid paperboard materials across the next five years according to the latest in-depth industry study from Smithers Pira.
Exclusive data published in The Future of Liquid Paperboard to 2022 [http://www.smitherspira.com/industry-market-reports/packaging/paper-and-board/the-future-of-liquid-paperboard-to-2022] shows production of liquid packaging board (LPB) and food or cupstock (FCS) boards combined passed the seven million tonne mark in 2015. This has grown by over three per cent annually on average since 2012. Reaching 7.2m tonnes in 2016, this segment of the packaging market was worth $9.5bn to the paper mills.
Through to 2022, demand for LPB will accelerate significantly at 4.5 per cent per year, driving a total market value of $4.69bn in 2017, to reach $5.83bn in 2022. The Smithers study segments this market and provides extensive value and volume figures by board type, end-use application, regional geographic and key national markets.
Production of liquid paperboard materials is highly concentrated, especially liquid packaging board, which is produced in only ten countries around the world. Consumption of converted board products is spread across all global regions; however, in contrast to some other packaging segments, three-quarters of all converted LPB is still used in the Americas and Europe, with Asia holding only a moderate 17 per cent market share in 2016.
Demand for liquid paperboard is heavily dependent on a few segments, although there is scope to expand into new areas. In 2016, more than 70 per cent of LPB consumption occurred in the dairy industry, with juice packaging accounting for a further 20 per cent plus.
Stephen Harrod, author of the report, says: “Consumption of dairy products has slowed in Western Europe but Eastern Europe has enjoyed rapid growth in demand, sustaining volume demand for liquid paperboard. Globally, however, the industry is seeing growing competition from ‘alt-milk’ products, such as nut-based ‘milks’. However, these products may actually stimulate demand for LPB, as they open up new niche markets. LPB consumption will be maintained over the medium term, assisted by the healthy eating trend, together with growing consumption patterns in the emerging markets.’
In spite of increasing competition from other alternative beverages, including ready-to-drink (RTD) tea and coffee, energy drinks and the like – especially amongst younger consumers – demand for LPB in the dairy industry will see continued good growth, with nearly 400,000 tonnes of additional LPB materials needed to meet demand growth between 2017 and 2022.
An overall trend across the packaging industry is to minimise the environmental impact of packaging, which is stimulating both technical innovations and new business models across the value chain. This interest includes consumers, brand owners, converters and regulators and spans a number of different means to realise the goal of furthering the use of sustainable, recyclable and compostable packaging into the mainstream.
Marketing to more environmentally aware consumers will increasingly be an important differentiator for packaging suppliers and FMCG brand owners in the future. This is driving the development of more sustainable LBP products such as Tetra Pak’s Tetra Rex Bio-based, Tetra Brik Aseptic 1000 Edge with Bio-based LightCap 30, and the Tetra Top carton bottle, as well as the Combidome low-acid carton bottle from SIG Combibloc and Elopak’s Pure-Pak Sense Aseptic carton.