Exclusive: Flexible packaging market for confectionery shows marked upturn

Despite ongoing challenges of pressure on pricing and heightened environmental concerns, flexible packaging has become a significant growth area in recent years, reports Neill Barston 

Fast-rising demand for flexible packaging is anticipated to see the international segment increase from $9.8 billion in value this year to $13.4 bn within a decade, driven by a sustained upturn within the ‘on-the-go’ product category.

Recent research from FutureMarket insights indicates a CAGR pattern of 3.1 per cent growth per year, as time-pressured consumers switch their focus to shorter moments of snacking, in a marked shift away from just a couple of years ago during the height of the Covid-19 pandemic that had halted travel and social interaction.

As the Smurfit Westrock Group has noted, amid a wealth of products competing for attention, getting packaging design just right remains of crucial importance. Moreover, as the business notes, with surveys revealing that 72 per cent of shoppers saying that packaging influences their choices, particularly if it is sustainably sourced, then it’s not hard to understand how industry has honed in on this key area.

Significantly, according to the FutureMarketinsights study, films and wraps were anticipated to account for 30.4 per cent in 2024, while in terms of applications, the biscuits category is projected to record a key share of 32 per cent within the past year, with notable growth predicted in Canada, UK and mainland Europe, though high-density population areas of Asia are said to hold the highest level of potential for market expansion. As the insights organisation asserted, the trend for smaller, on-the-go products and pack sizes have been adopted by shoppers as a means of greater portion control to monitor their calorie consumption.

However, as Confectionery Production has seen, the concept of ‘shrinkflation’ has also received considerable pushback from brand fans, who now appear to be getting less for their money in a number of instances across the sector. This in part has been impacted by the ongoing high cost of core ingredients including cocoa and sugar, which has prompted manufacturers to pass on costs to consumers, and in turn provoked reformulation and re-sizing measures.

Moreover, as the report highlights, amid a highly competitive global market, manufacturers are increasingly turning to high-end finishes to attract customers, particularly in developing seasonal and novelty products around the world. According to the research from FutureMarketInsights, smaller packaging sizes has seen a growth in higher levels of “functionality, sustainability and convenience” that have been designed to attract a younger audience seeking conveniently packaged goods that have a high emphasis on sustainability.

As the organisation added, confectionery players are continuously releasing new products with varied flavours and textures, which in turn drives the demand for flexible packaging. Equipped with a distinguished portfolio of packaging and paper products, market players are expected to work with manufacturers and brands to meet their packaging needs. Ismail Sutaria, lead consultant in packaging at Future Market Insights, commented: “Key players are releasing new designs in confectionery flexible packaging solutions to equip confectionery players with festive season packaging solutions. Additionally, players are investing in sustainable packaging solutions to resonate with eco-conscious consumers.”

Materials price rises
Significantly, another factor that is impacting this segment is the price of flexible packaging materials, which has reportedly varied notably in recent months, according to analysis from industry trade organisation, Flexible Packaging Europe. In its latest study, the group noted a mixed picture across paper, alufoil and plastics. Both 60 gsm one-sided coated paper and 12-micron PET film remained unchanged against Q3 2024 figures, while there was a four per cent increase in the price of seven-micron aluminium foil driven by strong demand and China cancelling export tax rebates as of 1 Dec 2024. Modest decreases on the preceding quarter were seen for 15-micron BOPA film (four per cent); 20-micron BOPP film (five per cent); HDPE (three per cent); and LDPE (1 per ent).

Santiago Castro of Wood Mackenzie, stated: “Prices paid in Europe for flexible packaging materials varied in Q4 2024, driven by price fluctuations in raw materials. BOPA and BOPP suffered price declines, while alufoil experienced price increases. All three were driven by similar price fluctuations in their raw materials. Despite a slight price reduction in short-fibre pulp, paper prices remained relatively stable in the last three months of 2024. Flexibles sales in Europe are still considered to be relatively weak, although they improved compared to the same period in 2023.”

Wider segment trends
As Richard Bell, head of research and development, confectionery, at the adapa group explained, there are several overarching considerations that are shaping the sector. For its part, the business remains dedicated to innovating and adapting to emerging trends, ensuring packaging solutions not only meet the current demands but also anticipate future needs. Firstly, he cited the upcoming Packaging and Packaging Waste Regulation (PPWR) which has been recently approved.

Next up will be the delegated acts defining the details. He said: “As we anticipate these unified European recyclability norms, our focus is on ensuring that our packaging solutions fully meet these standards. One strong effort here is the compliance with the new Cepi Recyclability Test Method Version 2 for our paper-based products, while keeping the performance on packaging lines at the current level. Cepi leads the way when it comes to setting high standards as it actually tests the feasibility of producing high quality paper from the recycled material.

“Our innovative PaperTwister(re) exemplifies our commitment, achieving maximum machine speeds of 2,300 pieces per minute while being certified recyclable according to Cepi. “Secondly, consumer preference for paper packaging continues to grow. Consumers are increasingly conscious of their environmental impact, and in paper packaging they see a ‘sustainable’ alternative that resonates with their values. Not every product is going to be suitable for being packed in paper, but wherever functional requirements allow for it, we support this trend.”

As he continued, in an era where consumers are more discerning with their spending, confectionery products must stand out at the point of sale (POS). To that end, the specialist asserted that packaging plays a crucial role in this, offering smart or digital solutions that provide additional information and keeping consumers engaged with regular updates on designs, promotions, or seasonal varieties. Consequently, he believed digital printing is particularly advantageous, catering to the need for lower order quantities while maintaining high-quality design standards.

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