Not only is packaging holding its own in the face of general decline – the European printing market was valued at €169.1bn in 2011 – but it is continuing to show growth, particularly sectors such as corrugated board packaging, which Smithers Pira anticipates will be worth $269bn globally by 2021.
Smithers Pira print consultant Sean Smyth says packaging’s success can be attributed to “growing populations and smaller households, more varieties of products in supply chains, and no electronic alternatives from the physical properties protecting and promoting the contents”.
Dick Searle, chief executive of the Packaging Federation, adds: “Packaging continues to be stable or rising because people continue to buy things. Another reason is that pack sizes are generally getting smaller so the proportion of printing per tonne of packaging will increase.
“Packaging has always been a resilient industry in terms of volumes and during recessions packaging volumes tend to increase because people buy more packaged food instead of fresh food, because it’s cheaper.”
One significant opportunity for packaging is the growth of digital technology. Though it has taken longer to blossom in this sector than others, digitally printed packaging is already being used successfully by a number of major brands, as well as smaller entities such as craft breweries, for personalised and customised campaigns, limited editions, short runs and prototyping.
But while digital is increasingly popular among producers of labels and flexible packaging, in other segments it remains in its infancy.
BPIF Cartons general manager Neal Whipp says: “I think digital will inevitably grow, and certainly there have been developments in the technology which have made it more suitable for more applications, year-on-year.
“But until the sheet size and speed, and therefore the cost of manufacture, is on a par with offset then digital is always going to be a small minority of cartons manufactured.”
Searle adds: “I struggle to see how digital printing is going to become competitive for the usual sort of run lengths that we encounter for the bog-standard products. But I do think it has created some very interesting opportunities for marketing, not just for personalisation but it’s also a natural fit for things like special promotions.”
Despite its success, the packaging sector nevertheless faces its own challenges as well as some of those faced by the rest of the print industry, such as the ongoing economic uncertainty. This combined with continued demand from consumers for more sustainable and recycled packaging comes at a cost to UK firms.
“The carton industry is clearly potentially affected because of the exchange rate. With no recycled board being manufactured here at all, the UK is now the largest importer of paper products in the world,” says Whipp.
Packaging also faces more legislation and regulation than most print sectors. One of the biggest recent shake-ups was last year’s implementation of ‘plain’ cigarette packaging in the UK.
All cigarette packs must now be standardised in a dull green colour and covered in graphic health warnings and they may not feature company logos. As an effect of this, there is now no cigarette packaging of any kind being printed in the UK, with the last remaining manufacturers – Amcor in Bristol and MPS in Bradford – closing last year.
The HMRC has revealed that it recovered over €23.4m worth of counterfeit cigarettes in 2016 – equivalent to 44 million cigarettes – and there is now concern that the figure could rise this year due to the plain packaging implementation.
“Cigarette packaging is actually enormously complex,” says Mike Ridgway, director of the Consumer Packaging Manufacturers Alliance (CPMA).
“It is traditionally gravure printed on big equipment at high speed, which enables the graphics to have enhancements such as a matt varnish, inline hot foil stamping or embossing all in one go. You also have the box-making characteristics which is also complex with all of the different creases, folds and scores.”
He adds: “Making packaging complex is a barrier for anybody attempting to copy it and if you take complexity out of the specification then you are opening it up for other people to copy. The standardised packs can be printed on simple litho or even digital equipment.”
Ridgway also believes the ruling on cigarettes could also spell future trouble for other forms of packaging.
“My main concern is that this is the start of a slippery slope. There are already calls in parliament from MPs and from Public Health England wanting to introduce plain packaging for alcohol or labels for alcoholic products.
“Things like confectionery and snack foods could also come under attack because these people attacking tobacco have, in their minds, won that battle and are now looking for something else to have a go at.”
But Searle disagrees that this outcome is likely: “Cigarettes was a different issue; legislation against cigarettes had been building for years and there was nothing, in essence, surprising about that ruling considering the health issues and so on. But I just don’t see it happening with alcohol, we move in a market economy.”
All things considered, though, the packaging sector is in fine shape and has a healthier outlook than areas such as publication print and graphics print, both of which will continue to decline over the next five years, according to Smithers Pira.
Whipp concludes: “As long as there are products there is a need for packaging to protect them down the supply chain and there always will be.”
