An overview of why the Corrugated Box Market is changing.

The corrugated packaging market is proliferating, aided by the rapid growth of e-commerce and innovative in digital printing technology

The corrugated packaging market is expanding faster than ever, over against predictions that forecast a slowdown. The expected downturn in demand in China including the banning of contaminated recycled paper stocks has not materialised. While there are many factors that influence this, below are a number that are having a profound effect on the industry.

E-commerce

E-commerce retail sales are continuing to increase, with estimates of circa 20% annual growth in e-commerce trade in Europe.

Global online sales look to be over $5.5 trillion in 2023 with a marked impact on packaging demand in the corrugated industry representing 80% of the e-commerce market.

The complex direct-to-consumer delivery logistics chain for– e-commerce where packages are expected to be handled 20 times in standard distribution – means there is now demand for cost-effective transit corrugated board packaging. The converting industry is now feeling demand from brand owners with many brands now needing the outer carton to carry their image into the home, not just the retail outlet. The result of this is an increased need for converters to produce high-quality graphic designs on the shipping cartons.

Fit-to-product (#rightsizebox)

As a result of growth in e-commerce, fit-to-product (FtP) or box-on-demand systems, driven by the needs of dedicated e-commerce sellers such as Amazon have seen a growth in popularity. This technology enables the customer to produce customised transit packaging based on the exact dimension of the product packed. Eliminating the need for large inventories of standard-sized boxes and the copious amounts of void fill for the end-user.

As box -on-demand systems become more prevalent, there will be more demand for a fanfold board, finishing equipment, such as printers and sealing equipment that can operate with them.

Sustainability

With the current spotlight on plastic use, Corrugated board is proving a popular substitute. As sustainability becomes a more critical issue across the industry its benefits are simple – ease of recycling, and a pulp and paper industry that is skilled at converting these into the next generation of paper. As a result, there has been a rise in the usage of corrugated protective formats over against polymer based alternatives, such as expanded polystyrene (EPS) foams.

While the lightweighting of board has long been a practice in the industry, right-weighting, and right-sizing are playing an increasingly important role in response to demand for efficient packaging and the logistics chain’s adoption of dimensional weight (DIM) pricing. Sometimes changing to a more substantial paper grade can have an overall beneficial impact allowing for the elimination of additional protective elements,

The need to minimise the volume of air shipped in all delivery channels means that in some instances there are significant cost increases of legacy product formats (An example, of a 32-pack of toilet rolls that costs an estimated 37% more to ship when charged based on volume, rather than weight.

Lightweighting has been most successful in Western Europe, where box weights are optimised to about 80% of US weights. The importance of this process will continue to be experienced over the next few years as retailers focus on saving costs as well as delivering an appealing product to end users.

Retail changes

Retail-ready packaging has established itself as a significant cost saver for retailers, especially in Western Europe. This continuous profit pressure is providing an impetus to use more retail-ready formats as a labour-saving solution, with that these transit packaging formats reduce shelf restocking and handling costs by up to 50%. They are popular with sales into convenience stores or discount retailers such as Aldi and Walmart/ASDA. For the Brand, it gives greater control over the presentation of the product in retail real estate.

The expansion of e-commerce in the grocery sector may have some impact on retail-ready packaging used as online sales requires different pack forms.

Corrugated cases will always be used to ship goods to the online warehouse or fulfilment centre, but not necessarily in retail-ready format. Subscription box and meal kits – offering a direct-to-consumer supply of specialist food using a regular subscription – are providing new opportunities for manufacturers with delivery-friendly sizing, on-pack branding and protected product within a die-cut interior.

Digital printing advancements #brandabox

As the digital print market matures, the corrugated sector, while still in its infancy, has developed a growing appetite for the adoption of the process, and systems are now being designed to meet the demands of the higher-volume liner or post-print industry.

With shorter run-lengths, savings in set-up and the ability to personalise around the brand, region, store or individual combined with the level of quality available using the latest technology creates a ‘perfect storm’ of favourable opportunity for manufacturers.

Brand owners have recognised the opportunities to grow brand loyalty with greater engagement with their customer base provided by these technological developments, and industry leaders see packaging as an essential element in the creation of a memorable #unboxing experience that users will share via social media, thus driving marketing penetration, encouraging repeat business and attracting new customers.

From time to time, I am minded to share some of the experiences we have gained in contract packaging and packaging materials over the last quarter of a century, and on three different continents! The topics will cover best practises for packaging (in the Transit Packaging field) and also proven tips that can be implemented in any operational area or Owner Managed Business. Hyperlinks to other resources on the topic covered would be most welcome in the comments section below, that way we all keep learning.

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