Market Trends of Food Service Packaging Industry
Quick Service Restaurants (QSR) Are Expected to Hold the Largest Share
- Global consumers are increasingly turning to fast food, with a surge in offerings from global giants like KFC, Domino's, and Starbucks, as well as regional players. This trend is fueled by the growing penchant for dining out, a melding of cross-cultural dietary tastes, and fast food's convenience in fast-paced lives. The QSR segment’s growth is bolstered by the diverse culinary options offered by international brands. Shifting population demographics and a growing health consciousness among millennials and baby boomers are amplifying the demand for food products that prioritize wellness.
- QSRs specialize in affordable, fast food and prioritize service efficiency. They stand out from traditional dining establishments by offering minimal table service and a strong focus on self-service. Commonly, QSRs utilize single-use plastic products such as rigid polystyrene (PS), expanded polystyrene (EPS), polypropylene (PP), polyethylene terephthalate (PET), and polylactic acid (PLA).
- During the lockdowns, many cafes and restaurants pivoted to emphasize curbside pickup and carryout exclusively. Others slashed their in-store capacities, introducing innovative delivery services to meet the demand for food delivery. As a result, the food and beverage industry is poised to generate increased demand for foodservice packaging. This can be largely attributed to the heightened emphasis on hygiene and sustainability, propelling paper to the forefront as a preferred packaging material.
- Amidst the prevalence of styrofoam cups, plastic lids, and inorganic meat, the industry is increasingly pivoting toward eco-friendliness. Driven by a rising customer preference for sustainable practices, numerous companies are embracing greener alternatives. Arcos Dorados Holdings, an independent McDonald’s franchisee, adopted J&J Green Paper’s 'all-natural' barrier coating in June 2024. This move aimed to eliminate plastics and PFAS chemicals and reduce consumer waste, marking a significant step in the fast food industry’s sustainability efforts.
- The rising trend of on-the-go dining and heightened food expenditures have bolstered the QSR segment, consequently driving up the demand for foodservice packaging. As per Yum! Brands’ February 2024 report, the global count of KFC outlets surged from approximately 25,000 in 2020 to a staggering 29,900 by 2023. This global uptick in QSR establishments is poised to further escalate the need for foodservice packaging in the coming years.
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Asia-Pacific Accounts for the Largest Market Share
- Asia-Pacific comprises densely populated countries and emerging economies like China and India. The demand for foodservice is growing rapidly, and the adoption of sustainable packaging is gaining momentum; it is expected to increase further during the forecast period.
- Plastic is an essential part of the packaging industry that forms the foundation of the consumer convenience culture. Owing to their cost-to-performance ratio, traditional packaging materials, such as corrugated paper boards, glass, and metals, have been substituted by plastics in foodservice.
- CHUK, a compostable foodservice brand, joined quick commerce firm Blinkit as its sustainability partner. Blinkit delivers CHUK's products to consumers within 10 minutes, bridging the gap between the consumers and CHUK. The partnership helped CHUK to serve one crore pieces to consumers on the platform FY 2022-23.
- Japan has a high per capita consumption of packaging materials, and there is a close relationship between the food and packaging industries in the country. Japanese food manufacturers are known for using high-tech packaging techniques and their tendency toward ingenuity in packaging designs. This focus on packaging innovation has led to the development of attractive and efficient packaging solutions in Japan.
- There has been strong growth of FSRs in India during the past years due to the rise in the consumption of different varieties of Asian cuisine, including Chinese, Indian, Japanese, and Pan-Asian. Indian cuisine is significantly influenced by East Asian culture and is particularly popular among the younger generation.
- As per the Speciality Restaurants report, in FY 2023, there were about 127 outlets of Speciality Restaurants Limited in India, up from 117 stores two years prior. This uptrend is also expected to be witnessed in the upcoming years, thereby bolstering the demand for foodservice packaging products.
- According to industry insiders, foodservice packaging manufacturers are gravitating toward flexible packaging as it is visually appealing, cost-effective, and long-lasting. According to the India Brand Equity Foundation (IBEF), the Indian food and grocery market is the sixth-largest globally, with retail accounting for 70% of sales. The Indian food processing industry accounted for 32% of the country's overall food market, ranking sixth in production, consumption, export, and expected growth.
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