The Asia Pacific beverage packaging market is expected to register a CAGR of 4.5% during the forecast period (2021 - 2026). The supply chain of the beverage packaging industry in the region has a significant impact due to the COVID-19 outbreak. For instance, beverage companies, such as Coca-Cola India and Nestle India, temporarily suspended their production at several manufacturing facilities. Moreover, they are permitted to provide only essential beverages (like bottled water) to consumers. All of these factors will significantly affect the beverage packaging industry.
- The demand for fruit pulp, juices, and other concentrates, along with sauces or bottles of ketchup, is increasing in the beverage market in the region. In addition, various health beverages, milk products, beer, and liquors have mainly contributed to the increasing demand for drinks in the area, thus driving the market growth.
- Moreover, the leading beverage manufacturers in India export various products, such as tea and coffee, to foreign markets each year. According to the Ministry of Statistics and Program Implementation (MOSPI) survey, the revenue from manufacturing beverages in India in FY 2019 was USD 10.94 billion. It is expected to reach USD 11.69 billion by 2023. For instance, UFlex Limited, India’s most significant multinational flexible packaging materials & solution company, has launched a packaging solution called ‘Asepto Eye’ for the beverages segment. The newest offering from Asepto gives a modern revival to aseptic packaging due to its packaging excellence, taking forward the innovative trail that the brand Asepto professes.
- The recent regulation on the ban of single-use plastics is expected to grow plastic packaging growth, which is scheduled to be enforced in the future once the discussion with all the stakeholders gets concluded. These regulations are expected to significantly affect the use of plastics in the beverage end-user industry, where plastics are extensively used in the form of bottles, straws, and containers.
- With the growth of the alcoholic and non-alcoholic beverage market, the demand for metal can package is expected to increase significantly across the region. Also, the increase in beverage packaging is driving the metal caps and closure market in the area. The region holds many players that supply ROPP and aluminum caps and closures to the beverage industries. For instance, Oricon Enterprises Ltd has 9,216 million units per annum of aluminum crown caps and 1,800 million units per annum of ROPP caps.
- Further, in February 2020, Coca-Cola Japan has launched two new PET packaging sizes for beverages that include 350ml and 700ml for its drink in Tokyo, Kanagawa, Chiba, and Saitama.
Key Market Trends
Beer is Expected to Account For Significant Market Share
- The consumption of beer has been increasing exponentially in the recent past. India remains one of the largest beer markets, with more than 20 million people entering the legal age for drinking every year. In addition, United Breweries, India's most prominent beer producer that also makes the famous Kingfisher brand, has announced their latest Kingfisher Instant Beer. The product is sold in a box that contains two sachets.
- The traditional packaging material used for beer in the region is the glass bottle sealed with a crown closure. As glass is extensively used for alcohol packaging in the area, the demand is expected to increase during the forecast period. Also, glass prices have a significant impact on the margin profile of the alcohol companies, which fluctuates based on the crude oil price movement.
- Owing to the uncertain margins, manufacturers are gradually incorporating other packaging materials in their production lines. A recent development is the use of PET bottles for the packaging of both alcoholic and non-alcoholic beer. The PET beer bottles used are non-tunnel pasteurized, one-way tunnel pasteurized and returnable/refillable bottles.
- Beer needs high CO2 and O2 barrier performance compared to PET used in carbonated soft drinks (CSD). The level required depends on the type of beer, container size, distribution channels, and environmental conditions (storage time, temperature, and humidity levels).
- Moreover, in this region, consumers are increasingly shifting toward gluten-free beers. Also, beer consumption grows at over 6 percent per annum in China, India, and Vietnam. Hence, the growing innovation in flavors and preparations is likely to drive the demand for beer, increasing beer cans' growth. For instance, Heineken, an Amsterdam-based company, increased its stake in Bangalore-based United Breweries, India's largest beer manufacturer, thereby offering high growth potential for the beer packaging industry in the country, which will raise the usage of beer cans.
- Further, Japanese companies are striding up their business by product innovation in Southeast Asia to cash in on the region's growth. For instance, in March 2021, Toyochem Co., Ltd., the polymers and coatings subsidiary of Japan's Toyo Ink Group, launched a new Bisphenol A non-intent (BPA-NI) internal coatings for metal beer bottles and cans. The new BPA-NI interior sprays and coil coatings for stay-on tab (SOT) ends are formulated to achieve the required performance based on acrylic emulsion and polyester resins. It is also addressing BPA-related health and food safety concerns from regulators and consumers alike. In addition, Toyochem will be marketing its BPA-NI solutions under the new brand name Lionova, as the company also seeks to expand its position in markets overseas.
India to Expected to Witness Significant Rate of Adoption
- In terms of India's beverage packaging, glass and rigid plastic hold a prominent share of the market. PET is the material that is used for packaging water, which accounts for around 55% of India's packaged water sector.
- The growth of the packaging market in India is primarily driven by the food and beverage industries. According to IBEF, the Indian food and grocery market is the world's sixth-largest, with retail contributing to 70% of the sales.
- The increase in the spending capacity of the middle-income group, the rapid expansion of organized retail and exports further facilitate the growth of the market. This has led to the need for standardized packaging, which can improve shelf-life, maintain production speed, and simultaneously ensure quality.
- Thus, adopting advanced packaging methods to ensure quality has become critical for India's food and beverage industry. According to the National Packaging Conference held by the Confederation of Indian Industries in January 2020, the food and beverage industries and e-commerce accounted for 50% of the packaging industry.
- Further, in July 2020, Fabonest Food and Beverages has launched spring water beverages in sustainable and endlessly recyclable aluminum cans in India to keep up India's sustainable development goals.
- According to the Indian Institute of Packaging (IIP), packaging consumption in India increased by 200% in the past decade, rising from 4.3 kg per person per annum (pppa) to 8.6 kg pppa. However, despite this growth, the per capita consumption of India is the lowest among the large economies of the world. This further emphasizes the future growth potential of the market.
- Further, in June 2021, Del Monte, the premium packaged foods brand from FieldFresh Foods, has announced its packaged King Coconut Water launch, renowned for its superior health and taste benefits. Del Monte is the first brand in India to offer King Coconut Water. It raises the bar in the fast-growing packaged coconut water segment as consumers increasingly adopt healthier lifestyles.
The Asia Pacific beverage packaging market is fragmented in nature. The major players with a significant share in the market are expanding their customer base across various regions. In addition, many companies are forming strategic and collaborative initiatives with multiple companies to increase their market share and profitability. Some of the recent developments in the market are:
- November 2020 - The Japanese beverage company Sangaria has been counting on Sidel as a vital partner for more than nine years. The company once again turned to its reliable supplier to increase its production flexibility by acquiring the Versatile Sidel Aseptic Combi Predis to handle aseptically carbonated and still drinks in PET bottles. This investment will also support Sangaria to widen its product portfolio in the future.
- May 2020 - Piramal Glass Limited partnered with Microsoft to transform its operational procedures to include digital technology in the manufacturing process. It will leverage some of the emerging or new-age technologies to transform its glass business.
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Table of Contents
1.2 Scope of the Study
4.2 Industry Value Chain Analysis
4.3 Industry Attractiveness - Porter's Five Forces Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Consumers
4.3.3 Threat of New Entrants
4.3.4 Threat of Substitutes
4.3.5 Intensity of Competitive Rivalry
4.4 Market Drivers
4.4.1 Acceleration in Packaging Machinery Imports, leading to proliferation of Beverage Packaging Industry
4.4.2 Increased demand for convenience packaging from consumers
4.5 Market Restraints
4.5.1 Lack of Exposure to Best Management and Manufacturing Practices
4.6 Assessment of COVID-19 Impact on the Market
5.2 By Type of Product
5.2.3 Pouches and Cartons
5.2.4 Caps and Closures
5.2.5 Other Types of Product
5.3 By Application
5.3.1 Carbonated Soft Drinks and Fruit Beverages
5.3.3 Wine and Distilled Spirits
5.3.4 Bottled Water
5.3.6 Energy and Sports Drinks
5.3.7 Other Applications
5.4.4 South Korea
5.4.5 Rest of Asia Pacific
6.1.1 Parekhplast India Limited
6.1.2 Crown Holdings, Inc.
6.1.3 Uflex Ltd
6.1.4 Haldyn Glass Limited
6.1.5 Rexam plc
6.1.6 Owens-Illinois Inc
6.1.7 Piramal Glass Private Limited
6.1.8 HSIL Group
6.1.9 Hindustan Tin Works Ltd
6.1.10 Amcor plc
6.1.11 Hindustan National Glass & Industries Ltd (HNGIL)
A selection of companies mentioned in this report includes:
- Parekhplast India Limited
- Crown Holdings, Inc.
- Uflex Ltd
- Haldyn Glass Limited
- Rexam plc
- Owens-Illinois Inc
- Piramal Glass Private Limited
- HSIL Group
- Hindustan Tin Works Ltd
- Amcor plc
- Hindustan National Glass & Industries Ltd (HNGIL)