Global Tobacco Packaging Market - Packaging Type (Metal, Paper-boxes, Flexible Packaging), Product (Cigarette, Cigars), and Geography - Growth, Trends, and Forecast (2018 - 2023)
The Global Tobacco Packaging Market was valued at USD 15.17 billion in 2017, and is expected to reach a value of USD 18.38 billion by 2023, at a CAGR of 3.21%, during the forecast period (2018 - 2023). The scope of the market covers primary, as well as bulk packaging.
The growth of the tobacco packaging market, globally, can be attributed to the growing demand for cigarettes in Asia-Pacific, as a growing population characterizes the region, with a significant amount of young adults, and middle-aged people, consuming tobacco. Europe, on the other hand, is witnessing tough legislative environment, which is a tangible threat to the tobacco packaging market.
Inclination Towards Flexible Packaging
Tobacco packaging demands premium quality with flavor barrier properties, easy printing, and handling. To prevent tobacco from deterioration, aroma transmission, and bacteria by sustaining a microclimate is choice of the right quality of packaging is paramount. Tobacco flexible packaging is available in a variety of forms to cater for various packaging needs. Some examples of these forms include, shrink sleeves, stand-up pouches, and three sided seal bags. By far and away the most significant is the flip top pack.This kind of packaging protects the cigarettes from damage and is most popular in western markets. The next most significant is soft pack, which is essentially a pack of paper construction, which offers minimal to the cigarette, but is less expensive to produce. Laminate structures of compostable films are used to produce pouches widely used by the Roll Your Own (RYO) tobacco. For primary packaging laminating materials, including bi-axially oriented polypropylene (BOPP), PE, PVDC lacquer, metalized films, polyester & nylon are employed. Flexible packaging has witnessed an increased adoption, owing to the flexibility in production, improved barrier properties, and cost effectiveness in nature.
Increasing Importance of Packaging for Advertising
Advertising, sponsorship, and free samples for tobacco are prohibited in many countries; packaging has become particularly essential for advertising. With packaging having the ability to communicate with consumers, and reinforce brand imagery, and the consumer associations with the product, brand name, price or distribution channel, tobacco companies are allocating significant resources to regularly innovate and alter packaging for marketing purposes. However, with the growing health issues associated with tobacco, regions, such as Australia, Japan, and Europe have introduced “plain packaging” with the aim to remove the branding elements on the pack tobacco industry uses to market cigarettes. This is expected to influence the overall value of packaging consumed by the tobacco industry. However, with companies looking to address the issue by introducing premium packaging, this trend is expected to weaken during the forecast period.
United States to Hold the Largest Market Share
In the United States, cigarettes, which accounted for a major share of around 90% of tobacco packaging units sold, determine the performance of tobacco packaging market. In terms of packaging, the continuous fall in unit volume sales of cigarettes is a result of the ongoing decline in the number of smokers. Anti-smoking campaigns are prevalent in the United States, and prohibitive taxation & regulations have increased in the country, over the last few years.Thus, tobacco packaging is expected to post a slow CAGR during the forecast period. The macro factors, such as booming retail sector, increase in online sales, technological advancements, and other factors, like increase in number of new smokers, etc. are expected to contribute to the demand for tobacco packaging products, particularly paper-based products, in the market. Paperboard boxes are expected to experience sold gains due to favorable environmental profile. Cigars & smokeless tobacco are expected to provide unit volume growth in tobacco packaging. However, considering their small shares, the decline of cigarettes is likely to affect the growth of overall tobacco packaging market.
Key Developments in the Market