Total value for printed packaging and labels will reach $431.6 billion in 2020 according to the latest exclusive data from Smithers.

Covid-19 and the global lockdown has affected printed packaging volumes, but to a much lesser extent than publications or graphics work. While packaging print market growth will be limited this year it will continue to expand at a compound annual growth rate (CAGR) of 2.6% and reach $491.1 billion in 2025 according to research for the new study – The Future of Package Printing to 2025.

Packaging became the most lucrative print segment in the 2010s and hence an area of increasing focus for OEMs, consumables, and substrate suppliers. Within this cartonboard and corrugated are the two largest segments, representing 24.9% and 30.1% of the market by value in 2020.

In the short term these two formats will benefit from Covid-19 and shifts in packaging demand, while in the medium term other trends, such as sustainability goals will foster further growth and innovation.

Covid-19

The imposition of lockdown (shelter in place) rules in H1 2020, caused a boom in demand for packaged goods. Shoppers stayed at home and stockpiled many essentials, food in particular, leading to a peak in demand for printed folding cartons. One consequence of this, in the short term, was that run lengths of mainstream core products increased.

While essential shops stayed open, others were closed and consumers were concerned over infection risks. This led to a surge in online ordering and demand for corrugated e-commerce delivery packaging.
Data from Adobe Analytics shows that in April and May 2020, US consumers spent $152.5 billion via e-commerce. For May alone it represented a 77% rise on the same month in 2019. While some trade will return to physical channels, much of the switch will be permanent and has accelerated the wider trend from brick and mortar retailing towards online. 

E-commerce

More e-commerce selling is creating new revenue for corrugated suppliers, as well as microflute cartonboard formats. And for use of digital technologies to provide value-adding additions via on pack printing.

Many converters are now offering bespoke e-commerce shipment boxes. These are designed to fit through standard dimension letterboxes, and often contrast muted exterior markings with brighter brand graphics and colours on the interior.

Corrugated companies are also developing box-on-demand systems for e-commerce shippers, with rightsized packs printed and formed after an order is received. Printing can take place in the distribution hub and may contain additional promotional messages targeted at the specific customer. These kinds of workflows will increase demand for inkjet-printed corrugated.

Corrugated

Global corrugated print output has grown from $114.5 billion in 2015 to $129.8 billion in 2020. This growth has been underpinned by the increasing use of printed corrugated in retail-ready packaging, as well as in e-commerce.

Flexo is by far the most widely used process for printing corrugated. In 2020 it accounts for 73.8% of the value of corrugated print output, and 79.6% of all output by volume. Offset litho printing is used in preprint, as well as sheetfed litho-lam. Inkjet is the fastest growing print technology, and several OEMs have built high-speed single-pass inkjet machines for both preprint and postprint, capitalising on the demand for shorter print runs and pack customisation.

In the medium term an increasingly important aspect of corrugated is that it is seen as comparatively sustainable. It can be readily recycled; uses a high proportion of recycled content, where virgin fibre is needed it can be sourced from FSC or PEFC certified forests; and corrugated itself is biodegradable.

The development of a wider range of functional and barrier coatings for corrugated is extending its use – with coatings to impart protection against water, oil and grease while not compromising the recyclability of the final pack.

Folding cartons

Like the corrugated sector, cartons are derived from renewable resources and can be readily recycled, so the sector is benefitting from the increasing focus on sustainability. Printed cartonboard is being used to replace plastic in some packaging applications – such as plastic shrink wrap for beverage multipacks, and plastic trays in food packaging.

The development of new barrier coatings and new uses of film technology is opening opportunities to use printed cartons in different ways. One example is the 2020 introduction by Unilever Finland of Ingman ice cream in a 1-litre carton made using Stora Enso’s FSC-certified cartonboard with a plant-derived polyethylene coating.
Sheetfed litho is the dominant print process used on cartons it accounts for 74.7% of the total value in 2020. Gravure and flexo are the next largest print processes. Digital print for cartons has grown from $0.43 billion in 2015 to $1.96 billion in 2020. Digital print is forecast to reach $3.67 billion in 2025, a 2020–2025 CAGR of 13.3%.

There are a number of OEMs supplying B2 and now B1 format digital presses. These include the B2 sheetfed liquid toner HP Indigo 30000, now joined by a new B1 roll-to-sheet Indigo 90K. Other B2 presses, such as the Fujifilm Jet Press 750S and Konica Minolta KM-1, are used for small-format folding cartons, and other commercial print and graphics applications. Landa has the B1 S10 indirect press that can be used for cartons. Heidelberg also built the B1-sized Primefire 106, but in March 2020 it announced that the product was to be discontinued, due to lack of interest.

Industry impact

As in other industries companies in the print and packaging supply chain are responding to the coronavirus crisis by focusing on liquidity as they prepare to face a severe economic recession of unknown depth and duration. This has led to a freeze on new hires, reduced capital expenditure, and suspension of dividend payments and share buy-back programmes.

There are notable exceptions to this, such as Amazon, which has been recruiting significantly; and UK supermarket chain Tesco hiring 16,000 new workers to join its e-commerce home delivery business.

For print OEMs, the first half of 2020 has been difficult. The introduction of shutdowns and safe working practices in manufacturing facilities has limited production capacity. Major trade shows, such as Drupa 2020, have been postponed or cancelled. These are normally key events for showcasing new technologies and developing sales leads. Several OEMs are launching new products via webinars and ‘virtual trade shows’ instead.

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