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Packaging Trends in Emerging Markets

Packaging is becoming more and more important in the emerging markets – we spoke to Fritz Humer, EVP Emerging Markets at Constantia Flexibles, about the packaging of tomorrow in those regions.

October 10, 2016

Constantia Flexibles: Can you give us some background information on Packaging in Emerging Markets?

Fritz Humer: Before going into more detail, I would like to highlight the fact that Emerging Markets consumers make up about 75 percent of the world population. To be able to grow in Emerging Markets, it is important to see the differences to Developed Markets. Firstly, the Emerging Markets are made up of much more young people - about 9 percent of the total population is aged between 13 to17 year-old - than Developed Markets. This large proportion of a young population is very important for food manufacturers as they set the trend for future consumption.

Secondly, the annual flexible packaging consumption per capita is less than one fifth from that of Developed Markets. Nonetheless, the flexible packaging CAGR growth (2015-20) is predicted to be 3 times higher than in the Developed Markets.

When thinking of Emerging Markets it is also important to realize, that urbanization and a growing number of women who take on jobs boosts the demand for convenience food and influences pack sizes. Instead of being at home all day, shopping at markets and preparing the food from scratch they will have less time to dedicate themselves to cooking for the family so they will have to fall back on convenience products which supermarkets offer.

Another important element to highlight is the growing trend of sustainable packaging in the Indian market - this is mainly due to a growing middle class, who is aware of the country’s rapid and widespread environmental degradation. Currently in India, the converters that are able to address market sustainability concerns can become very successful. We at Constantia, are about to develop - in partnership with one of our major local customers - a laminate that is 100 percent recyclable with enhanced productivity improvements.

To sum it up, I think that the three key success factors to address Emerging Markets consumers are: adaptability, affordability and availability.

Constantia Flexibles: What role does size of packaging play in Emerging Markets?

Fritz Humer: It is undeniable that in lesser developed countries the price point is a key driver for purchase. This is why in India we see billions of one portion shampoo and detergent sachets, as well as individual candies and biscuits. Hundreds of millions of Indian consumers can only afford to pay just a few rupees and smaller pack sizes reflect this. This is good news for flexible packaging manufacturers as smaller packs require comparatively more material than larger ones.

It is also important to understand that consumers in Emerging Markets do not have a long history of using rigid packaging. So it is quite easy for them to accept products like cooking oil and motor oil in flexible pouches. As the retailing infrastructure continues to develop, and affordability becomes easier for the emerging middle classes, many more opportunities will open up for larger pack sizes as well.

Constantia Flexibles: What can you say about the trends for packaged food markets of tomorrow?

Fritz Humer: With the middle youth remaining the largest population segment by the next decade, consumers in Emerging Markets will continue to be relatively young compared to developed markets where mid- and late-lifers are already predominant. Members of the middle youth cohort are often married couples with children and in the peak of their earning and spending power. This will create substantial opportunities for consumer goods companies in various sectors ranging from food to household durables.

Leading packaged food player are constantly aiming to increase their share in Emerging Markets; this reality will definitely offer a host of opportunities to Constantia Flexibles in these regions.

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