Recent Study: Ease of Application in Retail and E-Commerce Drives Growth of the Corrugated Boxes Market

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FMI
FMI

Corrugated boxes is widely seen as one of the primary segments of the global paperboard packaging market. These containers are made of high performance materials that make the processes of packing, promoting and safeguarding contents easier. Corrugated board is a flexible medium that allows the production of boxes to be done in multiple shapes and sizes.

Corrugated boxes can be made from single wall, double wall, triple wall and single faced corrugated board. Of these single walled boxes are most widely preferred, owing to light weight characteristics and simultaneous protection for contents during transport.

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The growing demand for corrugated boxes in a wide variety of end use sectors such as food packaging, electrical and electronics, and e-commerce sectors, are widely considered to have a key impact in the sustained demand for the global corrugated boxes market. The market’s growth is also driven by the following:

  1. Corrugated boxes can be made either from virgin or recycled fiber. Among these, recycled fiber is anticipated to witness a greater rate of growth, attributable to the growing awareness about environment conservation and the rising presence of recycling facilities around the globe. Further, corrugated boxes will play roles either as primary or secondary packaging.
  2. The wide range of end use applications for corrugated boxes can include food, beverages, health care, tobacco, personal care, cosmetics, e-commerce, fertilizers, and consumables. While food and beverage packaging is anticipated to hold control over major market share, the cosmetics and e-commerce industries are expected to display a relatively higher rate of growth in the near future.
  3. The rising activity in the e-commerce sector and the consequent rise in consumer preference for shopping online are projected to have a significant impact on the growth of the corrugated boxes market. This will result in the dominance of the Asia Pacific Excluding Japan region, followed by North America and Europe.
  4. Corrugated boxes are also multipurpose, which makes them suitable for transport, retail, and display packaging and minimizes damage to contents during transit, boosting adoption rates in the global corrugated boxes market.

Nearly 170 million tons of corrugated boxes were sold in 2018, equaling a market value worth US$ 112 billion. A new study by FMI estimates that the corrugated boxes market will grow at a 3.9% y-o-y in 2019. Key market influencing factors include,

  • Increased demand for bulk packaging solutions
  • Higher recyclability of corrugated boxes
  • Fluctuations in kraft paper cost and increasing gap in the supply-demand scenario

While paper and pulp markets have witnessed a significant decline in the five years, increasing demand for paperboard packaging is said to balance the decline. However, manufacturers are likely to face challenges in the form of increasing popularity of plastic packaging as compared to that of fiber-based packaging solutions. Amid this, the corrugated boxes market is projected to generate revenues worth over US$ 116 billion in 2019 with sales of 176 million tons,” says FMI.

Paperboard packaging companies are realigning their business focus by introducing a broader portfolio to efficiently address customer value proposition. As forest-based paper and pulp industry is undergoing a dramatic transition, commercial interphase of companies offering corrugated boxes is likely to change in terms of creation of value over maintaining sales volume.

Demand for Recycled Corrugated Boxes Continues to Surge

The FMI study finds that nearly 80% of the corrugated boxes sold in 2018 were made from recycled material. Demand for recycled corrugated boxes is estimated to grow annually at 4.4% in 2019, with the status-quo likely to continue throughout the forecast period.

Recyclability continues to be a focus area for both manufacturers and end-users. Sensing the changing preferences, manufacturers are adopting sustainable raw materials in the manufacture of corrugated boxes.

Single Wall Board Accounted for 7 in 10 Corrugated Box Sales in 2018

Corrugated boxes find extensive application in storage, packaging, shipping or moving processes carried out across industries ranging from manufacturing to warehousing. According to FMI valuation, nearly 70% of the corrugated boxes sold globally were made from single wall board. Sales of single wall board are likely to grow at 4.4% in 2019 as these boards are compatible with end-user requirements.

The study also opines that demand for double wall board corrugated boxes registered second highest consumption in 2018. While the demand trend of double wall board corrugated boxes will continue in the future, FMI finds that sales of triple wall board corrugated boxes is expected to rise on the back of focused demand from end-users that store ship large, high-value, delicate and heavy products.

Corrugated Box Production Consumes More Liners over Fluting Medium

Inner liner, outer liner and fluting medium comprise the design of the corrugated box. While each component carries different material options, volume sales of liners accounted for over 63% of all component sales in the corrugated boxes market.

The FMI study finds that sales of testliner is expected to grow at a higher rate over other liner types. Demand for unbleached testliner is expected to grow at 4.8% in 2019. Aligned with the recyclability trend, recycled fluting medium will be highly sought after in the coming years.

Slotted Corrugated Boxes Top Selling, Food Industry Leading End User

Slotted boxes accounted for nearly 72% of all corrugated boxes sold in 2018.

Demand for slotted boxes is likely to rise in 2019 at a significant rate with the demand to remain highly consolidated in food and consumer goods industries.

The study foresees that among an extensive list of end users, the food industry is likely to account for over 60% of the total corrugated boxes application in 2019.  The food industry, in particular, processed food industry manufacturers highly seek bulk packaging solutions, of which corrugated packaging is embraced owing to its cost effective and convenient nature.

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APEJ Spearheads Corrugated Boxes Consumption

The FMI study estimates that a significant bulk of corrugated box consumption is registered from APEJ countries. China followed by India are leading consuming countries in APEJ. Easy availability of raw materials, a good price point and growing demand for packaging in the region can be attributed to the greater revenues of corrugated boxes market revenues in the region.

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