Market Trends of Russia Pouch Packaging Industry
Convenience and Lightweight Packaging Driving Growth
- Pouch packaging's affordability, lightweight nature, print adaptability, and ability to take on diverse shapes propel its adoption. Critical drivers for its uptake include the convenience offered. The surge in demand for premium, flexible packaging across industries can be attributed to its rising popularity in food and other sectors.
- According to International Supermarket News, in May 2024, Russian supermarkets witnessed a notable growth phase, with an annual turnover increase of up to 14%. This upswing is fueled by several factors, such as escalating consumer expenditures, strategic mergers and acquisitions, and the broadening footprint of brick-and-mortar and e-commerce platforms. The rise in the number of supermarkets and their growth are anticipated to leverage the need for pouch packaging.
- Over the last few years, the Russian retail sector has transitioned from independent stores to chain structures. This shift is driven by the advantages of chain organization, including a unified procurement policy, economies of scale, advanced logistics, proprietary distribution centers, and enhanced brand recognition. Yet, the growing dominance of retail chains raises concerns about market space and competition. According to the Russian Federal State Statistics Service, retail trade revenue in Russia in 2020 was RUB 33.56 trillion (USD 0.39 trillion), and it reached RUB 47.4 trillion (USD 0.55 trillion) in 2023.
- The packaging industry is undergoing significant shifts, with a pronounced focus on enhancing brand experiences. Concurrently, the rising demand for convenience stands out as a primary catalyst for these changes. There is a notable surge in the adoption of flexible packaging, particularly pouches. This preference is driven by the convenience they offer to consumers and manufacturers. As a result, flexible packaging is increasingly acknowledged as a pivotal tool in fostering brand loyalty.
- Urbanization trends are amplifying the emphasis on convenience and sustainability in packaging. According to the Russian Federal State Statistics Service, in 2023, Russia’s urban population was 109.7 million. A broader industry shift from rigid to flexible packaging is evident, driven by the desire for convenience and response to evolving lifestyles, especially with the rise of smaller households and the ensuing demand for single-serve options.
Understand The Key Trends Shaping This Market
Download PDF
Food Industry to Witness Robust Growth
- Food production and processing play a pivotal role in Russia's economy. The food market stands out as one of the nation's lucrative sectors, consistently ranking among the top globally. Over the past years, grocery sales in Russia have steadily risen, with online food retail emerging as a critical revenue driver.
- Furthermore, the evolving lifestyles in the region fuel a heightened appetite for ready-to-eat foods. This demand is peaking, driven by an increasingly time-strapped workforce and a Gen-Z cohort that values convenience. To meet these demands, manufacturers are integrating cutting-edge technologies into pouch packaging, enhancing barrier capabilities against moisture and oxygen. Such advancements are crucial, especially in ready-to-eat foods, where product integrity and extended shelf life are paramount.
- Over the past five years, Russia has significantly bolstered its plastic production capabilities, with the sector witnessing a remarkable 62% growth from its previous size. Data indicates that approximately 15% of Russia's industrial output comprises plastic-based products, spanning food and other industries. This surge in plastic production may fuel the demand for pouch packaging.
- The surge in retail packaging demand, primarily catalyzed by the COVID-19 health crisis, is noteworthy. With more individuals turning to online platforms for their daily essentials and fresh food, the need for robust packaging solutions has increased. The Russian government has urged the food industry to scale production to avert shortages and ensure a steady supply, further strengthening the need for pouch packaging.
- According to the Federal Customs Service of Russia, the confectionery food exports to Russia were valued at USD 1,947 million in 2022, reaching USD 2,042 million in 2023. Similarly, the meat and sub-products segment's export value was USD 2,150 million in 2023, which increased from USD 1,700 million in 2022. Such a rise is expected to push the demand for the pouch packaging market in the country.
