Market Trends of Sugar Packaging Industry
Plastic Material to Hold Significant Market Share
- According to Nichrome Packaging Solutions, plastic packaging holds a significant market share due to its unparalleled functionality. Among plastic solutions, flexible plastic packaging is notable for using 70% less raw material than its rigid counterpart.
- As reported by Feedback Organization in April 2023, supermarkets dominate the UK market as primary sugar sellers. While these retailers once claimed to merely respond to consumer demand, they've since abandoned this stance. Research has consistently spotlighted the 'retailer power' of supermarkets. Acting as intermediaries, they bridge food producers and consumers. Their dominance restricts both suppliers and customers, curtailing choices in buying and selling food. This influence is evident as just five supermarkets control over 75% of the retail market share. Leveraging their 'buyer power', supermarkets dictate terms to suppliers, influencing stock selection, quality, quantity, packaging, and pricing decisions. This dynamic holds even for industry giants like Procter & Gamble, Nestlé, and Unilever. With supermarkets bolstering sugar sales, they're simultaneously driving up demand for sugar packaging, especially in flexible formats like pouches and sachets. The growth of quick-service restaurants and coffee shops has further amplified the demand for sugar sachets.
- There's a growing trend of packaging sugar in flexible plastic bags, favored by sugar manufacturers for their moisture resistance, cost-effectiveness, and branding potential through color or transparency.
- Despite this, market players are gravitating towards alternatives to plastic packaging. The rising adoption of bioplastics poses a significant challenge to traditional plastic packaging in the industry. Over the forecast period, recyclable and renewable materials are poised to potentially replace plastic packaging.
- Logistex Ltd. highlights a rebound in Brazilian sugar exports via containers in 2023, after a two-year lull, influenced by the "containergeddon" movement. This increase in shipments coincided with a rise in Brazil's sugar production and a decline in seafreight rates. Additionally, challenges faced by other major global sugar producers further cemented Brazil's market leadership.
- Conversely, India faced harvest challenges and was hesitant to re-enter the sugar export market, especially with its shift towards ethanol production. This opened the door for Brazil to assert its dominance. While national producers favored bulk shipping, container shipments remained vital for exports, often involving intricate negotiations and higher value additions.
- In 2023, Brazil's containerized sugar exports reached 2.94 million tons, as noted by maritime agency Williams. This constituted 9.4% of Brazil's total exports and marked a remarkable 90.1% increase from previous years. The figure was on the verge of matching the 2017 peak of 2.98 million tons, which represented 10.7% of total shipments. Before container loading, these sugars are typically packaged in flexible bags or sacks made from woven natural materials like jute or woven plastic, frequently featuring a plastic inner lining.
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Asia-Pacific to Witness Highest Growth
- The Asia-Pacific region leads in growth, driven by notable innovations in food packaging and branding. Additionally, consumers in this region place a high value on the indulgent experience of sugar confectionery.
- Rising population, increasing income levels, evolving lifestyles, heightened media influence, and a robust economy are fueling the demand for packaging. This sector stands out as one of the most vital and rapidly expanding in the region. Notably, Care Ratings, a leading credit rating agency in India, highlights that over 49% of the country's paper production is dedicated to packaging.
- Several regulations oversee the packaging industry in the Asia-Pacific, particularly in the food and beverage sectors. Key regulations include the Prevention of Food Adulteration Act of 1956, the Plastic Waste (Management and Handling) Rules of 2011, and the Food Safety and Standards (Packaging and Labelling) Regulations of 2011.
- Anticipated regulations on paper and pulp usage in the food sector are poised to boost the market. For example, India's Food Safety and Standards Authority has rolled out new packaging regulations, aiming to bolster paper's role in food packaging. Furthermore, the BIS standard IS 4664: 1986, which allows recycled pulp in food packaging, is set to enhance paper's prominence in India's sugar packaging.
- As per the USDA Foreign Agricultural Service, India produced around 34 million metric tons of sugar in the 2023/2024 cycle. While sugar production in India has seen its ups and downs over the years, the nation proudly stands as the world's second-largest sugar producer, trailing only Brazil. In the 2023-2024 cycle, India's Cabinet Committee on Economic Affairs (CCEA) approved new norms emphasizing jute packaging. Specifically, the 2023-24 Jute Year norms mandate that jute bags must be used for 100% of food grains and 20% of sugar packaging.
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