Market Trends of Egypt Plastic Packaging Industry
Growing Demand for Flexible and Oxo-degradable Plastics
- The increasingly urbanized and fast-paced lifestyles of consumers are fueling the demand for flexible packaging. Compared to traditional alternatives, flexible plastic packaging consumes less resources and energy and boasts a 35% space-saving advantage on retail shelves, translating to significant cost savings.
- Dynamic shifts in the industry, notably spurred by new regulations, have accelerated the innovation of unique packaging solutions. Heightened awareness around biodegradable polymers and their environmental impact is compelling manufacturers to pivot toward safer, eco-friendly alternatives, like oxo-degradable plastics. With a focus on sustainability, manufacturers are gravitating toward packaging solutions that are resource-efficient, cost-effective in transportation, and offer extended shelf lives. This strategic shift not only alleviates cost pressures but also ensures the integrity of the packaged products.
- Over the past few years, Egypt witnessed a notable shift in its distribution channels, with retailers expanding their presence. This transition has seen a shift from traditional grocery merchants and open markets toward a preference for supermarkets and hypermarkets.
- Furthermore, as food and agricultural exports surge, the government is strategically positioning itself to harness the potential benefits for the agriculture sector. Egypt's Minister of Planning and Economic Development has outlined ambitious targets, which include elevating the agriculture sector's GDP contribution to 12% by 2024, alongside a parallel goal of boosting agricultural production by 30% within the same timeframe.
- The Chemical and Fertilisers Export Council's report highlighted that in 2023, Egypt's plastic product exports hit USD 1.75 billion, accounting for 27% of its chemical and fertilizers exports. According to the International Monetary Fund, Egypt's GDP per capita is expected to rise from USD 3,727.66 in 2023 to an estimated USD 4,534.36 by 2029. This rise in GDP per capita is poised to bolster the nation's standard of living, income levels, and infrastructure, thereby propelling the demand for plastic packaging.
Understand The Key Trends Shaping This Market
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Food is Expected to Hold a Significant Market Share
- Plastic packaging's appeal lies in its lightweight nature and cost-effectiveness. These attributes have fueled the rising popularity of both rigid and flexible plastic packaging in the food industry, leading to a notable shift from traditional paperboard, metal, and glass alternatives. Flexible packaging, favored for its versatility, finds its primary applications in frozen foods, dairy items, snacks, and confectioneries. In contrast, the nation predominantly employs flexible packaging for meat, poultry, and fresh produce, a trend bolstered by advancements like controlled environments and high-pressure processing.
- In Egypt, frozen food products primarily flow through convenience stores and hypermarkets/supermarkets. Recent advancements in the country's frozen food market involve bolstering the cold chain infrastructure to enhance product safety and quality. This effort includes the establishment of new cold storage facilities and warehouses. These investments are a response to Egypt's growing population and the resulting strain on the food supply.
- The Egyptian Chamber of Food Industries reports over 7,000 active food manufacturing companies in Egypt. The industry's growth is primarily fueled by the nation's expanding population, which increases by approximately 2.3% to 2.5% annually. Egyptians allocate more than 30% of their income toward food expenses.
- According to the Hindawi report, Egypt's population, which exceeded 100 million in 2021, is anticipated to climb to 123 million by 2030. The country's population growth, while nearly linear, accelerates as the base number grows. This surge in population is set to compound Egypt's existing food supply challenges, thereby heightening the demand for frozen food, prized for its extended shelf life.
- As per Egypt's Central Agency for Public Mobilization and Statistics (CAPMAS), the inflation rate for food and non-alcoholic beverages in Egypt spiked to 14.8% in February 2023, up from 4.8% in November 2022. This surge was primarily driven by escalating prices in both core food and non-food items. Notably, the food inflation rate in Egypt witnessed a sharp rise, largely attributed to the fallout from the Russia-Ukraine War, particularly impacting wheat prices.
