table of contents - npes5 the worldwide market for print 2.0 (wwmp 2.0) study examines the current...

Table of contents

2

Table of contents

2

Executive summary 7

Overall print packaging market 13

Print packaging segments

Drivers of change: Industry and external

Drivers of change: Macroeconomic and demographic

Recommendations

Deep dives

Appendix: Regional profiles 107

23

40

49

56

63

Appendix: Country profiles

Appendix: EIU methodology

Appendix: Definitions

115

137

143

3 3

Foreword

Worldwide Market for Print 2.0

WWMP 2.0 – Packaging study

Today’s global business leaders face multinational challenges and constant change. The same can be said about print packaging in the global

setting. While much of the world business environment appears to work in tandem addressing many of the same challenges, a closer look unveils

very different economic, demographic, social and environmental issues from country to country—and different packaging segments within those

countries. In 2013 NPES published the “World-Wide Market for Print” (WWMP), a landmark study that framed an understanding of the size of the

global print and imaging industry, but also the myriad of opportunities and challenges of an international marketplace.

Continuing the WWMP study series and acknowledging the importance of this world view, in 2016 a collaborative partnership was forged between

NPES -- The Association for Suppliers of Printing, Publishing and Converting Technologies (NPES) -- in the United States and the Mechanical

Engineering Industry Association of Germany (Verband Deutscher Maschinen- und Anlagenbau—VDMA). The leadership of both organizations

recognized a need to revisit the 2013 WWMP research work and to drill more deeply, to provide a more current view of specific segments within

the global print market, while offering their own unique perspectives forged together in a jointly produced landmark study.

Phase One of this activity in 2016 focuses on examining the global print packaging market within 26 countries across the globe, spanning all

regions which, combined, represent 80% of global GDP and 70% of the world’s population. The renowned Economist Intelligence Unit (EIU)

was commissioned by the NPES and VDMA to conduct new primary and secondary research, assess key drivers and provide findings pertinent

to today’s global print packaging market, along with a view forward through 2020. Phase Two in 2017 will execute a similar multi-country

methodology to explore the global commercial & marketing and publishing segments.

The United States, Germany and other mature print markets appear to have limited capacity for growth in traditional print; however, the story is

quite different for print packaging, especially in developing regions of the world. This study highlights regions and countries where economic

indicators predict rising populations, prosperity and potential, and with it, opportunities for the growing, value-added packaging industry. It

provides insights into both developed and developing markets, their differences and similarities, as well as the continuing and growing

complexity of packaging technology necessary to satisfy global demands and requirements.

In addition to this report, a user-friendly data dashboard has been developed allowing comparisons across countries and packaging segments

by market size, growth rates and forecasts to 2020 for all 26 countries and major global regions.

We personally wish to thank the talented team from the EIU for their expertise and dedication to this research endeavor. Further, we especially

express our gratitude to the members of the joint Task Force of NPES and VDMA members, for their diligent work on this truly exceptional project.

December 2016

Thayer Long

President

NPES

Dr. Markus Heering

Managing Director, Printing & Paper Technology

VDMA

4 4

Task Force Members

Worldwide Market for Print 2.0


Member Title Company

Mr. Joerg Daehnhardt Director, Product Management, VLF Heidelberg U.S.A.

Mr. Dennis C. DeYoung Strategy Manager, GCBG Strategy & Marketing Communications Xerox Corporation

Ms. Mona Elibiary PageWide Web Press Marketing Hewlett Packard

Company

Mr. Eric Frank Senior Vice President, Marketing and Product Management KBA-North America

Mr. Christof Herschbach Head of Business Development Windmöller & Hölscher

Mr. Bernd Heusinger Deputy Head of Marketing Koenig & Bauer AG

Mr. Thomas Huhn Managing Director of the Paper Division / CSO TKM

Ms. Ashley Jackson Global Marketing Communications MacDermid Graphics

Solutions

Mr. Steven P. Mattingly Senior Vice President Southern Lithoplate Inc.

Mr. David J. Murphy WW Director of Marketing & Business Development Hewlett Packard

Company

Mr. Werner Schwab Head of Product Management Heidelberg Web Carton

Converting GmbH

Mr. Roland Stasiczek Fellow, Inkjet CF Business Development Canon U.S.A., Inc.

Mr. Marcus Tralau Chief Executive Officer KAMA GmbH

5 5

The Worldwide Market for Print 2.0 (WWMP 2.0) study examines the current state and outlook for the

global print packaging market

Background to the study


The Economist Intelligence Unit (EIU), in partnership with

NPES -- The Association for Suppliers of Printing, Publishing

and Converting Technologies -- and VDMA -- Verband

Deutscher Maschinen- und Anlagenbau -- has conducted a

study of the global print packaging industry.

The objective of the study was to develop a historical

assessment of the global print packaging market between 2011

and 2015 and to project its development over 2016 to 2020.

The study examined five segments of the print packaging

industry: corrugated, folding carton and paperboard, flexible,

labels and tags, and other print packaging.

The EIU developed the market sizing, forecasts and insights in

this report from February to September 2016. Primary and

secondary research efforts were combined with statistical

techniques to estimate the historical market sizes (2011–15) of

the print packaging segments.

WWMP 2.0 follows on from the WWMP 1.0 study (2013), also

conducted by the EIU, which covered more than 50 countries

spanning 2007–17.

Product scope

Corrugated print packaging

Folding carton and

paperboard print packaging

Flexible print packaging

Label and tags printing

Other print packaging

Geographic scope

26 countries

6 deep dives

Time period

2011–2015 historical

2016–2020 forecast

6 6

26 countries spanning all global regions, representing 80% of global GDP and 70% of the world’s

population, were selected and analyzed, based on their overall size and global importance within the

industry, as well as the potential growth opportunities they present.

Geographic scope


Canada

United States

North America

Brazil

Chile

Colombia

Mexico

Latin America Australia

China

India

Indonesia

Japan

Philippines

South Korea

Vietnam

Asia-Pacific

France

Germany

Italy

Netherlands

United Kingdom

Western Europe

Poland

Russia

Turkey

Central &

Eastern Europe

Nigeria

South Africa

Africa

Iran

Saudi Arabia

Middle East

Executive summary

8 8

Demand for print packaging will continue to grow robustly over the

next several years, underpinned by continued economic growth,

development, and positive demographic shifts around the world.

Print packaging globally will continue to grow at an average annual

rate of 5.2% in 2016–20.

The global print packaging market is concentrated, with the top five

markets accounting for 80% of the total market. The two largest print

packaging markets in our study, the US ($78bn) and China ($69bn),

together account for 60% of the total print packaging market in our

study. Japan, Germany and India round out the five largest markets.

There is considerable variation across countries and regions.

Developed markets will see steady though muted growth. The bright

spots are found in the emerging markets of Asia, in particular India,

Indonesia and Vietnam. In Africa, and specifically Nigeria, strong

growth is expected, albeit with a higher degree of risk.

Broadly speaking, emerging markets are catching up, converging

with developed markets, a positive product of rising incomes,

increased urbanization, growing middle classes, and shifting consumer

preferences.

The print packaging industry will remain fragmented, in spite of

continued consolidation, especially in developed markets such as the

US, where thin margins are encouraging corporate M&A activity.

Advances in technology, smart packaging, and the continued rise

of sustainability are additional trends that will shape the industry over

the coming years.

The print packaging market totals $244bn in 2016 across the 26 major markets in this study. The US

is the largest market at $78bn, closely followed by China at $69bn.

The print packaging landscape

Executive summary

2011 2016 2020Flexible Labels & tagsFolding carton CorrugatedOther

Print packaging market in 2011, 2016

and 2020

Note: Share of the sum for all 26 countries in this study.

Average CAGR in local currency terms.

Source: EIU.

Average

CAGR

5.2%

7%

7%

36%

35%

20%

20%

12% 12%

25% 26%

$244bn

$286bn

7%

36%

20%

12%

25%

$231bn

Average

CAGR

5.2%

Exchange rate fluctuations

mute growth in US dollar

terms vis à vis local-

currency terms.

9 9

Economic growth, rising literacy, and shifting lifestyle and consumer

preferences have created more sophisticated consumers and spurred

increased demand for packaged goods, in the form of processed

foods and beverages, toys, electronics, and pharmaceuticals,

particularly in emerging markets. The overall print packaging market

in emerging markets will grow at an average annual rate of 6.0%,

more than twice the 2.6% rate forecast for developed markets in

2016–20. Developed markets continue to experience muted growth

in the wake of the financial crisis. Uncertainty from the June 2016

Brexit vote has underscored fragility in the outlook for these markets.

Flexible print packaging will be the fastest-growing segment at an

average annual rate of 5.6% in 2016–20. The lightweighting of

packages and the advancement of digital printing on flexible

packages will drive the segment to gain global market share by 2020.

The labels & tags and the folding carton print packaging segments

are both growing at a still-strong annual average rate of 5.2% over

2016–20. Growth of labels & tags is due to the rise of digital printing

and small-batch products. Folding carton will grow on the back of

rising incomes and urbanization in emerging markets, as city dwellers

consumer more packaged goods than their rural counterparts.

The corrugated segment, the largest and most mature market, will

be the slowest-growing print packaging segment in 2016–20, albeit

at a robust annual average growth rate of 4.5%. The continued rise

of e-commerce and trends such as digital printing for high-quality

marketing packaging will support growth.

The rise of emerging markets remains the dominant trend and driving force behind the print packaging

industry outlook. In terms of segments, flexible print packaging shows a strong outlook, supported by

lightweighting and the rise of digital printing.

The future view of print packaging

Executive summary

0%

2%

4%

6%

8%

10%

Flexible Labels & tagsFolding carton CorrugatedOther Total

Segment growth in developed and emerging

markets in 2012-2020

Note: Growth is the average growth rate across the countries in

the developed and emerging markets, respectively, in local

currency terms.

Source: EIU.

Emerging

markets

Developed

markets

Forecast

10 10

Key print packaging trends

Executive summary

Economic growth underpins growth of the print packaging industry.

Asia-Pacific drives print packaging growth, powered by India, Indonesia, China and Vietnam.

Economic growth

Urbanization is a key driver of growth in demand for print packaging products.

Emerging markets continue to experience more rapid urbanization rates than developed economies.

Urbanization

Consumption behaviors change as disposable incomes increase.

The rise of the middle class translates into more consumers and growth for the print packaging industry.

Rising middle class

Global trade underpins demand for print packaging.

Protectionism is a growing concern around the world, with the future of major trade deals still uncertain.

Global trade flows

US dollar appreciation and commodity price bust has hurt many emerging market currencies, influencing trade flows and output of highly integrated economies.

Exchange rates

Digital printing allows for more customized short runs for packaging.

Smart packaging is the next step in terms of innovative packaging.

Technological

innovations

Consumers are more conscious of their green footprints, such as the packaging of the products they buy.

Lightweighting is a common practice.

Environmental and

sustainability concerns

Regional sourcing and localization have emerged as cost-cutting measures to improve resiliency to political and economic shocks.

Cost-cutting

to improve

resiliency

Craft, customized products are gaining market space, especially among middle-income consumers.

Rise of

small-batch

products

Consumers are rebelling against traditional, marketing-led consumerism and are seeking more product differentiation.

Product

differentiation

Industry-specific and

external trends

Macroeconomic and

demographic trends

11 11

Key takeaways

Executive summary

Markets Regions

Segments Trends

Consumers in developed markets, notably the US, are

buying from a wider variety of brands and product

types and sizes and are focusing more on health,

wellness and environmentally friendly products.

The rising middle class will continue to support

China’s consumer market. Print packaging growth,

however, will slow down as manufacturing moves to

cheaper labor markets in South-East Asia.

Fast-growing incomes and urbanization in India,

Indonesia, Nigeria and Vietnam bolster print

packaging growth in those markets.

The bright spots are found in the emerging markets of

Asia-Pacific, in particular India, Indonesia and

Vietnam. Africa also offers high potential, albeit with a

higher degree of political and economic risk.

Developed markets, particularly those in Western

Europe, continue to experience muted growth in the

wake of the financial crisis. Uncertainty from the June

2016 Brexit vote has underscored fragility in the

outlook for these markets.

Protectionist rhetoric in developed and emerging

markets poses a risk to trade, affecting corrugates as

well as other types of print packaging.

Flexible print packaging will be the fastest-growing

segment over 2016–20, owing to cost-cutting and

more environmentally friendly practices such as

lightweighting.

The labels & tags and the folding carton print

packaging segments are growing at very similar rates.

Digital printing and small-batch product growth bolster

labels & tags, while urbanization and consumption of

packaged goods supports folding carton.

The corrugated segment is slow growing because of

its large size. E-commerce is a driving force that will

keep it growing at a still-healthy rate of 4.5%.

The industry will remain fragmented, in spite of

continued consolidation in developed markets like the

US, where thin margins are encouraging M&A activity.

Big-brand products will continue to dominate the

market, but smaller-batch, local products are

growing rapidly. Digital printing, best for short

printing runs, serves consumers demanding a more

diversified array of products, especially within labels &

tags, but increasingly with other segments as well.

Consumers are demanding and producers are

delivering more environmentally friendly

packaging, such as lightweighting and reducing

materials.

12 12

The EIU identified four overarching recommendations for print packagers, converters,

brand owners, and input manufacturers (equipment, inks and substrates).

Recommendations

Recommendations

Invest in key

country markets

Seek value along

the supply chain

Stay ahead on

green packaging

Keep up with

trends and

technologies

Add consulting to the menu of products and services.

Continue development of machine-to-machine technologies.

Lightweighting of packages makes them cheaper to ship and manufacture.

Create internal regulatory and quality assurance teams to monitor your product.

Customized and short-run print packaging is on the rise, and print packagers will be using more digital print packaging going forward.

Adopt more smart packaging for your products.

While developed markets are stable and will continue to play

a big part in the industry, emerging markets are where

growth will be concentrated in the 2016–20 period.

Emerging markets will add $24bn of the $44bn additional

revenue to print packaging between 2015 and 2020.

Consumers are not only

looking for a recyclable product

and package, but a reduced

footprint over its entire

production.

Governments will strengthen

environmentally friendly

packaging regulations,

bolstering growth of green

packaging globally.

Overall print packaging market

14 14

The print packaging market represents a bright spot of steady, positive growth in the context of

uncertainty surrounding the outlook for other segments of the print industry.

The print packaging market


Demand for print packaging will continue to grow robustly over the next several years,

underpinned by continued economic growth, development and positive

demographic shifts around the world.

Print packaging globally will continue to grow at an average annual rate of 5.2% in

2016–20, just below the 5.3% rate of over 2011–15.

Note that over the 2011–15 period, the US dollar appreciated considerably against most

other currencies.

Within the positive picture there is considerable variation across countries and regions.

While there will be steady growth in developed markets, the bright spots are found in the

emerging markets of Asia, in particular India, Indonesia and Vietnam. Africa, and

specifically Nigeria, also offers high potential, albeit with a higher degree of risk.

Broadly speaking, emerging markets are catching up, converging with developed

markets, a positive product of rising incomes, increased urbanization, growing middle

classes, and shifting consumer preferences.

The industry will remain fragmented, in spite of continued consolidation in particular in

developed markets like the US, where thin margins are encouraging corporate activity.

Advances in technology, smart packaging, and the continued rise of sustainability

are additional trends that will take shape in the industry in the coming years.

Note that in 2011–15, the US dollar appreciated considerably against most other currencies. For the purposes

of drilling down to the underlying market dynamics, when discussing growth rates, this report refers to

growth rates in local currency units (unless otherwise noted).

Growth rates and values in this study are expressed in nominal terms.

15 15

Corrugated print packaging has the highest

share of the global print packaging market (36%),

due to its widespread use in displays, packaged

consumer goods and shipments, all of which are

growing strongly.

Flexible (second-largest) and folding carton

(third-largest) have similar market shares (25% and

20%, respectively), and often compete in the same

consumer packaging market, such as cereals and

baked goods, as well as the personal care

products market.

Labels & tags, primarily used in packaged foods

and consumer goods, has a market share of 12%.

The two largest print packaging markets in our

study, the US ($76bn) and China ($69bn), together

account for 60% of the total print packaging market

in our study.

Japan, Germany and India round out the five

largest markets, with $16bn, $15bn and $12bn

markets, respectively.

The global print packaging market is concentrated,

with the top five markets accounting for 78% of the

total market.

The print packaging market grew from $231bn in 2011, to $242bn in 2015. Corrugated print

packaging has remained the largest print packaging segment.

The current market


Flexible 25.0%

Labels & tags 11.8%

Folding carton 20.3%

Corrugated 36.2%

Other 6.7%

Overall segment share in 2015

Note: Share of the sum for all 26

countries in this study.

Source: EIU.

$242bn

0

20

40

60

80

US China Japan Germany UK

Billi

on

s

Top 5 print packaging markets in 2015 (US$)

Flexible Labels & tags Folding carton Corrugated Other

Source: EIU.

76 69

16 15 12

16 16

The US continues to be the largest print packaging market in the world, but Asia-Pacific is the region

with the largest such market, due to the combined might of China, Japan and India.

The current market


Print packaging growth in 2011–15 averaged 5.3%

per year in the 26 countries in this study.

The US grew at an average annual growth rate of

2.4% in 2011–13 and picked up to 2.8% in 2014–15.

Western Europe muddled through 2011–13 with

average annual growth of 0.6%, but growth picked

up in 2014–15, at an annual average rate of 2.0%.

In the emerging world, print packaging growth in

Latin America, Middle East, Africa and Russia started

to slow in 2012 with the end of the commodities boom,

which hurt consumer expenditures in those regions.

Asia-Pacific grew strongly in 2011–15 overall, but

gradually slowed towards the end of the period. The

region expanded 7.8% in 2012, slowing to 6.3% by

2015. Because of these strong growth dynamics,

Asia-Pacific’s share of the global print

packaging market jumped from 39% in 2011 to

43%, a 4-percentage-point gain. On the other hand,

Western Europe’s share of the industry shrank from

24% in 2011 to 20% in 2015.

Other emerging regions such as Latin America

and Central & Eastern Europe lost market share,

due to relatively poorer growth performance over

these years.

Asia-Pacific 38.8%

North America 31.0%

Western Europe 23.7%

Latin America 3.6%

C. & E. Europe 1.8%

Africa 0.5%

Middle East 0.6%

Overall regional share in 2011

Note: Share of the sum for all

26 countries in this study.

Source: EIU.

$231bn

Asia-Pacific 42.8%

North America 32.5%


Latin America 2.7%

C. & E. Europe 1.2%

Africa 0.5%

Middle East 0.5%




Source: EIU.

$242bn

17 17

Rising incomes and urbanization bolster print packaging growth. Economic growth, rising literacy, and shifting lifestyle and consumer preferences have created more sophisticated consumers and spurred increased demand for packaged goods, in the form of processed foods and beverages, toys, electronics, and pharmaceuticals.

In spite of the recent slump of emerging markets, they will continue to outperform developed markets and become 41% of the global market by 2020, a leap from 33% in 2011. Print packaging in emerging markets will grow at an average annual rate of 6.0%, more than twice the 2.6% rate forecast for developed markets. Developed markets, particularly those in Western Europe, continue to experience muted growth in the wake of the financial crisis. Uncertainty from the June 2016 Brexit vote has underscored fragility in the outlook for these markets.

The concentration of the print packaging industry in the countries with major print markets will remain a key trend: the top 5 markets in 2011 were 74% of the market. By 2020, they will be 79% of the market.

China, the largest emerging market, is expected to continue to grow considerably over the coming years. While the US will remain the largest print packaging market in 2020, China will have closed the gap considerably.

The rise of emerging markets remains the dominant trend and driving force behind the print

packaging industry outlook.

The outlook


Asia-Pacific 43.7%

North America 33.0%


Latin America 2.5%

C. & E. Europe 1.1%

Africa 0.4%

Middle East 0.5%




Source: EIU.

$244bn

Asia-Pacific 45.6%

North America 31.5%


Latin America 2.6%

C. & E. Europe 1.1%

Africa 0.4%

Middle East 0.5%




Source: EIU.

$286bn

18 18

The highest growth in print packaging in 2016–20 will come

from countries in Asia-Pacific, owing to India, Indonesia and

Vietnam. Increasing incomes and the rise of the middle class are

the major sources of growth in those countries.

The slow-growing markets are (for the most part) developed,

mature economies. Europe features heavily here, with countries

continuing to grapple with economic and political fragility. The UK’s

bottom ranking comes after forecasts were revised in the wake of

the Brexit vote, which is anticipated to take a strong toll on domestic

purchasing power and consumption. Japan is right behind the UK

at the bottom, owing to ongoing economic and demographic

weakness, in spite of Abenomics, a set of policies that combine

fiscal stimulus, monetary easing and structural reforms.

All the top 13 fastest markets over 2016–20 are emerging markets. The developed markets, which

are mature and undergoing economic and political challenges, fall to the bottom of the rankings.

The outlook


1.1%

1.1%

1.7%

1.8%

2.4%

2.5%

2.7%

2.7%

2.8%

2.9%

3.5%

3.9%

4.0%

4.6%

5.7%

5.9%

6.0%

6.3%

7.1%

7.5%

7.6%

7.8%

9.7%

10.1%

10.3%

12.0%

UK

Japan

Italy

France

Russia

Netherlands

Germany

US

Canada

Poland

Australia

Saudi Arabia

South Korea

Brazil

Chile

China

Mexico

Turkey

Philippines

South Africa

Colombia

Iran

Vietnam

Indonesia

Nigeria

India

Growth rates in 2016-20

Note: Compound annual growth rate in local currency terms.

Source: EIU.

Bottom half

Top half

-4%

-2%

0%

2%

4%

6%

0

100

200

300

400

2015 2016 2017 2018 2019 2020

Billi

on

s

Flexible Labels & tags Folding carton

Corrugated Other Total growth (%)

Note: This includes all 26 countries in this study. All figures are in US$ terms.

Source: EIU.

Overall print packaging market in 2011-20 (US$)

19 19

In both emerging and developed

markets, flexible print packaging will

be the fastest-growing segment over

2016–20, at average annual rates of

7.6% and 2.8%, respectively. The

average annual growth rate of flexible

print packaging for all countries is 5.6%

in 2016–20.

The labels & tags and the folding

carton print packaging segments are

growing at very similar rates in both

emerging and developed markets.

Across all countries, both labels & tags

and folding carton are growing at an

annual average rate of 5.2% in 2016–20.

The corrugated segment will be the

slowest–growing print packaging

segment in 2016–20, much as it was in

the historical period of 2011–15. In

emerging markets, the corrugated

segment will expand on average 6.4% in

2016–20, while it will grow by only 1.9%

on average in developed markets in the

same period.

Print packaging segments will grow more strongly and more uniformly in emerging markets compared

with developed markets.

The outlook


0%

2%

4%

6%

8%

10%

2012 2013 2014 2015 2016 2017 2018 2019 2020


Corrugated Other Total

Segment growth in developed and emerging markets in 2012-2020

Note: Growth is the average growth rate across the countries in the developed and emerging markets,

respectively, in local currency terms.

Source: EIU.

Emerging

markets

Developed

markets

Forecast

20 20

Emerging regions generally have high growth but smaller print packaging markets. Asia-Pacific is the

exception, having the happy confluence of both large and fast-growing markets.

Print packaging market size and growth


90.1 North

America

7.4

52.3

3.1

1.3

1.0

130.3

Latin

America

Western

Europe

Central &

Eastern Europe

Africa

Middle East

Asia-

Pacific

> 8%

6%-8%

4%-6%

2%-4%

< 2%

Total print packaging

market, average growth

(2016–20)

Size of regional

print packaging

market in 2020

in US$ bn

21 21

In 2015, the five largest country markets for

overall print packaging were the US, China, Japan,

Germany and the UK.

India surpasses the UK in 2016, becoming the

fifth-largest market. India, growing fast, by 2020 will

almost catch up to Japan, the fourth-largest market

but experiencing a continuation of the prolonged

period of stagnant growth.

The US and China alone made up 60% of the total

print packaging market in 2015. While their

combined market share will remain largely the same

(at 59%) in 2020, China will have gained

considerably against the US. In 2015, the US print

packaging market was 11 percentage points

larger than China’s. By 2020, the differential will

be less than 4 percentage points.

The print packaging industry globally is

geographically concentrated, and will become

more so over the forecast period. The share of the

top five markets in 2015 (which includes UK but

excludes India) is 78%, but by 2020 the share will

increase to 79%.

The US will remain the largest print packaging market in 2020, though China will narrow the gap

considerably. The UK’s weakness will make room for India to enter the top five largest print packaging

markets.

Largest markets


Top 5 77.6%

Bottom 21 22.4%

Top 5 share of market in 2015

Note: Share of the sum for all 26 countries in this study.

Top 5 countries are US, China, Japan, Germany and UK.

Source: EIU.

8.5%

10.1%

10.2%

10.5%

12.4%

Iran

Vietnam

Indonesia

Nigeria

India

Top 5 growing countries in 2016-20


Source: EIU.

22 22

India, Nigeria, and Indonesia have favorable

demographics on their side. With large populations

and relatively small values of print packaging market

per head, there is significant room for long-term

growth in these markets.

With rising labor costs and economic moderation

in China, global manufacturers are looking at other

Asian countries to base their factories. South-East

Asia is a popular destination and Vietnam is its

flagbearer. With relatively cheap labor costs and a

well-educated population relative to its regional peers,

Vietnam is attracting investments, expanding its

status as a manufacturing hub, supporting both the

consumer base and the print packaging industry.

Iran remained closed from Western investment and

the global community for many years due to heavy

sanctions imposed by the US, EU and UN. In 2015,

a US deal was reached, establishing a timeline for

the lifting of sanctions. The opening of Iran’s market

will boost internal consumption and manufacturing

and foster a positive environment for print packaging.

In absolute terms, China will be the biggest

winner, adding $15bn to its print packaging market,

nearly the size of Germany’s total print packaging

market, between 2015 and 2020.

Changing global dynamics, shifting demographics and increasing regulation and policy

implementations are the drivers of the fastest-growing print packaging markets in 2016–20.

Growth markets


15.2

10.7

6.8

2.9 2.7 1.3 1.1 0.8 0.8 0.6

02468

10121416

Billio

ns

Dollar growth in print packaging market from 2015 to 2020

Source: EIU.

6.0%

6.2%

6.9%

7.4%

7.6%

8.5%

10.1%

10.2%

10.5%

12.4%

0% 5% 10% 15%

Turkey

Mexico

Philippines

Colombia

South Africa

Iran

Vietnam

Indonesia

Nigeria

India

Top ten fastest growing markets in 2016-20 Total average

5.2%

Note: Compound annual growth rate for 2016-20.

Source: EIU.

24 24

The flexible segment offers great opportunity: the market is relatively large and the outlook is for

strong positive growth, supported by shifting preferences and rising incomes.

Segment comparison


Growth

2016–20

Current

size

Overall

potential for

success*

Flexible The second-largest segment will be growing

strongly on the back of rising incomes in

emerging markets and shifting preferences in

developing markets.

Labels &

tags

The smallest of the four main segments in this

study will be growing strongly, as demand for

custom, short-run print packaging rises.

Corrugated Corrugated, the largest segment in our study,

is a mature market in most countries, so

growth will be relatively lower but stable.

Folding

carton

Folding carton and flexible generally move

together, but changes in consumer lifestyles

and preferences are shifting some growth

away from folding carton and towards flexible. Medium

High

Very low

Low

Very high

= Very favorable

= Unfavorable

= Stable

= Favorable

* The “Overall potential of success” is a qualitative assessment of growth opportunity in the forecast period. It is success in terms of

growth potential for printers and converters.

25 25

Corrugated print packaging overview

Print packaging segments: Corrugated

Corrugated print packaging ranks first among the four main packaging segments in terms of size and

fourth in terms of projected growth.

The total corrugated print packaging

market size in 2015 is $87.6bn. By

2020, it is expected to reach $101.3bn.

Revenues for corrugated print

packaging expanded at an average

4.6% per year in 2011–15 in local-

currency terms and will increase 3.5%

in 2016–20.

3.5%

While corrugated remains the largest

segment, it is a relatively mature

market, and growth, which typically

tracks real GDP, is expected to be

steady but slower than other segments.

84 86 87 90 88 88 90 93 96 101

4.0%

4.5%

5.0%

5.5%

6.0%

0

20

40

60

80

100

120

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Billi

on

s

Market size in US$ (left scale) Growth in LCU terms (right scale)

Note: Total growth corresponds to average growth in local currency terms of all 26 countries in this study.

Source: EIU.

Forecast

Corrugated print packaging size and growth in 2011-20 (US$)

$101.3

26 26

Corrugated: Trends and products


The corrugated segment, driven by a dynamic e-commerce industry and manufacturing growth in

emerging economies, is a large, growing part of the print packaging industry.

Key trends

Exports and shipments support demand in the corrugated segment, and large,

export-oriented markets typically have large corrugated markets.

While mature, corrugated will continue to grow at a moderate pace as e-commerce

gains ground owing to increasing accessibility through mobile devices, competitive

prices, urbanization and fast shipping.

China has the world’s largest e-commerce market, which is reflected in its large

corrugated segment. In 2015 online shopping accounted for 12.9% of total

consumer goods retail sales. In the first five months of 2016 online sales slowed,

but still the growth rate remained impressive at above 25%. The Indian e-

commerce market is growing strongly; Goldman Sachs estimates India’s e-

commerce market more than doubled in size from $11bn in 2015 to $23bn in 2016.

Corrugated products are considered to be affected by lightweighting and ‘down

gauging’, or using fewer materials to produce packages to maintain pricing

advantages against competitors.

Corrugated is traditionally a lower-value-added segment, but it is innovating and

using new technologies, such as printing Quick Response (QR) codes on consumer

boxes and digital printing for good-quality, attractive packaging and marketing

materials. Experts say that this trend is on the rise, signaling growth potential within

a higher-value-added segment of the corrugated space.

Key products

Shipment boxes, storage boxes, filing boxes, electronics packaging, moving boxes.

27 27

Corrugated, the largest print packaging segment, is dominated by the Asia-Pacific region, which is

home to the largest and fastest-growing markets. Shipments and exports are a key driver, for

example of consumer goods and electronics from the Asia-Pacific market.

Corrugated: Top markets


0

10

20

30

40

2015 2016 2017 2018 2019 2020

Bill

ion

s

India Germany Japan US China

Forecast

Note: Top 5 countries are the top markets in 2020.

Source: EIU.

Corrugated print packaging in the top 5 markets in 2015-2020

Bottom 21 17.6%

India 5.4%

Germany 6.1%

Japan 7.2%

US 29.1%

China 34.6%

Top 5 82.4%

Corrugated share of the top 5 markets


Source: EIU.

0.7%

0.8%

1.2%

1.4%

1.7%

1.7%

1.9%

2.4%

2.6%

2.8%

2.8%

3.1%

3.4%

4.0%

4.4%

5.1%

5.4%

5.8%

6.0%

6.4%

6.4%

6.8%

9.4%

9.5%

9.6%

12.3%

Japan

UK

Netherlands

Italy

US

France

Poland

Russia

Canada

Australia

Germany

South Korea

Saudi Arabia

Chile

Brazil

Turkey

Mexico

China

South Africa

Philippines

Colombia

Iran

Indonesia

Vietnam

Nigeria

India

Corrugated growth rates in 2016-20


Source: EIU.

28 28

Flexible print packaging overview

Print packaging segments: Flexible

Flexible print packaging ranks second among the four main packaging segments in terms of size and

first in terms of projected growth.

The total flexible print packaging market

size in 2015 is $60.6bn. By 2020, it is

expected to reach $73.2bn.

Revenues for flexible print packaging

expanded at an average 5.9% per year

in 2011–15 in local currency terms and

will increase 5.7% in 2016–20.

5.7% $73.2

There is considerable opportunity in the

flexible market, as consumer incomes

and expenditures underpin packaged

goods demand, and producer desire for

shorter runs increases.

57 59 60 62 61 62 63 66 69 73

4%

5%

6%

7%

0

20

40

60

80

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Billi

on

s



Source: EIU.

Forecast

Flexible print packaging size and growth in 2011-20 (US$)

29 29

Flexible: Trends and products


Due to its economical and innovative value, flexible packaging is forecast to be the fastest-growing

segment over the next five years.

Key trends

Growing demand for shorter runs and job sizes as consumers,

particularly in developed markets, prefer a wide variety of products

in different shapes and sizes, as well as features such as security,

handles, zippers and spouts.

Shifting consumer preferences towards pre-packaged foods,

particularly in urbanizing markets but also in some developed

markets where convenience is paramount, is a key driver.

The packaging industry is shifting to flexible and away from folding

carton and other rigid packaging, because it is considered more

attractive, cheaper, sustainable, recyclable and easier to transport.

There is an increasing variety of new flexible packaging

applications in the food and beverage space, from baby food to

condiment stand-up pouches.

Flexible packaging often requires low-migration inks, as it is directly

in contact with the product. Because of this, the market for low-

migration inks will grow strongly, accompanying the trends of flexible

packaging.

Intelligent packaging and security applications, which are

generally technologies applied on flexible packaging, will also lift

growth of flexible packaging in 2016–20.

Key products

Household supplies, food goods, pet food, personal goods.

30 30

The second-largest segment is dominated by the US, but growth will be driven from emerging

markets in Asia-Pacific, Africa and the Middle East. Growing populations, an expanding middle class

and increasing incomes are the key drivers for flexible print packaging.

Flexible: Top markets


0

10

20

30

2015 2016 2017 2018 2019 2020

Bill

ion

s

Germany Japan India China US

Forecast


Source: EIU.

Flexible print packaging in the top 5 markets in 2015-2020 (US$)

Bottom 21 21.8%

India 7.6%

Germany 5.9%

Japan 6.6% US

37.2%

China 20.9%

Top 5 78.2%

Flexible share of the top 5 markets


Source: EIU.

0.9%

1.7%

2.2%

2.4%

3.0%

3.0%

3.0%

3.1%

3.4%

3.6%

3.9%

4.4%

4.5%

4.8%

6.4%

6.5%

6.7%

6.7%

7.4%

8.3%

8.4%

9.5%

10.8%

10.8%

10.9%

12.5%

Japan

UK

France

Italy

Russia

Netherlands

Canada

Poland

US

Germany

Australia

South Korea

Saudi Arabia

Brazil

China

Turkey

Mexico

Chile

Philippines

Colombia

South Africa

Iran

Vietnam

Nigeria

Indonesia

India

Flexible growth rates in 2016-20


Source: EIU.

31 31

Folding carton print packaging overview

Print packaging segments: Folding carton

Folding carton print packaging ranks third among the four main packaging segments in terms of size

and third in terms of projected growth.

The total folding carton print packaging



Revenues for folding carton print


5.4% per year in 2011–15 in local


in 2016–20.

5.2% $57.3

Growth will be supported by the rise of

the middle class, especially in emerging

countries. In more developed markets,

however, there is a general shift away

from folding carton and towards flexible.

47 48 49 51 49 49 50 52 54 57

4%

5%

6%

7%

0

20

40

60

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Billi

on

s



Source: EIU.

Forecast

Folding carton print packaging size and growth in 2011-20 (US$)

32 32

Folding carton: Trends and products


Despite a shift towards plastics and other substrates, folding carton demand is expected to continue

growing alongside declining raw materials prices and increasing discretionary spending.

Key trends

Similar to flexible packaging, folding carton packaging offers a significant

growth opportunity in economies with fast-expanding middle classes,

who are demanding common consumer goods such as pharmaceuticals,

pre-packaged meals, and beauty products.

But there is also a shift away from folding and towards flexible

packaging solutions, on the back of consumer preferences but also

manufacturer cost-cutting: flexible uses less material and is cheaper to

transport.

Folding carton is affected by light-weighting of packaging, as

manufacturers are cutting costs in smaller, more efficient packaging, and

marketing this move as environmentally friendly.

Folding carton is a common vessel for luxury goods and cigarettes,

both of which remain huge markets despite health concerns affecting

cigarette sales. In China for example, folding carton is a popular

packaging on the back of the strong domestic demand for these goods.

Folding carton is often a print package that is combined with either

flexible (e.g., cookie box with a bag inside) or labels & tags (e.g.,

pharmaceutical product box with a bottle with labels on).

Key products

Cereal boxes, pharmaceuticals, dietary supplements, cigarettes,

household goods, food goods.

33 33

Folding carton and flexible are often substituted for each other in consumer goods packaging. While

developed markets continue to shift towards more flexible, the fast-growing emerging markets are

using relatively more folding carton.

Folding carton: Top markets


0

5

10

15

20

2015 2016 2017 2018 2019 2020

Bill

ion

s

UK India Germany US China

Forecast


Source: EIU.

Folding carton print packaging in the top 5 markets in 2015-2020

Bottom 21 25.2%

India 6.8%

Germany 9.7%

United Kingdom

6.0% US

20.9%

China 31.3%

Top 5 74.8%

Folding carton share of the top 5 markets


Source: EIU.

0.7%

1.5%

1.9%

1.9%

2.4%

2.6%

2.7%

2.8%

2.8%

3.5%

3.9%

4.0%

4.1%

4.7%

5.4%

5.7%

6.1%

6.6%

6.7%

7.6%

7.8%

8.7%

9.6%

9.6%

11.0%

12.2%

Japan

UK

France

Italy

US

Russia

Netherlands

Poland

Canada

Germany

South Korea

Australia

Saudi Arabia

Brazil

China

Chile

Turkey

Philippines

Mexico

Colombia

South Africa

Iran

Indonesia

Vietnam

Nigeria

India


Source: EIU.

Folding carton growth rates in 2016-20

34 34

Labels & tags print packaging overview

Print packaging segments: Labels & tags

Labels and tags print packaging ranks fourth among the four main packaging segments in terms of

size and second in terms of projected growth.

The total labels & tags print packaging



Revenues for labels & tags print


5.4% per year in 2011–15 in local


in 2016–20.

5.2% $34.6

Labels & tags will grow strongly in

2016–20 as demand for shorter runs

increase. The more competitive market

environment also fosters opportunities

for consolidation and new entrants.

27 28 28 29 29 29 30 31 33 35

4%

5%

6%

0

10

20

30

40

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Billi

on

s



Source: EIU.

Forecast

Labels & tags print packaging size and growth in 2011-20 (US$)

35 35

Labels & tags: Trends and products


With the continued rise of digital printing and more applications of SKUs to final products, the labels

and tags segment stands at the forefront of many print packaging companies’ core product offerings.

Key trends

Costly prepress services, such as purchasing plates and tooling, are

significantly reduced with the use of digital printers and laser cutting, which

are better for shorter printing runs for small-batch and varied products.

Environmental concerns over paper and plastics have also increased

demand for labeled-packaged products.

Many personal and home care products (such as toothpaste and

detergents) are shifting packaging vessels from flexible to PET

bottles, which use labels & tags.

The shift of manufacturing away from China to other cheaper labor

markets (such as Vietnam) in South-East Asia will affect labels & tags, as

clothing and textiles (tied to labels & tags), are the most likely industries to

move to those countries.

Millennials are highly educated, health conscious and have easy access

to fresh produce, demanding products that stray from traditional

consumer packaged goods that use in-mold glue-applied or transfer

labels as print packaging substrates, which could mute labels & tags growth.

Print packaging companies are focusing on wraps and sleeves as the

fastest-growing types, owing to their ability to be printed for short runs and

the greater printable surface area compared with other types of print

packaging.

Key products

Soup cans, bottled beverages, clothing.

36 36

The smallest segment is a fast-growing market, expected to expand on average 5.2% per year from

2016-2020, on par with the growth of the flexible segment.

Labels & tags: Top markets


0

2

4

6

8

10

12

14

2015 2016 2017 2018 2019 2020

Bill

ion

s

Germany India Japan China US

Forecast


Source: EIU.

Labels & tags print packaging in the top 5 markets in 2015-2020 (US$)

Bottom 21 21.1%

India 6.3%

Germany 4.5%

Japan 8.5%

US 33.1%

China 26.5%

Top 5 78.9%

Labels & tags share of the top 5 markets


Source: EIU.

0.3%

0.9%

1.5%

2.1%

2.3%

2.4%

2.4%

2.7%

2.7%

3.3%

3.7%

3.8%

3.9%

4.6%

6.1%

6.2%

6.3%

6.4%

6.9%

7.2%

7.7%

8.8%

10.4%

10.4%

10.5%

12.6%

UK

Japan

France

Poland

Netherlands

Italy

Russia

Canada

Germany

Australia

South Korea

US

Saudi Arabia

Brazil

Mexico

Turkey

Chile

China

Colombia

Philippines

South Africa

Iran

Vietnam

Nigeria

Indonesia

India


Source: EIU.

Labels & tags growth rates in 2016-20

37 37

The “others” segment comprises around 6.7% of the total print packaging market across the 26

countries in 2015.

Other print packaging overview

Print packaging segments: Others

Revenues for other print packaging

expanded at an average 5.4% per year

in 2011–15 in local currency terms and

will increase 5.2% in 2016–20.

5.2%

The total other print packaging market

size in 2015 is $16.3bn. By 2020, it is

expected to reach $19.4bn.

$19.4

15 16 16 17 16 17 17 18 18 19

4%

5%

6%

7%

0

5

10

15

20

25

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Billi

on

s



Source: EIU.

Forecast

Other print packaging size and growth in 2011-20 (US$)

38 38

Others: Trends and products


The others segment is primarily composed of beverage cans and rigid plastics that are directly printed

on. Market growth is relatively stable, tracing broader economic and demographic trends.

Key trends

The largest part of this market, beverage cans, is

relatively mature and growth follows demographics

and GDP. Consumers perceive beverage cans to

be more recyclable than other types of packaging

for beverages, so eco-friendliness trends are

positive for the market.

Many also perceive cans to be better for colder

drinks (e.g., beer), but some have health

concerns as the can opening is more exposed to

the environment (this is particularly the case in

emerging markets where health and sanitation

risks are more prominent). To address this issue,

some packagers put lids on the beverage cans for

protection.

Direct printing on rigid plastics is in many markets

a relatively new and expensive technique. While

there is room for growth, its size is still relatively

small.

Key products

Beer and soda cans, plastic bottles and containers

for cosmetics or beverages.

39 39

The smallest market in our study will become even smaller, shrinking from 6.7% of the print

packaging market in 2015 to 5.8% in 2020.

Other print packaging top market


0

2

4

6

8

10

12

14

2015 2016 2017 2018 2019 2020

Bill

ion

s

UK India Japan China US

Forecast


Source: EIU.

Other print packaging in the top 5 markets in 2015-2020 (US$)

Bottom 21 14.7%

UK 3.1%

India 7.1%

Japan 8.9% China

32.6%

US 33.7%

Top 5 85.3%

Other share of the top 5 markets


Source: EIU.

1.2%

0.8%

1.9%

1.9%

2.7%

2.3%

3.2%

2.6%

2.8%

2.5%

3.5%

4.1%

3.8%

4.7%

5.8%

5.9%

6.3%

6.0%

7.0%

7.5%

7.6%

8.5%

10.2%

10.2%

10.5%

12.4%

UK

Japan

Italy

France

Russia

Netherlands

Germany

US

Canada

Poland

Australia

Saudi Arabia

South Korea

Brazil

Chile

China

Mexico

Turkey

Philippines

Colombia

South Africa

Iran

Vietnam

Indonesia

Nigeria

India


Source: EIU.

Other segment growth rates in 2016-20

Drivers of change:

Industry and external

41 41

There are a number of key trends within the print packaging industry that are shaping the outlook for

the market.

Drivers of change: industry dynamics


Digital printing is quickly gaining ground in the print packaging industry, as short runs become more common and its applications increase.

Smart packaging is becoming more widespread as brand owners aim to ensure safety and quality control, and to prevent product counterfeiting.

Technology

innovations

Consumers are becoming more interested in sustainable and green products.

Manufacturers are responding by targeting packaging design and construction methods and using less materials in their packaging. This increases their margins and at the same time addresses the shifting consumer preference in favor of sustainable goods.

Environmental and

sustainability concerns

Regional sourcing and localization have emerged as print packaging companies invest in cost-cutting measures to improve resiliency to political and economic shocks.

Cost-cutting

to improve

resiliency

Local brands are growing fast as consumer preferences shift towards craft, customized products.

This supports short-run, localized production by vertically-integrated print packaging companies, and the provision of consultancy services by print packaging companies.

Rise of

small-batch

products

Consumers are rebelling against traditional, marketing-led consumerism and are seeking more product differentiation.

This presents opportunities for the print packaging industry to become more integrated into strategic, segmented areas of the value-chain.

Product

differentiation

42 42

Advances in technology and changes in consumer behavior will continue to have profound impacts

on the print packaging industry.

Technology innovations


Digital and 3-D printing are two rapidly growing areas of print technology, primarily in the US, Europe and Japan as well as other developed markets. New equipment and machinery allow companies to print more efficiently on various surfaces with far fewer costs. Digital printing, best for short, good-quality printing runs, accommodates those consumers demanding a more diversified array of products. This is already disrupting the industry, as the demand for mass produced print packaging from long runs stall, giving way to customized packaging from short runs. Developed markets, especially in Europe and North America, are the leading digital print packaging markets, but strong growth will come from the Asia-Pacific region.

Digital print packaging will account for 3-5% of total print packaging by 2020. Labels & tags dominate the digital print packaging industry accounting for 75-85% of all digital print packaging revenues, but this is changing as new equipment designed for folding carton, corrugated, flexible as well as rigid plastics and metal packaging gain space in the market. As non-label digital print packaging will be coming from a low base, expect dynamic growth of those segments in the near future.

3-D printing is used in the packaging industry during the development and conceptualizing phases, as it is best for constructing prototypes at a fast turnaround in low volumes for brand owners. 3-D prototypes are used for consumer testing, marketing studies and design reviews.

Machine-to-machine communication and other Internet of Things (IoT) solutions will allow for higher productivity and faster turnaround of printed products. Most, if not every, device in the printing operation will be on the IoT grid, streamlining the printing and converting process by, for example, monitoring and replenishing ink and substrate supply, and identifying and resolving any troubleshooting automatically.

43 43

Brand owner and print packagers will incorporate more smart packaging into their product portfolio,

as it adds value to the consumer and the product.

Technology innovations


Intelligent packaging communicates extra information than what is printed on the box, bag or label, specific to the actual product in the package via a personal mobile device or on the packaging itself. It monitors the condition of the product, informing the consumer about its quality, safety, and authenticity.

Time-temperature indicators (TTI), an intelligent packaging technology primarily attached to food and beverage products and produce, indicate to consumers when goods have been exposed to harmful temperatures. Self-adhesive labels, a significant component of the $28.5bn labels & tags market in 2015, can be affixed to shipping containers and individual packages to track temperature fluctuations, helping reduce food waste. While some in the industry have incorporated this technology, increased regulations would ensure that this feature is used in all packaging for products at risk.

While it has been in the market for many years, the use of coding and marking technology has been widening, as it helps protect brands, signal authenticity of the product and reduce the risk of counterfeit products reaching end-users. Furthermore, the increasing need for accurate data computation, tracking, and storage has also helped growth of codes and marking, as they facilitate identification and tracking of packages.

While also considered smart packaging, active packaging is different, as it interacts with the product itself. Active packaging can preserve and protect the product better than a conventional package as well as add interaction between the product, the consumer and the producer. For example, pharmaceuticals and health care professionals can use active packaging to monitor whether the patient is taking the correct dosage of a medication at the appropriate times, as the packages could have sensitive seals that communicate signals via the internet (cloud).

44 44

There is a strong focus on designing and creating printed packaging products that meet the

environmental and sustainability standards of consumers and regulators. This trend is primarily

occurring in developed markets like the US and Europe.

Environmental and sustainability concerns


Sustainability and environmental packaging has been a growing

concern for consumers, particularly in developed markets. The

industry wants to drive more sustainable packaging, but this has

been hampered by the lack of a standard definition as to what

constitutes sustainability or eco-friendliness. Sustainable packaging

can come in many forms, from biodegradable plastics for flexible

packaging to the highly-recyclable folding carton paperboard.

Packaging is perceived as both a positive and negative in the supply

chain. While packaging protects the goods and products that

consumers need and want, it can also be harmful due to the

materials and waste it produces. This “packaging paradox”

continues to drive the sustainability discussion as companies

must choose the most environmentally-conscious substrates—paper

or plastic—as well as inks and processes. Print packaging

companies’ efforts are measured by the resources that go into

manufacturing and printing on products, as well as the emissions of

the machinery and equipment used to produce the products.

Companies are figuring out creative ways to reduce package

weights, also known as lightweighting, without compromising the

strength and durability of the package; therefore, reducing waste.

Printers and converters are incorporating these trends into their

business models by designing packages with a strong focus on

sustainability, from sourcing of materials to the end-of-life of the

package and recycling.

Life cycle of a

printed package

From the sourcing of materials to the disposing of

the used package, the industry is concerned about

making print packaging more sustainable.

45 45

Regional sourcing and localization have emerged as print packaging companies address

differentiated consumer preferences, concerns of supply-chain sustainability, and focus on cost-

cutting to improve resiliency to political and economic shocks.

Regional hubs and localization


The industry is moving away from centralized global

production and packaging hubs, and towards more regional

sourcing and localization models.

Differing regulations within a region also influence

business decisions to concentrate production in a specific

location. Consumer demand for packaged goods is variable

depending upon local and regional preferences and

needs (e.g. cereal products preferred in folding cartons vs.

flexible pouches).

Companies are also increasingly focused on sustainability

of supply chains, in terms of both reducing emissions-

intensity of production, but also from an operational risk

perspective: shorter supply chains reduce the risk of

unanticipated interruption.

High transportation and shipment costs of raw materials,

including paper, plastics, and other substrates, to foreign

markets are driving large print packaging companies to

develop or purchase local distribution and operations hubs.

This allows for companies to focus on internal cost-cutting

measures and ensure profitability.

This shift towards regional hubs is illustrated by re-shoring

some multinational operations from China back to the

US (where a large market of discerning consumers is based)

as well as countries with lower labor costs, such as Vietnam.

Differentiated consumer

preferences

Sustainability

Shipment costs

46 46

Instead of using a third-

party print packaging

company, more firms are

doing the printing and

packaging in-house.

Some multinational

corporations are building

local plants so that they can

directly deal with the local

consumers.

Smaller companies do not

have dedicated print

packaging teams, so some

companies offer expert print

packaging consultancy

services.

Big-brand products will continue to dominate the market, but smaller-batch, local products are growing

rapidly. Demand for customized, short-run print packaging will increase, which will prompt print

packaging companies to adapt to this shift both in terms of technology and efficiency.

Rise of small-batch products


Changing consumer

preferences for smaller-

batch, craft products

Shorter print

packaging runs

Localization

Verticalization

Value-added consultative

services

Market driver

of change

Effect on

print packaging

Print packaging

industry response

Not only are smaller, local

companies multiplying, but

manufacturers in general are also

introducing a wider variety of

products.

Companies are producing several

different types and variations of the

same product, which also require

shorter print packaging runs.

People are

consuming more

craft products whose

print packaging come

from shorter runs,

where digital printing

is increasingly the

preferred printing

method.

47 47

Consumers, particularly in developed markets, are shifting away from commoditized, homogenous

tastes. This presents an opportunity, because packaging can produce product differentiation.

Product differentiation


Consumers are rebelling against traditional, marketing-

led consumerism and are seeking more product

differentiation. There remains significant demand for

homogeneity, but there is movement toward market

fragmentation, shorter runs and a polarization of

consumers.

This shift in consumer behavior is particularly evident in

the mature, developed markets.

There is value for companies willing to enter the

rediscovery stage by differentiating their product

because consumers are willing to pay a premium for it.

This trends presents great opportunity for the print

packaging industry.

While packaging was traditionally viewed as functional,

packaging can change the perception of a product

and drive pricing. Packaging presents an opportunity to

create significant value for consumer packaged goods,

through innovations and design advances that help to

differentiate brands and boost sales, as it

communicates with the consumer at the point of sale.

Print packaging companies that are able to offer end-to-

end solutions for clients, integrated into the strategy

design and product marketing stage of the value-chain,

will be well-placed to benefit from this trend.

The J-curve describes how industries move from artisan, to mass

production, to homogeneity and finally to rediscovery in which

consumers value choice and quality over low prices.

Demand in the first three stages is influenced by economic

performance, demographic breakdown, and industry and trade

dynamics. During the homogeneity stage, cost/price is minimized, but

consumers are unsatisfied with a generic product. The rediscovery

stage occurs when consumers seek variety and premium products.

Pri

ce

Time

Artisan stage

Product made and sold

locally in small “factories”

(e.g., a bakery).

Mass production stage

Industry manufacturing

and national supply chain

leads to economies of

scale, driving higher

quality and lower

consumer prices.

Homogeneity stage

Maximum efficiency,

but also maximum

boredom—limited

choice. Consumers

get restless.

Rediscovery stage

Consumers demand more

choice and premium

products and are willing to

pay for them.

Rediscover artisanship

Services combined

with products

Quality over price

Democratization of

luxury

48 48

Packaging defines experience and enabling product pricing. Packaging can drive value and pricing

through two key avenues: existing experiences and new experiences.

Product differentiation


Existing New Experience

Revenue / Profit Low High

Brand competitive strategies

(Protect, Improve, Enable, Change)

driven through packaging design

Existing experiences are where the customer is familiar

with the product and its use. Packaging can be used to

protect the product at the lowest cost by improving the

experience. This typically does little to increase pricing.

New experiences are where the customer is unfamiliar

with the product or has a new use for it. Advances in

packaging design allow customers to use the product in a

new way by changing the frame of reference. A

successful example is Coca-Cola’s use of packaging to

drive value for its main product, Coke. Coca-Cola went

even further, as it made packaging more personal with

names on its labels and cans in its “Share a Coke”

campaign.

Packaging is an avenue for not only driving price, but also

changing the customer’s perception of the product.

Some formats carry conceptual baggage that is difficult

for consumers to overcome.

For example, a study conducted by Campbell’s packaging

department found that consumers perceived a product

packaged in a can to taste worse than the same product

packaged in glass.

There is an opportunity for printers to develop an

expertise in packaging solutions for consumer packaged

goods due to the lack of existing knowledge in the

industry.

Drivers of change:

Macroeconomic and demographic

50 50

Macroeconomic and demographic drivers underpin the outlook for the print packaging market in all


Macroeconomic and demographic drivers


Asia-Pacific is the economic success story, driven by India, Indonesia, China and Vietnam. Strong economics and favorable demographics underpin strong growth potential.

The US has continued its recovery; improved confidence is underpinning strong consumption and supporting growth. Europe, however, will maintain its muted recovery with the UK’s Brexit vote contributing to uncertainty and fragility.

Economic growth

Today, more people live in cities (54%) than in rural areas, and this will grow to 66% by 2050.

Urban dwellers have readier access to goods, and consume more print packaging than rural populations, and it is expected for this trend to accelerate as incomes rise.

Urbanization

The rise of the middle class in emerging markets, owing to rising incomes, will boost consumer expenditures, with print packaging standing as one of the big winners of this trend.

In developed markets, consumer expenditures will still grow, albeit at a slower pace.

Rising middle class

Protectionism is a growing concern around the world. The outlook for major trade deals, like the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), is less positive than earlier in 2016.

Nevertheless, trade flows will remain steady, supporting in particular the corrugated packaging market.

Global trade flows

In 2011-15, the US dollar appreciated strongly against most other currencies in the world, on the back of a stronger US economy, the prospect of higher interest rates against monetary loosening in other developed markets, and the softening of rapid growth in some major emerging markets.

The commodity price bust has also impacted currencies, in particular major commodity exporters like Australia and some emerging markets.

Exchange rates

51 51

Economic growth underpins growth of the print packaging industry across all countries. Emerging

markets face a more positive economic growth outlook than developed markets.

Economic growth


In developed markets, economic growth and print

packaging growth tend to move hand-in-hand as

more mature markets have less space to grow.

In emerging markets, print packaging growth

outpaces growth in the broader economy, as

economic development drives the expansion of the

middle class and a shift in preferences towards pre-

packaged foods and consumer goods, as a matter

of convenience.

In developed markets, the recession caused a

slowdown in purchases of consumer goods, with

customers switching to store-brand goods or cutting

expenses back altogether. Since this time,

developed markets have continued their muted

recovery; 2015 marked the first year since 2010

that the US, EU and Japan all experienced positive

economic growth at the same time. But the

economic growth outlook remains moderate.

The outlook for emerging markets is more

positive; the clouds that threatened to gather in

2015 and harm emerging markets have dissipated

as expectations of a US monetary tightening have

diminished and the US dollar’s rise has fallen.

0%

1%

2%

3%

4%

5%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Developed markets Emerging markets Overall average

Note: Dashed lines indicate forecasts. Developed and Emerging Markets growth are

for the 26 countries included in this study. Overall average is the average of all 26


Source: EIU.

Real GDP per head growth in 2011-2020

52 52

City living tends to lead to higher

consumption, with city economies based

on services (and manufacturing) rather than

agriculture, and with readier access to

shops and packaged goods. As

urbanization of emerging markets grow

from 51.5% in 2015 to 55.7% in 2020,

consumption will increase and in turn print

packaging will grow.

In China alone, urbanization of its

population will increase from 56% in

2015 to 65% in 2020, a nine percentage

point increase or 133.8m new city-dwellers.

On the other hand, growth of cities in

developed markets is stalling. While

population growth is lower, cities have

become overcrowded and people prefer to

live in the outskirts of cities and suburbs.

While emerging markets’ urban population

is expected to grow at an annual average

rate of 2.5% between 2015 and 2020, in

developed markets, the growth rate is at a

tepid 0.8%.

Urbanization is a key driver of growth in demand for print packaging products. Emerging markets

continue to experience more rapid urbanization rates than the developed, mature economies.

Urbanization


2.1 2.4

0

1

2

3

4

5

2015 2020

Bil

lio

ns

Urban population Population

Source: EIU.

Urbanization in emerging markets in 2015 and 2020

4.1 4.3

CAGR

2.5%

55.7% 51.5%

719 749

0

200

400

600

800

1,000

2015 2020

Mil

lio

ns

Urban population Population

Source: EIU.

Urbanization in developed markets in 2015 and 2020

884 904 CAGR

0.8%

82.8% 81.4%

53 53

Between 2015 and 2020,

emerging countries in total

will add 225m households

into the middle-income

bracket ($5,000–$50,000 pa).

This translates to more

consumers with more

purchasing power to spend on

consumer goods, with positive

implications for the print

packaging industry.

Developed countries, on the

other hand will decrease the

number of households in the

middle-income bracket, but will

lift 34m households into the

high-income bracket (earning

more than $50,000 pa), with

implications for the types of

higher-end products and goods

(and packaging) demanded in

those markets.

Consumer behaviors change as disposable incomes increase. The rise of the middle class in

emerging markets will translate into more consumers and growth for the print packaging industry.

Rising middle class


Households in developed and—to some extent—emerging markets are also shrinking, as families choose to have

less children. Smaller households could translate to more product differentiation within a family’s consumption basket,

in order to accommodate everyone’s preferences, tastes and habits.

225,772

588,845

214,161

95,577

17,477

11,377

354,770

497,888

145,577

60,565

11,081

6,600

0 200,000 400,000 600,000

< US$5,000

US$5,000 – US$15,000

US$15,000 – US$25,000

US$25,000 – US$50,000

US$50,000 – US$75,000

> US$75,000

2015 2020

Source: EIU.

Number of households by income

range in emerging markets in 2015

and 2020 ('000s)

1,060

21,524

36,786

112,923

82,438

123,425

1,510

27,046

40,239

118,858

74,206

102,553

0 50,000 100,000 150,000

< US$5,000

US$5,000 – US$15,000

US$15,000 – US$25,000

US$25,000 – US$50,000

US$50,000 – US$75,000

> US$75,000

2015 2020

Source: EIU.

Number of households by income

range in developed markets in 2015

and 2020 ('000s)

54 54

Global trade supports a robust consumer and packaged goods market, underpinning demand for print

packaging. After several years of strong trade flow growth, the outlook is steady though moderate.

Global trade flows


Changing international trade patterns will continue to

transform the global economy. High-growth markets,

particularly in Asia-Pacific, continue to have the fastest

growing exports. Strong global trade and export flows

support robust print packaging demand, in particular in the

corrugated segment.

After several strong years of growth in goods trade globally

(annual growth averaging over 4%), the trade outlook has

moderated. Growth in global goods trade flows is expected

to average around 2% per year to 2020.

Growing discontent with the consequences of globalization

and free trade in OECD countries has fueled populist

politicians, boosting protectionist rhetoric and policies.

In the face of these headwinds, and following the UK

referendum result, it will prove difficult to ratify trade

agreements. The Transatlantic Trade and Investment

Partnership (TTIP) is likely to be delayed until after the

2016-2020 forecast period, and other trade agreements will

also face delays.

EU economic sanctions against Russia over the Ukraine

conflict has hurt trade in Central & Eastern Europe. Russia

instead is turning to strengthening commercial ties with East

Asia.

Nevertheless, trade flows will remain steady, supporting in

particular the corrugated package market.

-2%

0%

2%

4%

6%

8%

10%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Developed markets Emerging markets

Overall average

Trade in goods in 2011-2020 (% annual change)

Note: Dashed line indicate forecasts.

Source: EIU.

55 55

In 2011-15, most currencies weakened strongly vis-à-

vis the US dollar, owing to low commodity prices, political

uncertainty and instability, and fiscal and debt crises.

More recently, the expected monetary tightening of the

US Federal Reserve has compounded on the

strengthening of the dollar as the US economy picks up

after years of slow growth. While tightening expectations

have eased somewhat in the wake of the Brexit vote, the

Federal Reserve will likely resume rate rises in 2017, with

potential implications for emerging market currencies and

therefore print packaging growth.

China’s yuan is slowly becoming a more internationalized

currency, with the government opening bond markets to

foreign institutions and shifting to a slightly more market-

oriented exchange rate. In October 2016, the International

Monetary Fund (IMF) added the yuan to the basket of

currencies that form the Special Drawing Right currency

basket, a unit of account, an important stepping stone that

signals the growing influence of the country on the

international financial stage.

A significant amount of print packaging is geared towards

the internal market, though there is some print packaging

that is exported, and corrugated is a segment that is

particularly impacted by external forces.

Besides impacting our US$-term print packaging estimates and forecasts, the weakening of global

currencies around the dollar has influence on trade flows and output of highly integrated economies.

Exchange rates


40

50

60

70

80

90

100

110

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

EUR CNY INR

MXP BRL COP

Note: Dashed lines indicate forecasts.

Source: EIU.

Exchange rate growth of select currencies to the US

dollar in 2011-2020 (index 2011 = 100)

Recommendations

57 57

The EIU identified four overarching recommendations for print packagers, converters,

brand owners and input manufacturers (equipment, inks and substrates).

Recommendations

Recommendations

Invest in key

country markets

Seek value along

the supply chain

Stay ahead on

green packaging

Keep up with

trends and

technologies

Add consulting to the menu of products and services.

Continue development of machine-to-machine technologies.

Lightweighting of packages makes them cheaper to ship and manufacture.

Create internal regulatory and quality assurance teams to monitor their product.

Customized and short-run print packaging is on the rise, and print packagers will be using more digital print packaging going forward.

Adopt more smart packaging for your products.

While developed markets are stable and will continue to play

a big part in the industry, emerging markets are where

growth will be concentrated in the 2016–20 period.

Emerging markets will add $24bn of the $44bn additional

revenue to print packaging between 2015 and 2020.

Consumers are not only

looking for a recyclable product

and package, but a reduced


production.

Governments will strengthen




packaging globally.

58 58

The identification of key country markets ripe for investment depends on the priorities and regional focus of the

investor. The EIU identified below the top four country markets in our study and how they rank among their group

(emerging and developed markets) and across different criteria.

Invest in key country markets

Recommendations

Do

lla

r g

row

th

% g

row

th

De

ve

lop

ed

E

me

rgin

g

De

ve

lop

ed

E

me

rgin

g

Growth and

added value

Top markets by percentage

growth (CAGR 2016–20) and

dollar growth (US$bn in 2016–20)

in our study

Business

environment

Business Environment Rating by

the EIU of the top emerging and

developed markets in our study

(score 0–10; 10 is best)

Operational

risk

Operational risk scores by the

EIU of the top emerging and

developed markets in our study

(score 0–100; 0 is best)

India (12.4%)

Nigeria (10.5%)

Indonesia (10.2%)

Vietnam (10.1%)

Mexico (8.2)

Chile (7.6)

Brazil (6.1)

Turkey (6.2)

Chile (22)

Saudi Arabia (40)

China (43)

Colombia (43)

China ($15.2bn)

US ($10.7bn)

India ($6.8bn)

Japan ($2.9bn)

US (8.3)

Canada (8.2)

Australia (8.1)

Germany (8.1)

Australia (13)

Canada (15)

Netherlands (19)

US (19)

59 59

Seek value along the supply chain

Recommendations

Print packaging value chain

The design and concept

of a print package

Package reaching

the consumer

Production, printing

and converting

Consulting services Packaging is a strategic tool for brand owners,

because it is the first point of contact with the

consumer.

Brand owners need support in designing and

conceptualizing how their product will be presented

to the consumer.

While there are specialized consulting companies,

print packagers can enter this space by providing

consulting services, as they already have the

expertise to support brand owners early in the value

chain.

Machine-to-machine and IoT Machine-to-machine communication and other

Internet of Things (IoT) solutions will allow for higher

productivity and faster turnaround of printed

products.

While this technology is still under development by

equipment manufacturers, its potential of

streamlining the printing and converting process can

disrupt the industry, and companies must be at the

forefront of this trend.

60 60

Seek value along the supply chain

Recommendations

Print packaging value chain

The design and concept

of a print package

Package reaching

the consumer

Lightweighting Aiming not to compromise the package’s strength and

durability, lightweighting reduces the material used on a

package.

Brand owners can market their products as being more

environmentally friendly.

Print packagers and substrate producers use less

material, reducing costs.

Distributors can ship packaged goods in higher

volumes at lower costs, since they take up less space

and are lighter.

Quality assurance In 2005, Nestlé recalled 30m liters of its baby formula

because traces of isopropyl thioxanthone (a photoinitiator from printing inks) were found in the product, as it migrated through the cartons and tainted the product. This incidence instigated a series of regulations around print packaging and inks.

More monitoring and accountability is needed throughout the supply chain. This is an opportunity for print packagers and converters to step up and own this part of the supply chain and create internal regulatory and quality assurance teams to monitor their products.

Production, printing

and converting

61 61

As consumers and markets become more sophisticated and wealthier, the

demand for more product differentiation and customization increases.

This in turn increases the demand for short runs in print packaging, which

is the niche of digital printing. Brand owners can use digital printing to

target consumers by their location (e.g., locally grown produce), their

mood (e.g., Snickers’ “Hunger Bars” campaign), and even their names

(e.g., Coca Cola’s “Share a Coke” campaign).

The next step for the industry is the further advancement and

popularization of digital printing in other segments, such as flexible,

folding carton and corrugated print packaging. While digital printing for

flexible and folding carton is ahead, corrugated digital printing is still

nascent and sparsely used. Equipment manufacturers should continue

advancing the technology for corrugated, flexible and folding carton digital

printing, making them more efficient and affordable.

Smart packaging is the next step for the print packaging industry, as it

can ensure quality by preserving the product better or it can increase

transparency by conveying extra information to the consumer. Brand

owners should be prepared to incorporate the next generation of

smart packaging into the consumer experience and print packagers

should expand their portfolios to offer the latest smart packaging.

Smart packaging can come in the form of labels that let consumers know

whether the product has been exposed to a harmful environment, or

packaging materials that slowly release chemicals preserving the product

and extending its shelf life, or packages that connect to the cloud, storing

information and communicating between the product and the

manufacturer. New applications are constantly being developed, so the

industry must be up to speed on this technology.

Keep up with trends and technologies

Recommendations

62 62

Many brand owners, printers and converters are already ahead of regulation when it comes to environmentally friendly

practices. The trend is for governments and their agencies to strengthen environmentally friendly packaging regulations.

Print packagers should stay ahead of the curve, as consumers are increasingly demanding more environmentally

friendly packaging. Furthermore, green packaging could cut costs as it aims to reduce weight, therefore using less

material and making it cheaper to transport.

Stay ahead on green packaging

Recommendations

Consumers are not only looking

for a recyclable product and

package, but a reduced


production.

Packaging paradox:

Packaging is perceived as both

a positive and negative in the

supply chain. While packaging

protects the goods and

products that that consumers

need and want, it can also be

harmful due to the materials

and waste it produces.

Governments and their

agencies will strengthen




packaging globally.

Regulations and definitions

concerning green packaging

differ across countries and

countries have been going

green at different paces.

Companies are creating ways

to reduce package weights

(i.e., lightweighting) without

compromising the strength and

durability of the package,

thereby reducing waste and

costs.

Printers and converters are

incorporating these trends into

their business models by

designing packages with strong

focus on sustainability, from

sourcing of materials to the end

of life of the package and

recycling.

Changing demand Changing

regulations

Changing input

supply

Deep dives

64 64

The EIU has examined six markets in more detail, representing a selection of large and

high potential markets across different regions.

Deep dive overview

Deep dive

The largest print

packaging market in the

world will grow steadily in

era of thinning profit

margins and consolidation.

US

The Mexican economy

and print packaging

market will grow at a

healthy rate, despite being

strongly tied to the US.

Mexico

Growth will be muted in

Germany owing to the

already developed market

and uncertainties around

the EU Brexit vote.

Germany

The fastest-growing print

packaging market in our study

gained 3 positions since 2011

from 8th to 5th largest in 2016.

India

The second

largest market in our study will

grow strongly over 2016-20 and

narrow the gap with the US.

China

Indonesia, like India, is a high

growth and high potential market.

Indonesia

United States

Deep dive

66 66

The US print packaging industry

is being driven by a stable US

economy and increasing

disposable incomes. In 2015,

US print packaging companies

generated $76bn, up from $69bn

in 2011.

The US is currently the largest

print packaging market in our

study. It will keep its leading

position in 2020, but China

quickly narrowing the gap.

Besides facing demographic

changes in the transition from

baby boomers to millennials,

companies seeking stable growth

are adapting to changes in

consumer demand, raw material

costs passed down the supply

chain, global economics, and

safety/environmental concerns,

among other external influences.

Adaptation to these changes will

separate winners from losers.

With consolidation and thinning profit margins, the US print packaging industry is forecast to grow at a

steady but moderate 2.6% average annual rate over the next five years.

US: Overall and key takeaways

Deep dive: US

24 27

10 11

11

12

28

29

6

7

0

10

20

30

40

50

60

70

80

90

100

2016 2020

Bil

lio

ns


Corrugated Other

Print packaging market by segment in the

US in 2016 and 2020 (US$)

Source: EIU.

78 87

CAGR

2.6%

2.6%

2.6%

1.7%

2.4%

3.8%

3.4%

2.6%

2.6%

1.7%

2.4%

3.7%

3.3%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth in the US

Note: Figures presented are compound annual

growth rates in local currency terms.

Source: EIU.

67 67

US: Current dynamics and trends

Deep dive: US

US

macroeconomic indicators 2015 2016 2017 2018 2019 2020

Population (m) 321.3 323.9 326.5 329.3 332.0 334.6

GDP (% real change pa) 2.4 1.8 2.2 2.3 1.1 2.1

Consumer prices (% change pa; av) 0.1 1.3 2.2 2.3 1.3 1.7

Private consumption per head (US$) 38,190 39,420 40,950 42,410 43,040 44,460

Source: EIU.

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

0

10

20

30

40

50

60

70

80

90

100

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns

Flexible Labels & tags Folding carton Corrugated Other US growth (%) North America growth (%)

Print packaging market size by segment in the US in 2011-2020 (US$)

Forecast

Note: Regional and all countries growth is a simple average of growth rates.

Source: EIU.

68 68

US: Forecast dynamics and outlook

Deep dive: US

US consumers are buying from a wider variety of brands and are focusing more on health and wellness,

according to interviews with industry experts. For the print packaging market, this translates into a shift towards

shorter runs of labels & tags and flexible printing. Labels & tags will benefit from the continued rise of small-

batch beverages (e.g., craft beers and cold-pressed juices) and will be the fastest-growing segment in the US at

3.8% in 2016–20. Flexible packaging, which is being increasingly used for a wider variety of applications (e.g.,

baby food and cereal), will be the second-fastest segment and grow 3.4% in 2016–20.

Folding carton print packaging growth is expected to be muted as consumer preferences shift towards flexible

packaging solutions over the next five years.

The corrugated print packaging segment forecasts show the largest revenues at $29.5bn in 2020, maintaining its

position as the largest sales volume generator of the print packaging segments.

US total print packaging revenues are forecast to reach US$87bn by 2020, growing at an average

annual rate of 2.6%, exceeding real GDP growth since 2011.

0%

1%

2%

3%

4%

5%

2012 2013 2014 2015 2016 2017 2018 2019 2020


Segment growth in the US in 2012-2020

Note: Growth in local currency terms.

Source: EIU.

Forecast US business cycle

recession Other 7.5%

Corrugated 34.0%


Labels & tags

13.2%

Flexible 31.5%

US print packaging segments market share in 2020

Source: EIU.

69 69

Print packaging in the US is generally a very narrow-margin industry, so consolidation is the preferred

way for large printers and converters to grow.

US: Print packaging highlights

Deep dive: US

Consolidation in the US market is high, with large mature US

companies purchasing smaller operations to meet localized

demand, expand market share and increase profits, as the

industry generally enjoys very narrow margins and consolidation

is the preferred source of growth of larger companies.

Fewer consumers are buying from one or two dominant brands

today, creating demand for numerous, shorter print runs with

better graphics—an area where digital presses will be

considered the best-suited technology. The US is leading the

digital revolution as new print technologies allow for economic

and time savings for printers and converters, and in turn

manufacturers.

Sustainability standards around packaging materials are

driving companies towards low-cost materials and better

efficiencies to maintain already thinning profit margins.

Lightweighting of products, e.g. PET bottles, packaging

variation, and intelligent packaging applications, allowing for

temperature control and added security features, are driving

growth in the US print packaging market.

There is an increasing demand for luxury packaging and eco-

packaging solutions as income growth and real personal

disposable income reaches its highest rate in the US in five

years in 2015.

Based on US income distribution,

consumers will retain a preference for mixing

selected high-end consumer goods purchases

with many cheap or own-brand goods.

0 50,000 100,000

< US$5,000

US$5,000 – US$15,000

US$15,000 – US$25,000

US$25,000 – US$50,000

US$50,000 – US$75,000

> US$75,000

2016 2020

Number of households by income range in the

US in 2016 and 2020 ('000s)

Source: EIU.

70 70

US: Key segment analysis

Deep dive: US

Second-strongest growth of all four

segments due to solid consumer

expenditure growth in 2016–20

and the increasing variety of new

flexible packaging applications

in the food and beverage space,

from baby food to condiment stand-

up pouches.

Intelligent packaging and

security applications, which are

generally technologies applied on

flexible packaging, will also lift

growth of flexible packaging in

2016–20.

Strong growth owing to the rise of

digital printing and the increasing

demand for shorter printing runs

for small-batch and varied

products.

However, millennials are highly

educated, health conscious and

have easy access to fresh produce,

demanding products that stray

from traditional consumer

packaged goods that use in-mold

glue-applied or transfer labels as

print packaging substrates, which

could mute labels & tags growth.

0%

1%

2%

3%

4%

5%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Flexible growth Total growth GDP (% real change pa)

Flexible

Stable

outlook

Note: Print packaging growth is in local currency terms.

Source: EIU.

Forecast

CAGR 3.4%

0%

1%

2%

3%

4%

5%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Labels & tags growth Total growth GDP (% real change pa)

Labels & tags

Stable

outlook


Source: EIU.

Forecast

CAGR 3.8%

71 71

US: Key segment analysis

Deep dive: US

In spite of being a saturated

market, corrugated will continue

to grow at a moderate pace as

e-commerce gains ground

owing to increasing accessibility

through mobile devices,

competitive prices and fast

shipping.

Corrugated is traditionally a

lower value-added segment,

but it is innovating and using

new technologies, such as

printing QR codes on consumer

boxes.

Moderate growth is projected,

driven by retail sales growth and

real GDP, which are growing

2.4% and 1.9% on average in

2016–20, respectively.

Flexible packaging offers a

substitute but folding carton

showcases better sustainability

and recycling standards with

paperboard.

0%

1%

2%

3%

4%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Folding carton growth Total growth Retail sales growth (% pa)

Folding carton

Stable

outlook


Source: EIU.

Forecast

CAGR 2.4%

0%

1%

2%

3%

4%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Corrugated growth Total growth Retail sales growth (% pa)

Corrugated

Stable

outlook


Source: EIU.

Forecast

CAGR 1.7%

China

Deep dive

73 73

The print packaging industry in

China grew at a 7.9% annual

rate in local currency terms in

2011-2015, a rapid pace

particularly given its large market

size of $69bn. Growth is

expected to moderate to a still-

strong rate of 5.9% per year over

2016-2020 (in local currency

terms).

China’s corrugated print

packaging segment is the

largest in the world partly

because of its export-dominated

economy. Corrugated accounts

for $29bn of the print packaging

total revenue in 2016. By 2020,

this number will grow to $35 bn.

The rising middle class will

continue to support China’s

consumer market. Print

packaging growth, however, will

slow down as manufacturing

moves to cheaper labor markets

in South-East Asia.

The second largest market in our study will grow strongly over 2016-20 and narrow the gap with the

US, the largest print packaging market.

China: Overall and key takeaways

Deep dive: China

5.9%

5.9%

5.8%

5.4%

6.4%

6.4%

7.9%

7.9%

7.4%

7.9%

8.6%

8.9%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in China



Source: EIU.

12.3 15.3

7.4 9.2

15.0

18.0

28.7

35.0

5.2

6.3

0

10

20

30

40

50

60

70

80

90

2016 2020

Bil

lio

ns


Corrugated Other

Print packaging market by segment

in China in 2016 and 2020 (US$)

Note: Compound annual growth rate in US dollar terms.

Source: EIU.

68.5 83.8

CAGR

5.2%

74 74

China: Current dynamics and trends

Deep dive: China

China


Population (m) 1,361.0 1,366.0 1,371.0 1,375.0 1,379.0 1,382.0




Exchange rate LCU:US$ (av) 6.23 6.65 6.93 7.10 7.04 6.84

Source: EIU.

0%

2%

4%

6%

8%

10%

0

100

200

300

400

500

600

700

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns

Flexible Labels & tags Folding carton Corrugated

Other China growth (%) Asia-Pacific growth (%)

Forecast


Source: EIU.

Print packaging market size by segment in China in 2011-2020 (in Chinese yuan)

75 75

Private consumption remains the strongest driver of the economy, despite a cooling in activity since 2015. In the

long term, the outlook for the print packaging industry remains relatively bright, despite the expected

slowdown in economic growth.

Manufacturing, including print packaging, is shifting away from China and moving to cheaper markets in

South-East Asia, such as Vietnam. China has achieved rapid economic growth through its large and cheap labor

market to produce packaged consumables, like toys (tied to folding carton and flexible), clothing (labels & tags) and

electronics (corrugated).

However, rising wages and input costs, as well as more complex value chains, have undercut the

competitiveness of the country's manufacturing sector. While it will continue to be a major manufacturing hub,

growth will slow down in 2016-20, which will reflect on the print packaging industry.

China’s market will continue to grow strongly, though the pace will moderate as the market matures.

The shifting global manufacturing supply-chain is also affecting China’s print packaging market.

China: Forecast dynamics and outlook

Deep dive: China

Other 7.5%

Corrugated 41.8%


Labels & tags

10.9%

Flexible 18.3%

China print packaging segments market share

in 2020

Source: EIU.

0%

2%

4%

6%

8%

10%

12%

2012 2013 2014 2015 2016 2017 2018 2019 2020


Segment growth in China in 2012-2020


Source: EIU.

Forecast

76 76

Even though it is the second largest market in this study,

according to experts, the print packaging industry in China is

antiquated, as a lot of the machinery used there is old (about

10-20 years old). This means that the Chinese print packaging

industry cannot keep up with the quality of printing that is going

in the world. This is particularly true for corrugated machinery.

Folding carton machinery in China are relatively more modern,

since folding carton is very closely related to goods like toys, and

electric appliances which are exported to more sophisticated

markets. Therefore, there is a greater push for folding carton

to keep up with the print packaging trends, technologies and

demand.

Furthermore, folding carton is also associated with the

production of luxury goods and cigarettes, both of which are

huge in China. However, while luxury goods are expected to

continue growing strongly, cigarette sales could be taking a

turn. In 2015, China saw a decline in volume sales for the first

time since 1995.

China is already the world's largest e-commerce market,

which is reflected by the large corrugated segment. In 2015

online shopping accounted for 12.9% of total consumer goods

retail sales. In the first five months of 2016 online sales slowed,

but growth still remained impressive at above 25%.

With the exception of folding carton, China tends to lag other countries in terms of innovation and

early adoption of new print packaging technologies.

China: Print packaging highlights

Deep dive: China

0 100,000 200,000 300,000

< US$5,000

US$5,000 – US$15,000

US$15,000 – US$25,000

US$25,000 – US$50,000

US$50,000 – US$75,000

> US$75,000

2016 2020

Number of households by income range in

China in 2016 and 2020 ('000s)

Source: EIU.

The growth of the middle-class in China

will remain strong, but it will slowdown as it

reaches new highs. The number of

households earning more than $15,000 pa will

increase to 170m in 2020, from 115.2m in

2016.

77 77

China: Key segment analysis

Deep dive: China

Unlike other emerging markets

where flexible is the largest

segment, in China flexible is only

the third largest segment.

In 2016-20 the flexible segment will

grow strongly as manufacturers

increasingly prefer flexible over

folding carton, as it uses less

material and are cheaper to

transport. However, it will not

narrow its gap to folding carton.

Many personal and home care

products (such as toothpaste and

detergents) are shifting

packaging vessels from flexible

to PET bottles, which use labels &

tags.

The shift of manufacturing away

from China to other cheaper labor

markets in South-East Asia will

affect labels & tags, as clothing and

textiles, which are tied to labels &

tags, are the most likely industry to

move to those countries.

0%

2%

4%

6%

8%

10%

12%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Flexible growth Total growth Private consumption (% real change pa)

Flexible

Positive

outlook


Source: EIU.

Forecast

CAGR 6.4%

0%

2%

4%

6%

8%

10%

12%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Labels & tags growth Total growth Private consumption (% real change pa)

Labels & tags

Positive

outlook


Source: EIU.

Forecast

CAGR 6.4%

78 78

China: Key segment analysis

Deep dive: China

Folding carton is a popular

packaging vessel in China largely

because it is associated with luxury

goods and cigarettes, both of which

are huge markets.

Luxury goods will continue to grow

as the income in China increases.

However, cigarettes will face

challenges in the coming years. For

the first time since 1995, sales of

cigarettes fell in China, signaling a

more health-conscious

consumer.

China’s corrugated segment is the

world’s largest, a reflection of its

export-oriented economy.

China is a very large and

fragmented corrugated market

with 4,000-6,000 converters,

according expert estimates.

Corrugated growth will remain

stable in 2016-20. While some

manufacturing will move to other

countries, e-commerce is growing

strongly owing to increasing

internet penetration and

urbanization.

0%

2%

4%

6%

8%

10%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Corrugated growth Total growth GDP (% real change pa)

Corrugated

Stable

outlook


Source: EIU.

Forecast

CAGR 5.8%

0%

2%

4%

6%

8%

10%

2012 2013 2014 2015 2016 2017 2018 2019 2020


Folding carton

Stable

outlook


Source: EIU.

Forecast

CAGR 5.4%

Germany

Deep dive

80 80

Following a period of weakness,

the print packaging market grew

in 2014 and firmed notably in

2015, with revenues rising by

2.7% in euro terms. Germany’s

print packaging industry

remains healthy and will grow

2.4% annually in 2016–20 (in

local currency terms).

Germany is currently the fourth-

largest print packaging market

in our study. By 2020, Germany

will drop to fifth position, behind

India.

Corrugated is Germany’s

largest segment, accounting for

35% of the print packaging

market. It is not, however, the

slowest growing. Labels & tags,

the smallest and slowest

segment, will pick up its pace to

2% per year in 2016–20, but still

behind corrugated, which is

growing at a 2.1% annual pace.

The outlook for the print packaging market in Germany is for steady, though moderate growth. The

market is mature and the domestic economy faces challenges from stagnant growth in many other

major EU countries, due to the high level of integration of the German economy with the rest of Europe.

Germany: Overall and key takeaways

Deep dive: Germany

3.6 4.2

1.4 1.6

4.7

5.5

5.3

6.1 0.4

0.5

0

2

4

6

8

10

12

14

16

18

20

2016 2020

Bil

lio

ns


Corrugated Other

Print packaging market by segment in

Germany in 2016 and 2020 (US$)


Source: EIU.

15

18

CAGR

3.8%

2.4%

3.2%

2.1%

2.6%

2.0%

2.7%

1.4%

1.4%

0.8%

1.6%

0.6%

2.3%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Germany



Source: EIU.

81 81

Germany: Current dynamics and trends

Deep dive: Germany

Germany


Population (m) 81.9 82.3 82.5 82.6 82.6 82.6





Source: EIU.

-2%

-1%

0%

1%

2%

3%

4%

5%

0

2

4

6

8

10

12

14

16

18

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns


Corrugated Other Germany growth (%)

Western Europe growth (%)

Forecast


Source: EIU.

Print packaging market size by segment in Germany in 2011-2020 (in euros)

82 82

Print packaging growth will remain stable over 2016–20, owing to modest retail sales as pent-up demand fades,

real disposable income growth eases and second-round effects related to Brexit uncertainty exert a modest

dampening effect on broader regional sentiment within the EU.

Since the recession, German consumers have generally become more frugal, softening spending on “non-

essentials”, such as clothing and electronics, which are tied to labels & tags and corrugated, respectively. On the other

hand, growth of food, beverages and tobacco, which are related to folding carton and flexible, is solid and will grow at

an annual average rate of 2.8% in 2016–20, in line with growth of folding carton and flexible.

Consumers in developed markets such as Germany desire more product variety, which translates into a wider

product line for manufacturers and shorter runs for print packaging converters. Flexible will be growing the fastest

owing to cheaper materials and ease of transport, which is important in the EU, where cross-country trade is common.

Since the financial crisis, German consumers have become increasingly frugal and austere, and

there are few signs of these habits waning.

Germany: Forecast dynamics and outlook

Deep dive: Germany

-4%

-2%

0%

2%

4%

6%

2012 2013 2014 2015 2016 2017 2018 2019 2020


Segment growth in Germany in 2012-2020


Source: EIU.

Forecast Other 3.0%

Corrugated 34.1%


Labels & tags 8.7%

Flexible 23.6%

Germany print packaging segments market share in

2020

Source: EIU.

83 83

The developed market in Germany results in high competition

not only among companies, but also between types of

packaging, as products must be at the edge of consumer

preferences and companies must be at the edge of innovation.

Sustainability, recyclability and green packaging have gained

space in consumer packaging. Flexible and folding carton are the

segments that are best set to gain from this trend.

Due to the economic integration of the EU, the print packaging

industry is spread out in the continent, with German

companies and converters opening and maintaining plants in

neighboring countries. According to experts, some German

producers have operations outside of the domestic market to

benefit from EU incentives to build production facilities in Central

& Eastern Europe. Those facilities are often mass producing

goods for the entire EU market.

Print packaging consulting exists in Germany; however, it is a

small market. Most of the consulting come in the form of technical

assistance, design consulting, pre-press services, and packaging

design. Nevertheless, technical schools and universities offer print

and packaging courses, which are increasing.

The German beverage market is dominated by labels & tags, as

there is a container deposit law that more heavily affects

beverage cans (in the others segment) and single-use bottles

compared with recyclable bottles (with labels).

On the supply side, Germany’s print packaging market is structured to take best advantage of EU

integration and free flow of goods and labor. On the demand side, the market is sophisticated, and

sustainability concerns have gained traction.

Germany: Print packaging highlights

Deep dive: Germany

0 10,000 20,000

< US$5,000

US$5,000 – US$15,000

US$15,000 – US$25,000

US$25,000 – US$50,000

US$50,000 – US$75,000

> US$75,000

2016 2020


Germany in 2016 and 2020 ('000s)

Source: EIU.

Income levels will remain relatively high,

but below those in France and the UK. By

2020 around half of households are forecast

to be earning more than $50,000 per year,

with one-third of these earning more than

$75,000.

84 84

Germany: Key segment analysis

Deep dive: Germany

Folding carton will follow flexible

print packaging closely, growing

at a 2.6% annual rate in 2016–20.

Folding carton is a highly

recyclable packaging material,

which is advantageous in an

increasingly environmentally

conscious consumer market where

German consumers are more

focused on decisions that affect

their environmental footprint, health

and safety.

Germany’s flexible print

packaging will be growing at a

healthy and stable 2.7% annual

rate in 2016–20 owing to the

recent recuperation of retail sales

and expectations for it to hold up in

coming years.

Experts point to a growing pre-

packaged food sector as a driver of

flexible packaging growth, as

Germans demand prepared foods

(e.g. frozen meals) as a matter of

convenience.

-2%

0%

2%

4%

6%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Flexible growth Total growth Retail sales (LCU)

Flexible

Stable

outlook


Source: EIU.

Forecast

CAGR 2.7%

-2%

0%

2%

4%

6%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Folding carton growth Total growth Retail sales (LCU)

Folding carton

Stable

outlook


Source: EIU.

Forecast

CAGR 2.6%

85 85

Germany: Key segment analysis

Deep dive: Germany

Labels & tags is a mature

consumer market in Germany.

Lifestyle trends and demographic

trends (population aging, higher

immigration and a rising share of

one-person households) will drive

spending patterns in the coming

years.

Germany has traditionally had a

fragmented brewing sector, so

short print packaging runs are the

norm. This characteristic of the

German labels & tags market is

expected to continue.

In spite of the uncertainties around

the EU Brexit vote, trade within

the EU and its partners will

continue, supporting growth of

corrugated print packaging, which

is strongly tied to exports.

Corrugated is also used for

shipments, and e-commerce

continues to grow in Germany. E-

commerce sales rose by 12% in

2015, according to the German

Retail Federation (HDE), which

projects another year of double-

digit growth (11%) in 2016.

-4%

-2%

0%

2%

4%

6%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Labels & tags growth Total growth Retail sales (LCU)

Labels & tags

Stable

outlook


Source: EIU.

Forecast

CAGR 2.0%

-2%

0%

2%

4%

6%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Corrugated growth Total growth Retail sales (LCU)

Corrugated

Stable

outlook


Source: EIU.

Forecast

CAGR 2.1%

India

Deep dive

87 87

India is the fastest-growing

print packaging market across

all segments, growing on

average 12.1% per year in local

currency terms in 2016-20.

Since 2011, India went from

being the 8th largest print

packaging market to 5th in

2016. It will pass Germany in

2020, and it will be just $557m

behind 3rd-placed Japan.

The flexible print packaging

market in India is much larger

than folding carton. However,

the folding carton segment in

India is still sizable because of

exports, in particular luxury

goods and cigarettes.

According to experts, the fast-

moving consumer goods and

food goods are the sectors that

offer the best opportunities for

print packaging.

India is quickly rising in the ranks of the print packaging industry, going from the 8th largest market in

2011 to 5th in 2016. By 2020 it will become the 4th largest market, passing Germany, and at this rate,

shortly after the 2020 horizon, India will surpass Japan, becoming the 3rd largest market in this study.

India: Overall and key takeaways

Deep dive: India

12.4%

12.4%

12.3%

12.2%

12.6%

12.5%

12.1%

12.2%

11.9%

12.0%

12.1%

12.4%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in India



Source: EIU.

3.7 5.6

1.4

2.2 2.6

3.9 3.6

5.5

0.9

1.4

0

2

4

6

8

10

12

14

16

18

20

2016 2020

Bil

lio

ns


Corrugated Other


India in 2016 and 2020 (US$)


Source: EIU.

12.2

18.6

CAGR

11%

88 88

India: Current dynamics and trends

Deep dive: India

India


Population (m) 1,311.0 1,327.0 1,343.0 1,358.0 1,374.0 1,389.0



Private consumption per head (US$) 941 989 1,040 1,140 1,280 1,410


Source: EIU.

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

200

400

600

800

1,000

1,200

1,400

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns

Flexible Labels & tags Folding carton Corrugated

Other India growth (%) Asia-Pacific growth (%)

Print packaging market size by segment in India in 2011-2020 (in Indian rupees) Forecast


Source: EIU.

89 89

The print packaging industry in India will grow strongly over 2016-20, with each component segment growing at

similarly fast paces. The fastest will be labels & tags, which will grow at an annual average rate of 12.6% in 2016-

20; the slowest segment will be corrugated, which will grow at an annual average rate of 12.3% in the period.

India is the 5th largest print packaging market in our study with revenues of $12.2bn in 2016. By 2020, revenues

will reach $18.6bn, just below Japan, the 3rd largest market in our study with $19.1bn in print packaging revenues.

Numerous international food brands are targeting the Indian market, such as Unilever, Nestlé and Pepsi.

Those international companies will bring with them more demand for more sophisticated print packaging, which will

lift revenues for flexible, labels & tags and folding carton.

Indian consumers are not yet as eco-conscious or focused on green packaging as are consumers in mature

markets. However, there is an expectation that these trends will reach India in the forecast period, which will lift

further flexible print packaging revenues.

India is the fastest-growing market for all print packaging segments in this study, and it will continue to

grow strongly in 2016-20.

India: Forecast dynamics and outlook

Deep dive: India

4%

8%

12%

16%

20%

2012 2013 2014 2015 2016 2017 2018 2019 2020


Segment growth in India in 2012-2020


Source: EIU.

Forecast Other 7.4%

Corrugated 29.6%


Labels & tags

11.8%

Flexible 30.2%

India print packaging segments market share

in 2020

Source: EIU.

90 90

A challenge for India’s print packaging industry is the rising

labor costs coupled with inflation, which raises costs and could

result in the outsourcing of those print packaging plants to other

cheaper labor markets.

According to experts, manufacturers in India are generally not

very sophisticated when it comes to print packaging and

marketing. Designs are generally provided by brand owners, but

even agencies employed by those brand owners are not very up to

date and innovative. Some print packaging firms employ graphic

designers to design for smaller companies who can not afford

agencies, filling in the gap in the supply chain.

The Indian packaging market is very fragmented, with estimates

reaching 22,000 firms (including print packagers as well as other

firms in the supply chain for packaging). Furthermore, according to

experts, the informal market is large in India. The folding carton

informal print packaging industry could be producing up to 25% of

the market, in the form of candy boxes and shoe boxes.

Rising incomes, urbanization and young people have significant

implications for the print packaging sector, as more fast-moving

consumer goods are sold, lifting folding carton, labels & tags and

flexible print packaging. Furthermore, India’s youthful population is

becoming brand- and fashion-conscious, especially in big cities,

where increasingly affluent households are acquiring a taste for

luxury items. Many global brands are targeting this segment.

India’s fast-changing demographics will be the key driver to watch for the print packaging industry. It

will be underpinning growing print packaging demand for luxury goods, pre-packaged processed

foods and fast-moving consumer goods.

India: Print packaging highlights

Deep dive: India

0 100,000 200,000

< US$5,000

US$5,000 – US$15,000

US$15,000 – US$25,000

US$25,000 – US$50,000

US$50,000 – US$75,000

> US$75,000

2016 2020


India in 2016 and 2020 ('000s)

Source: EIU.

In 2020, about 83m more households will

earn more than $15,000 compared to 2016.

This translates into about 420m new people in

households earning more than $15,000, the

overwhelming majority of whom will be rising

from a lower income bracket.

91 91

India: Key segment analysis

Deep dive: India

Young city-dwellers are

consuming more pre-packaged

processed foods (which come in

flexible and folding carton

packaging) and the expectation is

for this trend to strengthen.

The industry is shifting away from

folding carton and other rigid

packaging to flexible because its

considered more attractive,

cheaper, and easier to transport.

Demand for soft drinks has

traditionally centered on fresh

juices and bottled water (which use

labels print packaging).

Carbonated drinks will become

more popular as innovative

package sizing increases

affordability.

Per-head consumption of alcoholic

drinks is small, but India is the

world’s largest whisky market in

volume terms and will remain a

major global spirits market (which

use labels print packaging).

0%

4%

8%

12%

16%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Flexible growth Total growth Consumer expenditure: Food, beverages & tobacco

Flexible

Positive

outlook


Source: EIU.

Forecast

CAGR 12.5%

0%

4%

8%

12%

16%

20%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Labels & tags growth Total growth Consumer expenditure: Total

Labels & tags

Positive

outlook


Source: EIU.

Forecast

CAGR 12.6%

92 92

India: Key segment analysis

Deep dive: India

Folding carton will be the slowest

print packaging segment at an

average annual pace of 12.2% in

2016-20.

While the majority of the population

will continue to rely on basic,

unprepared foods, such as cereals,

there is a growing demand for

packaged foods, like ready

meals and canned goods,

especially in urban areas. This

will support growth in the flexible,

labels & tags, and folding carton

print packaging markets.

E-commerce and exports will drive

corrugated print packaging. A US

investment bank, Goldman Sachs,

estimates that Indian e-commerce

is worth $23bn in the year to March

2016, from $11bn in 2015, a

doubling of the market.

Online retail will continue to

grow as urbanization continues

and more people are connected to

the internet.

0%

4%

8%

12%

16%

20%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Folding carton growth Total growth Retail sales (LCU)

Folding carton

Positive

outlook


Source: EIU.

Forecast

CAGR 12.2%

0%

4%

8%

12%

16%

20%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Corrugated growth Total growth Retail sales (LCU)

Corrugated

Positive

outlook


Source: EIU.

Forecast

CAGR 12.3%

Indonesia

Deep dive

94 94

While a smaller market at $1.5bn

in 2015, the Indonesian print

packaging industry is set to

continue expansive growth

underpinned by an expanding

middle class, increasing

consumer demand for household

goods and retail products,

competitive local companies,

and cheaper raw materials.

Following this demographic shift,

flexible and corrugated

packaging revenues made up

roughly two-thirds of total

packaging demand in 2015.

Additionally, Indonesia’s e-

commerce transactions are

expected to grow from US$12bn

in 2014 to US$130bn by 2020,

reflective of growth in a

corrugated segment projected

to grow at a 9.4% clip in the

forecast period.

The Indonesian print packaging industry is projected to be the 3rd fastest growing market at an

average annual rate of 10.1% over the next five years.

Indonesia: Overall and key takeaways

Deep dive: Indonesia

10.2%

10.2%

9.4%

9.6%

10.5%

10.9%

9.5%

9.5%

8.9%

9.0%

9.7%

10.0%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Indonesia



Source: EIU.

488 720

328

478 234

330 472

661

70

101

0

500

1,000

1,500

2,000

2,500

2016 2020

Mil

lio

ns


Corrugated Other

Print packaging market by segments in

Indonesia in 2016 and 2020 (US$)

1,591 2,290

CAGR

9.5%


Source: EIU.

95 95

Indonesia: Current dynamics and trends


Indonesia


Population (m) 255.8 258.2 260.6 262.9 265.3 267.5




Exchange rate LCU:US$ (av) 13,389 13,557 13,785 13,800 13,725 13,875

Source: EIU.

0%

2%

4%

6%

8%

10%

12%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns

Flexible Labels & tags Folding carton Corrugated Other Indonesia growth (%) Asia-Pacific growth (%)

Print packaging market size by segment in Indonesia in 2011-2020 (in Indonesian rupiahs)

Forecast


Source: EIU.

96 96

Indonesian middle-class consumers, in the wake of rising regional minimum wages and accordingly

purchasing power, are creating significant demand for a flexible packaging industry that makes up 33% of the

total packaging industry in 2020, due to lightweight and lower costs to produce.

Local companies, such as PT Trias Sentosa and Indah Kiat, as well as international companies are battling for a

competitive edge as rising material costs and domestic fuel prices are forcing companies to rethink and innovate to

lower packaging costs and increase revenues. This will continue to affect the folding carton and flexible segments

in particular.

The flexible packaging and labels & tags segments point towards the strongest growth over the forecast period with

average annual growth rates of 10.8% and 10.5% respectively, as demand for higher value-added processed food,

beverages and household goods picks up across primary sales channels.

Indonesian print packaging revenues will reach $2.3bn by 2020, growing at an annual average rate of

9.5% in US dollar terms, more than double the pace of real GDP growth.

Indonesia: Forecast dynamics and outlook


8%

9%

10%

11%

12%

2012 2013 2014 2015 2016 2017 2018 2019 2020


Segment growth in Indonesia in 2012-2020


Source: EIU.

Forecast Other 4.4%

Corrugated 28.9%


Labels & tags

20.9%

Flexible 31.4%

Indonesia print packaging segments market share

in 2020

Source: EIU.

97 97

Industry experts point to lower labor costs relative to China and a

motivated workforce as key success factors for multinational

packaging companies (e.g. TetraPak, Amcor) seeking to acquire

market share in the region. For consumers this translates to

increasing packaging variety, including sustainable and

hygienically-packed products.

Rising affluence is expected to drive increased demand for

higher-value packaged goods in all sectors. EIU forecasts that

37% of Indonesian households will earn more than US$10,000

annually by 2020, compared with 19% in 2015, driven by double-

digit annual nominal wage growth.

Improving economic conditions and falling oil prices (fuel

prices were cut from April 2016) will see stronger spending in

2016-20 but still-high inflation is reducing private consumption—

the largest contributor to nominal GDP.

Indonesia’s middle class will be drawn to the convenience and

choice offered by hypermarkets which allow for a plethora of

consumer goods. As Indonesians become richer, the popularity

of modern retail outlets, which currently account for only 30% of

total retail sales, will grow at the expense of informal channels.

Demographic factors—about 28% of the population are under the

age of 15—indicate scope for strong medium- to long-term

growth in consumer spending, especially for discretionary items

such as consumer electronics, a core product of packaged goods.

Both local companies and multinational giants are competing to meet Indonesian consumer demand

using innovative print technologies and packaging design.

Indonesia: Print packaging highlights


0 20,000 40,000 60,000

< US$5,000

US$5,000 – US$15,000

US$15,000 – US$25,000

US$25,000 – US$50,000

US$50,000 – US$75,000

> US$75,000

2016 2020


Indonesia in 2016 and 2020 ('000s)

Source: EIU.

Indonesian income distribution shows strong

demand for high-volume, consumer goods as

wage growth pushes more of the population into

the middle class bracket.

98 98

Indonesia: Key segment analysis


Environmental concerns over paper

and plastic as well as shorter

printing runs have increased

demand for labeled packaged

products. Indonesian consumers’

shopping carts vary in product

types and contain numerous

brands as opposed to only the

big consumer packaged goods.

Labels and tags segment indicates

the second strongest growth of all

four segments.

Strongest segment growth owing to

Indonesia’s private consumption

habits. The food packaging

industry remained the largest

plastics end-user in 2015 in

Indonesia, after enjoying another

year of considerable growth.

The Indonesian plastics industry—

and as a result the supporting end-

use consumer goods industries—

are heavily reliant on raw material

imports, leaving room for local

flexible packaging converters to

gain market share.

4%

6%

8%

10%

12%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Labels & tags growth Total growth GDP (% real change pa)

Labels & tags

Positive

outlook


Source: EIU.

Forecast

CAGR 10.5%

4%

6%

8%

10%

12%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Flexible growth Total growth Private consumption (% real change pa)

Flexible

Positive

outlook


Source: EIU.

Forecast

CAGR 10.9%

99 99

Indonesia: Key segment analysis


Strong segment growth

projected due to increasing

Internet access and as a result,

growing e-commerce business

with a projected 10m new online

shoppers in 2016.

Many companies are investing

in new corrugated production

machinery to maintain foothold

and utilize efficiencies as

outdated equipment hamper

sales and slow down print

processes.

Like the other segments, the

folding carton and paperboard

packaging segment is growing

almost twice as fast as real GDP

at 9.6% versus 5.1% over the

forecast period.

Folding carton converters will

focus on lower quality, thinner

paper to produce the same

goods in an era of rising

environmental concerns and

increasing raw material costs.

4%

6%

8%

10%

12%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Folding carton growth Total growth GDP (% real change pa)

Folding carton

Positive

outlook


Source: EIU.

Forecast

CAGR 9.6%

4%

6%

8%

10%

12%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Corrugated growth Total growth GDP (% real change pa)

Corrugated

Positive

outlook


Source: EIU.

Forecast

CAGR 9.4%

Mexico

Deep dive

101 101

The Mexican print packaging

industry is being affected by

thinning profit margins and

packaging-related

regulations, similar to other

developing countries in Latin

America and Asia-Pacific.

Mexican print packaging

companies generated roughly

$2.7bn in 2011 and 2015,

seeing virtually flat growth

owing to the sharp depreciation

of the Mexican peso against the

US dollar in 2015.

The Mexican flexible and

folding carton print

packaging segments are

expected to grow at an

average annual rate of 6.7% in

local currency terms in 2016-20

as consumers seek more

customized packaged products.

Mexico’s print packaging market is forecast to grow at a steady 6% average annual rate over 2016-

20, influenced by rising domestic consumption and middle class growth.

Mexico: Overall and key takeaways

Deep dive: Mexico

0.7 1.0

0.4

0.5 0.5

0.7 0.6

0.9

0.1

0.1

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2016 2020

Bil

lio

ns


Corrugated Other


Mexico in 2016 and 2020 (US$)

2.4 3.3

CAGR

8.1%


Source: EIU.

6.2%

6.3%

5.4%

6.7%

6.1%

6.7%

5.4%

5.5%

5.1%

5.4%

5.4%

5.7%

0.0% 5.0% 10.0%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Mexico



Source: EIU.

102 102

Mexico: Current dynamics and trends

Deep dive: Mexico

Mexico


Population (m) 127.0 128.6 130.2 131.8 133.3 134.8





Source: EIU.

0%

2%

4%

6%

8%

10%

0

10

20

30

40

50

60

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns

Flexible Labels & tags Folding carton Corrugated Other Mexico growth (%) Latin America growth (%)

Print packaging market size by segment in Mexico in 2011-2020 (in Mexican pesos) Forecast


Source: EIU.

103 103

Growth in retail sales, strongly correlated with print packaging products, has been more heavily concentrated on

lower-cost items, with high-ticket purchases remaining relatively weak. A fairly firm forecast of private consumption

growth in 2016-20 (averaging 3% per year) bodes well for the packaging sector.

Simultaneously, Mexican consumers are buying smaller package formats in the wake of high obesity rates and

increasing taxes and regulations on food and beverage introduced by the Mexican government. As such, flexible

and folding carton packaging solutions will increase in total volume, which together make up nearly half of the total

print packaging in Mexico.

Corrugated print packaging segment forecasts show the second-largest revenues at $858m in 2020, continuing

its position as the second-largest sales volume of the print packaging segments. Corrugated print packaging will

continue growing as 24m Mexicans gain access to the Internet between 2016 and 2020.

Mexican print packaging revenues are projected to reach $3.3bn by 2020, growing at an

average annual rate of 6.2% in 2016-20.

Mexico: Forecast dynamics and outlook

Deep dive: Mexico

0%

2%

4%

6%

8%

2012 2013 2014 2015 2016 2017 2018 2019 2020


Segment growth in Mexico in 2012-2020


Source: EIU.

Forecast Other 4.4%

Corrugated 26.0%


Labels & tags

16.4%

Flexible 31.5%

Mexico print packaging segments market share

in 2020

Source: EIU.

104 104

Despite an economic slowdown, tighter fiscal and monetary

conditions, and dissatisfaction over widespread corruption,

Mexicans are on a spending binge that is providing an important

boost to the economy in the absence of support from investment

or public spending. However, the factors supporting this consumer

boom are likely to be temporary.

Flexible packaging companies are acting as innovators to deflect

concerns over harmful packaging materials. In turn, sustainable

packaging solutions made of recycled and biodegradable materials

are being developed as a solution.

Demographic trends and rising income levels will affect food

demand. An increase in the number of single households and of

women working outside the home will continue to spur demand

for prepared foods, and wider use of freezers and microwaves

will prompt a corresponding rise in sales of packaged frozen

foods and ready meals.

Brand owners are working closely with print packaging manufacturers

for full supply-chain solutions. This can be seen especially in

personal care and beauty products as brand owners create new

product lines and want to maintain consistency in brand positioning.

The Mexican retail market is the second-largest in Latin America

after Brazil, with total sales in 2015 of $369bn. Although the

market declined in USD terms since 2014, in peso terms, retail

sales increased by 4.5%, also evidenced by a strong print

packaging market.

Mexican print packaging industry is growing off the back of increasing consumption of packaged food

and household products and convenience for consumers

Mexico: Print packaging highlights

Deep dive: Mexico

0 5,000 10,000

< US$5,000

US$5,000 – US$15,000

US$15,000 – US$25,000

US$25,000 – US$50,000

US$50,000 – US$75,000

> US$75,000

2016 2020


Mexico in 2016 and 2020 ('000s)

Source: EIU.

A growing upper-middle class by 2020 will

allow for a diverse product mix, as consumers

will demand both luxury goods as well as

standard packaged household goods to meet

their consumption needs.

105 105

Mexico: Key segment analysis

Deep dive: Mexico

Similar to flexible packaging,

folding carton packaging offers a

significant growth opportunity as

many middle-class Mexicans are

demanding common consumer

goods such as pharmaceuticals,

pre-packaged meals, and beauty

products.

Grupo Gondi is one of the largest

players in folding carton print

packaging, recently acquiring

Aluprint Plegazidos from

Constantia Flexibles, a large

multinational company, in 2016.

Changing lifestyles, with an

increase in processed foods and

personal care products are driving

stronger growth in the flexible

packaging segment in Mexico. For

smaller household sizes as is the

case in Mexico, flexible packaging

offers the most variety of packaging

sizes (bought in bulk or single-

product) and storage flexibility.

Walmart subsidiary, Walmex, as

well domestic retailers, Soriana and

Chedraui, are the main companies

selling packaged goods.

0%1%2%3%4%5%6%7%8%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Flexible growth Total growth Retail sales growth (% pa)

Flexible

Positive

outlook


Source: EIU.

Forecast

CAGR 6.7%

0%1%2%3%4%5%6%7%8%

2012 2013 2014 2015 2016 2017 2018 2019 2020


Folding carton

Positive

outlook


Source: EIU.

Forecast

CAGR 6.7%

106 106

Mexico: Key segment analysis

Deep dive: Mexico

Corrugated print packaging is

growing steadily over 2016-20 as

Mexicans are increasingly getting

on the Internet—e-commerce has

risen sharply to 65m internet users

in 2015.

The online retail market remains

comparatively underdeveloped,

owing to limited supply of online

offerings and a shortage of e-

commerce solutions, leaving a

growth opportunity on the table for

package printers once

infrastructure improves.

As Mexican consumers garner a closer eye towards proper labeling on food and beverage products, demand will shift away from traditional goods and towards smaller-batch products, which closely align with the labels & tags segment.

In August 2016, Chobani, a US-based yogurt company using shrink-sleeve labels, entered its first international market, Mexico, facing sizable demand from a growing middle class and a health-conscious demographic.

0%1%2%3%4%5%6%7%8%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Labels & tags growth Total growth Retail sales growth (% pa)

Labels & tags


Source: EIU.

Forecast

CAGR 6.1% Positive

outlook

0%1%2%3%4%5%6%7%8%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Corrugated growth Total growth Retail sales growth (% pa)

Corrugated


Source: EIU.

Forecast

CAGR 5.4%

Stable

outlook

Appendix: Regional overviews

108 108

Growth will remain stable across all segments, as the

average cumulative annual growth rate in 2016-20 will

remain at the same level as it did in 2011-15.

The EIU expects a mild business cycle recession in

the US in 2019, owing to a softening of domestic

demand as the Fed raises interest rates to fight inflation.

This will dampen consumption, affecting primarily

flexible, labels & tags, and folding carton print packaging.

Online retail sales (closely related to corrugated print

packaging) has been rising strongly over 2011-15 at

an average annual rate of 11.2% and we expect this

trend to continue in 2016-20, reaching a peak of 13.4%

growth in 2018. This will support corrugated in 2016-20.

North America is the second-largest regional print packaging market, accounting for 33% of the total

print packaging market in US$ terms.

North America

Regional profile

0%

2%

4%

6%

8%

0

20

40

60

80

100

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns


Corrugated Other N. America growth (%)

Total growth (%)

Note: North America includes US and Canada. Growth rates are average growth rates in LCU terms.

Total growth corresponds to average growth of all 26 countries in this study.

Source: EIU.

Forecast

North America print packaging market by segment

in 2011-2020 (US$)

Other regions,

67%

US 31.9%

Canada 1.0%

North America,

33%

North America print packaging market share in 2016

Note: This chart represents the share of 26 countries that is

covered by this study.

Source: EIU.

2.6%

2.7%

2.8%

2.6%

2.7%

2.9%

US

NorthAmerica

Canada

North America growth by country

2011-15 2016-20

Note: Figures presented are cumulative annual growth rates

for each country in local currency terms. Region growth is

the average cumulative annual growth rates of the countries

in the region.

Source: EIU.

-12%

-8%

-4%

0%

4%

8%

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Nominal GDP (US$ at PPP)

Nominal private consumption (US$)

Total exports fob

Note: North America includes US and Canada.

Source: EIU.

Macro trends in North America

in 2011-2020 (% annual change)

109 109

Rising incomes across the region will continue to lift all

print packaging segments, albeit at a slower rate.

Brazil is the only Latin American country that loses

positions in this study’s growth ranking, falling five

positions to 13th fastest-growing print packaging market.

Colombia and Mexico both gain positions in 2016-20,

while Chile remains stable at 12th.

Corrugated will accelerate in Colombia and Mexico, on

the back of weaker local currencies as they support

exports. The weak Brazilian real would help

corrugated, but it will not be sufficient to counteract

the current recession, the political crisis and their

aftermath, which will last until 2017.

Despite annual average growth in 2016-20 being nearly one full percentage point below 2011-15,

Latin America will continue to be the third fastest-growing region in the world.

Latin America

Regional profile

0%

2%

4%

6%

8%

10%

0

2

4

6

8

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns


Corrugated Other Lat. Am. Growth (%)

Total growth (%)

Note: Latin America includes Brazil, Chile, Colombia and Mexico. Growth rates are average growth

rates in LCU terms. Total growth corresponds to average growth of all 26 countries in this study.

Source: EIU.

Forecast

Latin America print packaging market by segment

in 2011-2020 (US$)

Other regions 97.5% Brazil

1.3%

Chile 0.1%

Colombia 0.1%

Mexico 1.0%

Latin America,

2.5%

Latin America print packaging market share in 2016



Source: EIU.

4.6%

5.7%

6.0%

6.2%

7.4%

7.6%

6.8%

6.9%

5.4%

7.8%

Brazil

Chile

LatinAmerica

Mexico

Colombia

Latin America growth by country

2011-15 2016-20

Note: Figures presented are cumulative annual growth

rates for each country in local currency terms. Region

growth is the average cumulative annual growth rates of

the countries in the region.

Source: EIU.

-25%-20%-15%-10%-5%0%5%

10%

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020



Total exports fob

Note: Latin America includes Brazil, Chile, Colombia and Mexico.

Source: EIU.

Macro trends in Latin America


110 110

All print packaging segments’ growth have been muted

and even contracting in the earlier years closer to the

global financial crisis of 2007-08, owing to weak

consumption, retail sales and income growth.

The UK will be the only country in our study that will

shrink (a 0.01% contraction in 2017) in the forecast

period. All other Western Europe countries will grow more

strongly, compensating for the UK contraction and lifting

regional growth up to 2% in 2016-20.

Nevertheless, Western Europe is a slow-growing

region. Five out of the bottom eight print packaging

markets are in Western Europe, as it is a developed

market with a slow-growing population.

After a weak 2011-15, Western Europe will recover in 2016-20, but it will continue to be the slowest-

growing region in our study.

Western Europe

0%

2%

4%

6%

8%

0102030405060

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns


Corrugated Other W. Europe growth (%)

Total growth (%)

Note: Western Europe includes France, Germany, Italy, Netherlands, and United Kingdom. Growth

rates are average growth rates in LCU terms. Total growth corresponds to average growth of all 26


Source: EIU.

Forecast

Western Europe print packaging market by segment

in 2011-2020 (US$)

Other regions 81.1%

France 4.1%

Germ. 6.3%

Italy 3.7%

Neth. 0.5%

UK 4.3%


Western Europe print packaging market share in 2016



Source: EIU.

1.2%

1.9%

1.9%

2.0%

2.6%

2.4%

1.8%

0.9%

1.0%

1.3%

1.4%

1.4%

UK

Italy

France

W. Euro.

Neth.

Germany

Western Europe growth by country

2011-15 2016-20Note: Figures presented are cumulative annual growth




Source: EIU.

-15%

-10%

-5%

0%

5%

10%

15%

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020



Total exports fob

Note: Western Europe includes France, Germany, Italy, Netherlands,

and United Kingdom.

Source: EIU.

Macro trends in Western Europe


Regional profile

111 111

Turkey is the fastest-growing country in the region at the

10th position in our study. Its dynamic population and

proximity to Europe supported and will continue to

support print packaging growth in 2016-20. The same

could be said about Poland, but the EU sanctions

against Russia over Ukraine hurts Polish consumption

and its print packaging market across all segments.

Political uncertainties unveiled by the recent coup

attempt in June 2016 in Turkey as well as increasing

Western tensions with Russia will dampen consumer

confidence, and decelerate consumption and print

packaging growth of all segments in the region.

Central & Eastern Europe is the fifth largest and fifth fastest-growing region in our study. However,

political uncertainties within and across borders will trim growth in 2016-20.

Central & Eastern Europe

Regional profile

0%1%2%3%4%5%6%7%

0

1

2

3

4

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns

Flexible Labels & tags Folding cartonCorrugated Other C. & E. Europe (%)Total growth (%)

Note: Central & Eastern Europe includes Poland, Russia and Turkey. Growth rates are average growth

rates in LCU terms. Total growth corresponds to average growth of all 26 countries in this study.

Source: EIU.

Forecast

Central & Eastern Europe print packaging market by segment

in 2011-2020 (US$)

Other regions 98.9% Poland

0.3%

Russia 0.5%

Turkey 0.3%

Central & Eastern Europe 1.1%

Central & Eastern Europe print packaging market share in 2016



Source: EIU.

2.5%

2.6%

3.7%

6.0%

3.0%

3.0%

4.6%

7.8%

Poland

Russia

C. & E.Europe

Turkey

Central & Eastern Europe growth by country

2011-15 2016-20





Source: EIU.

-30%

-20%

-10%

0%

10%

20%

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020



Total exports fob

Note: Central & Eastern Europe includes Poland, Russia and Turkey.

Source: EIU.

Macro trends in Central & Eastern Europe


112 112

The market dynamics of Iran and Saudi Arabia will

counteract each other, resulting in similar growth rates

for 2016-20 compared to 2011-15.

Flexible, labels & tags, and folding carton will grow

strongly in Iran owing to the lifting of sanctions and

Western reengagement, as consumption and retail sales

expands due to a rise in disposable incomes. On the

other hand, tepid growth of the same segments in

Saudi Arabia will continue in 2016-20, with higher oil

prices starting only in 2017, picking retail sales up again.

Corrugated will perform better in 2016-20 in the region

as Iran reaps the benefits of the opening of the economy,

with increases in exports and shipments.

The Middle East is a mixed bag and it is in the middle of the pack in terms of growth. As the fifth fastest-

growing market in the world, Iran lifts the region, while Saudi Arabia (14th fastest) holds it back.

Middle East

Regional profile

-40%

-30%

-20%

-10%

0%

10%

20%

30%

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020



Total exports fob

Note: Middle-East includes Saudi Arabia and Iran.

Source: EIU.

Macro trends in Middle East


0%

2%

4%

6%

8%

10%

0.0

0.5

1.0

1.5

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns


Corrugated Other Middle-East growth (%)

Total growth (%)

Note: Middle-East includes Saudi Arabia and Iran. Growth rates are average growth rates in LCU

terms. Total growth corresponds to average growth of all 26 countries in this study.

Source: EIU.

Forecast

Middle East print packaging market by segment

in 2011-2020 (US$)

Other regions 99.5%

Saudi Arabia 0.4%

Iran 0.1%

Middle East 0.5%



Source: EIU.

Middle East print packaging market

share in 2016

4.0%

6.3%

8.5%

4.0%

5.8%

7.5%

SaudiArabia

Middle-East

Iran

2011-15 2016-20Note: Figures presented are cumulative annual growth




Source: EIU.

Middle East growth by country

113 113

Both African countries are among the top ten fastest

markets: Nigeria in second and South Africa in sixth. The

fast growing population, particularly in Nigeria, is the

main driver of print packaging growth in the region.

Flexible, labels & tags, and folding carton print

packaging are the fastest growing segments in the

region owing to strong demographics, and growing

manufacturing and retail sectors.

Corrugated will grow at a slower, but still strong 7.8%

pace in 2016-20, as exports are expected to pick up

starting in 2017 on the back of depreciated currencies

which make those countries’ goods more competitive in

the global market.

Africa is the second-smallest regional print packaging market, yet it has been the fastest-growing region in

2011-15 and will continue to be the fastest in 2016-20, at a whopping 9% annual average growth rate.

Africa

Regional profile

-30%

-20%

-10%

0%

10%

20%

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Nominal GDP (US$ at PPP) Consumer expenditure: Total

Total exports fob

Note: Africa includes Nigeria and South Africa.

Source: EIU.

Macro trends in Africa


0%

2%

4%

6%

8%

10%

12%

0.0

0.4

0.8

1.2

1.6

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns

Flexible Labels & tags Folding cartonCorrugated Other Africa growth (%)Total growth (%)

Note: Africa includes Nigeria and South Africa. Growth rates are average growth rates in LCU terms.

Total growth corresponds to average growth of all 26 countries in this study.

Source: EIU.

Forecast

Africa print packaging market by segment

in 2011-2020 (US$)

Other regions 99.6% Nigeria

0.3%

South Africa 0.1%

Africa 0.4%

Africa print packaging market share in 2016



Source: EIU.

7.6%

9.0%

10.5%

7.5%

9.3%

11.2%

SouthAfrica

Africa

Nigeria

Africa growth by country

2011-15 2016-20





Source: EIU.

114 114

Five out of the ten fastest-growing print packaging

markets in 2016-20 are in the Asia-Pacific region, with

India leading the way in first position in this study.

Manufacturing is shifting inside the region, as labor

costs (and incomes) rise in China. Southeast Asia is

gradually taking over the title of the “world’s factory”, as

China loses some ground in print packaging while growth

in Vietnam and Indonesia accelerates in 2016-20.

Corrugated is the slowest growing segment in the region

and will slow down further in 2016-20. Asia-Pacific is

generally a trade-oriented region; weaker global demand

from the US and EU in 2015-16 dampens trade and

shipments, which slows down the corrugated segment.

Asia-Pacific is the largest regional market for print packaging, accounting for 43.6% of revenues in

this study, and will be the second fastest-growing region, expanding 6.8% in 2016-20.

Asia-Pacific

Regional profile

-8%-6%-4%-2%0%2%4%6%8%

10%

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Nominal GDP (US$ at PPP) Consumer expenditure: Total

Total exports fob

Note: Asia-Pacific includes Australia, China, India, Indonesia, Japan,

South Korea, Philippines and Vietnam.

Source: EIU.

Macro trends in Asia-Pacific


0%

2%

4%

6%

8%

10%

020406080

100120140

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bil

lio

ns

Flexible Labels & tags Folding cartonCorrugated Other Asia-Pacific growth (%)Total growth (%)

Note: Asia-Pacific includes Australia, China, India, Indonesia, Japan, South Korea, Philippines and

Vietnam. Growth rates are average growth rates in LCU terms. Total growth corresponds to average

growth of all 26 countries in this study.

Source: EIU.

Forecast

Asia-Pacific print packaging market by segment

in 2011-2020 (US$)

Other regions 56.4%

China 28.0%

Japan 7.7%

India 5.0%

S. Kor. 1.0%

Aus. 0.9%

Indo. 0.7%

Phil. 0.3%

Vietnam 0.1%

Asia-Pacific, 43.6%

Asia-Pacific print packaging market share in 2016



Source: EIU.

1.1%

3.5%

4.0%

5.9%

6.7%

7.1%

9.7%

10.1%

1.0%

3.3%

4.5%

7.9%

6.9%

7.5%

9.6%

9.5%

Japan

Aus.

S. Kor.

China

APAC

Phil.

Viet.

Indo.

Asia-Pacific growth by country

2011-15 2016-20

Note: Figures presented are cumulative annual growth rates

for each country in local currency terms. Region growth is

the average cumulative annual growth rates of the countries

in the region.

Source: EIU.

Appendix B: Country profiles

116 116

In addition to the six markets examined in detail in the Deep Dives, the EIU explored the print

markets in 20 other countries. This section contains summary profiles of these other 20 markets.

Country profile summary

Country profile

20 country profiles

Australia Netherlands

Brazil Nigeria

Canada Philippines

Chile Poland

Colombia Russia

France Saudi Arabia

Iran South Africa

Italy Turkey

Japan United Kingdom

South Korea Vietnam

117 117

Australia is in the middle of the pack in terms of

print packaging market size, as the 13th largest

market with $2.3bn in 2015. However, in terms of

growth, it falls in the bottom half of the group. In

2011-15, Australia was the 16th fastest growing

market in the world and will maintain that position

in 2016-20.

Folding carton will be the fastest growing

segment in Australia, at an average annual growth

rate of 4% in 2016-2020.

Australia hosts one of the largest packaging

companies in the world, Amcor, specializing in

flexible and rigid plastics. While it is based

there, only 5% of its $10bn global revenues in

2015 came from the Australia/New Zealand region.

While Australia is in the middle of the pack in terms of size and growth among all countries in this

study, it is the second-fastest developed market in terms of print packaging, behind only South Korea.

Australia

Country profile

Australia

macroeconomic indicators 2016 2020

Population (m) 24.2 25.5

Nominal GDP (US$ bn) 1,253 1,492

Consumer prices (% change pa; av) 1.6 2.6

Private consumption per head (US$) 29,970 32,740

Exchange rate LCU:US$ (av) 1.35 1.44

Source: EIU.

3.5%

3.5%

2.8%

4.0%

3.3%

3.9%

3.3%

3.3%

3.0%

3.3%

3.2%

3.5%

0% 5%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Australia

Note: Figures presented are compound

annual growth rates in local currency terms.

Source: EIU.

0.7 0.7

0.4 0.4

0.5 0.5

0.6 0.6

0.2

0.2

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2016 2020

Billio

ns

Flexible Labels & tags

Folding carton Corrugated

Other

Print packaging market by

segments in Australia in 2016

and 2020 (US$)

Note: Compound annual growth rate in US

dollar terms.

Source: EIU.

2.3

2.5

CAGR

1.9%

118 118

Brazil is the 9th largest print packaging market and

will keep its standing throughout the forecast period

in this study. In 2011-15, Brazil was the 8th fastest

growing country in local currency terms. However,

the end of the commodities boom and the

current recession dragged growth, dropping its

position to the 13th fastest growing in 2016-2020.

Up until 2014, Brazil was growing fast, being the

3rd fastest-growing print packaging market in 2013

(at a rate of 10.8%). However, the economy fell,

bringing Brazil down to the 20th position in 2015

and 2016 at a tepid growth rate of 2.3%.

While being the largest market in Latin America,

Brazil is also the slowest. Growth will not pick up

until at least 2017.

Brazil has been going through political turmoil and an economic slump, which have hurt consumer

confidence and expenditures. Print packaging growth will pick up again only in 2017, reaching a

healthier 5% rate in 2019.

Brazil

Country profile

4.6%

4.7%

4.4%

4.7%

4.6%

4.8%

7.6%

7.7%

7.3%

7.6%

7.6%

7.8%

0% 5% 10%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Brazil



Source: EIU.

0.9 1.0

0.5 0.5

0.6 0.7

0.8

0.9

0.2

0.3

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2016 2020

Billio

ns



Other


segments in Brazil in 2016 and

2020 (US$)


dollar terms.

Source: EIU.

3.1 3.4

CAGR

2.3%

Brazil







Source: EIU.

119 119

Canada is the 10th largest print packaging market

in our study. While it lost a position in 2014 and

2015 to 11th owing to the strengthening of the US

dollar, it quickly recuperated in 2016 and will

keep its standing at least until 2020.

In terms of growth, Canada’s print packaging

market is relatively stable in local currency

terms. In 2011-15, it grew at an average annual

rate of 2.9% and it is expected to grow 2.8% in

2016-20.

Canada’s economy and print packaging industry

is closely tied to the US, so its trends will be

closely aligned to its neighbor to the south. Print

packaging is traded across the border, so

many products that are printed and/or packaged

in Canada go to the US market, and vice versa.

Canada is the fastest North American market and the third-fastest developed market and in terms of

print packaging, behind only South Korea and Australia.

Canada

Country profile

Canada







Source: EIU.

2.8%

2.8%

2.6%

2.8%

2.7%

3.0%

2.9%

2.9%

2.6%

2.9%

2.8%

3.1%

2% 3% 3% 4%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Canada



Source: EIU.

0.8 1.1

0.4

0.6 0.5

0.7 0.7

0.9

0.1

0.2

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2016 2020

Billio

ns



Other


segments in Canada in 2016

and 2020 (US$)


dollar terms.

Source: EIU.

2.5

3.4

CAGR

7.8%

120 120

Chile is the smallest print packaging market in

our study at $259m in 2016. It will surpass Iran

and re-gain the 25th position in 2020, when its

market will be $309m. Chile held the 25th position

until 2013, when Vietnam surpassed it.

Between 2011 and 2015, Chile’s total print

packaging market grew at a healthy average

annual rate of 6.8%. In 2016-20, the pace will

slow down, accompanying global trends, but it

will still grow at a 5.7% rate.

Following global trends, Chile’s flexible print

packaging is the fastest growing segment in

2016-20 with an average annual rate of 6.7%, on

the back of rising incomes and consumer

expenditures.

Despite being a large commodities exporter and with the end of the commodities boom, Chile was able

to successfully navigate through the slump, keeping its economy and consumption relatively stable.

Chile

Country profile

Chile



Nominal GDP (US$ bn) 243 296



Exchange rate LCU:US$ (av) 679 712

Source: EIU.

5.7%

5.8%

4.0%

5.7%

6.3%

6.7%

6.8%

6.8%

5.3%

7.1%

7.0%

7.6%

0% 5% 10%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Chile



Source: EIU.

77 95

42

51

68

81

61

68 12

14

0

50

100

150

200

250

300

350

2016 2020

Millio

ns



Other


segments in Chile in 2016 and

2020 (US$)

259

309

CAGR

4.5%


dollar terms.

Source: EIU.

121 121

While it is one of the smallest markets in the

world, Colombia is the fastest-growing print

packaging market in the Americas.

In 2011-15, Colombia was the 7th fastest market

in the world, a position it will keep in 2016-20.

Currency fluctuation has a significant impact on

the print packaging market in Colombia. A

weaker peso in 2016-20 will undermine

consumption (which dampens flexible, labels &

tags, and folding carton paperboard as they

are more closely related to consumer goods), but

will lift exports and shipments (which helps

corrugated).

Colombia will continue to be the fastest-growing print packaging market in the Americas in 2016-20

with an annual average growth rate of 7.4% over the period, despite weaker consumer demand.

Colombia

Country profile

97 127

54

66

85

108

76

92

14

18

0

50

100

150

200

250

300

350

400

450

2016 2020

Millio

ns



Other


segments in Colombia in 2016

and 2020 (US$)

326

410

CAGR

5.9%


dollar terms.

Source: EIU.

Colombia






Exchange rate LCU:US$ (av) 3,077 3,263

Source: EIU.

7.4%

7.5%

6.4%

7.6%

6.9%

8.3%

7.8%

7.8%

6.3%

8.1%

8.0%

8.6%

0% 5% 10%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Colombia



Source: EIU.

122 122

In 2011 France had the 5th largest market, but

was surpassed by India and the United Kingdom

and by 2015 it held the 7th position, which it will

keep at least until 2020.

As it is a developed print packaging market,

France’s growth rate is expectedly low

amongst other countries in this study. In 2016-20,

it will grow at an average annual rate of 1.9% in

local currency terms, a rate above only the UK

and Japan.

Nevertheless, the tepid 1.9% annual growth

rate in 2016-20 is better than the sluggish 1%

rate in 2011-15, owing to lingering effects of the

financial crisis, unemployment, and a weak

external market.

The print packaging market growth in France will be better in 2016-20 than it was in 2011-15, as it

recuperates ground that was lost due to the economic slump and shy consumer expenditures.

France

Country profile

2.3 2.7

0.9 1.0

3.0

3.4

3.4

3.9

0.4

0.4

0

2

4

6

8

10

12

2016 2020

Billio

ns



Other


segments in France in 2016

and 2020 (US$)

9.9

11.4

CAGR

3.3%


dollar terms.

Source: EIU.

France







Source: EIU.

1.9%

1.9%

1.7%

1.9%

1.5%

2.2%

1.0%

1.0%

0.5%

1.3%

0.3%

1.9%

0% 2% 4%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in France



Source: EIU.

123 123

With the lifting of sanctions in progress, Iran will

be the fifth fastest growing print packaging

market, as investment and imported goods flow

in, the economy picks up, and consumers spend.

However, Iran is and will continue to be a small

market as there is a lot of ground to catch up.

In the food and beverage sector, under sanctions,

Iranian customers grew accustomed to local

products. Domestic producers will have the

advantage over some foreign competitors,

especially in goods where local production costs

are low. However, the entrance of new players

will mean that packaged goods will need to be

more attractive, and packaging equipment will

be imported.

Iran offers a young, well-educated, urbanized population of around 80m people; the economy is

diverse and industrialized; and years of isolation have resulted in pent-up demand and substantial

(frozen) assets abroad.

Iran

Country profile

86 94

47 50

75 79

68 67

13 13

0

50

100

150

200

250

300

350

2016 2020

Millio

ns



Other


segments in Iran in 2016 and

2020 (US$)

287 304

CAGR

1.4%


dollar terms.

Source: EIU.

Iran







Source: EIU.

8.5%

8.5%

6.8%

8.7%

8.8%

9.5%

7.5%

7.6%

6.0%

7.8%

7.7%

8.4%

0% 5% 10%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Iran



Source: EIU.

124 124

In 2011-15, the Italian print packaging market

grew a lackluster 0.9% on average per year, the

weakest rate among the countries in this

study. It will get better in 2016-20, as Italy will

grow 1.9% on average.

Demand for convenience and processed foods

will be modest. However, sales of packaged,

semi-ready foods will remain healthy, as large

Italian companies produce and export those

products. The main examples are Barilla

Alimentare (pasta—folding carton and flexible),

Ferrero (chocolates—folding carton and labels &

tags), Cirio (sauces—labels & tags), Sacla

(sauces—labels & tags), and Buitoni (pasta—

folding carton).

Italy, the 8th largest market in our study, has had a weak economy, austerity measures and

contracting consumption. Print packaging growth will return, albeit still at a very low rate.

Italy

Country profile

2.1 2.4

0.8 0.9

2.7

3.1

3.1

3.5

0.3

0.3

0

2

4

6

8

10

12

2016 2020

Bil

lio

ns



Other


segments in Italy in 2016 and

2020 (US$)

9.0

10.2

CAGR

3.3%


dollar terms.

Source: EIU.

Italy




Consumer prices (% change pa; av) -0.2 1.5



Source: EIU.

1.9%

1.9%

1.4%

1.9%

2.4%

2.4%

0.9%

0.9%

0.4%

1.2%

0.2%

1.8%

0% 2% 4%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Italy



Source: EIU.

125 125

Japan is a mature and developed market, so its

expectations are for very low growth. Japan

bottoms the list of countries in this study at an

annual average pace of 0.8% in 2016-20.

Furthermore, Japan has been having ongoing

economic and demographic weakness, in spite of

Abenomics, a set of policies which combine fiscal

stimulus, monetary easing and structural reforms.

These macroeconomic dynamics will limit growth

for consumer goods and retail, principally

affecting flexible, labels & tags and folding carton.

Despite the slow growth in total retail sales in

2016-20, e-commerce is growing around 10% a

year, which will keep corrugated as the largest

print packaging segment during the period.

Japan is the third largest market in 2011, behind China and the US, a position it will maintain until at

least 2020. Growth will remain slow, owing to a weak economy and a shrinking consumer base.

Japan

Country profile

4.7 4.8

2.9 2.9

2.4 2.4

7.2 7.3

1.7 1.7

0

5

10

15

20

25

2016 2020

Bil

lio

ns



Other


segments in Japan in 2016 and

2020 (US$)

18.7 19.1

CAGR 0.4%


dollar terms.

Source: EIU.

Japan







Source: EIU.

0.8%

0.8%

0.7%

0.7%

0.9%

0.9%

1.0%

1.0%

0.9%

1.0%

1.1%

1.1%

0% 1% 2%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Japan



Source: EIU.

126 126

The Netherlands surpassed Russia to gain one

position in terms of market size, becoming the 15th

largest print packaging market in 2016.

While it is small, the Netherlands is the fastest

growing print packaging market among EU

countries in this study, surpassing Poland.

The demand for shorter print runs will increase

as the economic outlook remains feeble and is

likely to continue encouraging substitution of

branded products for low-cost or store-label goods,

which increase variety on the store shelf.

Eating habits will continue to demand convenience

products, such as ready-made meals and pre-

packaged fresh food (flexible and folding

carton), yet price-consciousness will play a role.

The Dutch print packaging market is developed and mature, and its consumer preferences and trends

generally accompany Germany, its neighbor to the East.

Netherlands

Country profile

355 430

187

219

244

291

303

336 52

60

0

200

400

600

800

1,000

1,200

1,400

1,600

2016 2020

Mil

lio

ns



Other


segments in the Netherlands in

2016 and 2020 (US$)

1,140 1,337

CAGR

4.1%


dollar terms.

Source: EIU.

Netherlands







Source: EIU.

2.6%

2.3%

1.2%

3.1%

2.6%

3.5%

1.4%

1.4%

1.2%

1.4%

1.4%

1.7%

0% 2% 4%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in the Netherlands



Source: EIU.

127 127

Despite its rapid growth rate, Nigeria’s market is

relatively small. In 2015, it was the 17th largest

print packaging market. By 2020, it will fall to 21st,

mainly due to a weaker currency.

Its strong local currency growth is attributed mainly

to demographics, rising incomes and supportive

government policies such as a street trade ban,

which led to more customers visiting official retail

outlets and consuming properly packaged

goods.

Nigeria's emerging middle class is also becoming

more diverse in its tastes. Busier lifestyles,

urbanization and rising female participation in the

workforce push demand for ready-to-cook and pre-

packaged foods (flexible and folding carton).

While Nigeria is a relatively small market, it is the second-fastest growing print packaging market in

local-currency terms in our study, only behind India. In 2016-20, it will grow at an average annual

pace of 10.5%.

Nigeria

Country profile

233 219

123 114

160 151

199

179

33

31

0

100

200

300

400

500

600

700

800

2016 2020

Millio

ns



Other


segments in Nigeria in 2016

and 2020 (US$)

749

695

CAGR

-1.9%


dollar terms.

Source: EIU.

Nigeria






Exchange rate LCU:US$ (av) 246 395

Source: EIU.

10.5%

10.5%

9.6%

11.0%

10.4%

10.8%

11.2%

11.3%

10.9%

11.3%

11.2%

11.5%

8% 10% 12%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Nigeria



Source: EIU.

128 128

The Philippines is currently the 21st largest print

packaging market in our study, and by 2020 it will

gain two positions, surpassing Poland and

Nigeria, to be the 19th. The Philippines will be the

8th fastest-growing market in 2016-20 in local

currency terms, but in dollar terms it is the 3rd

fastest market, as the peso strengthens.

About 44.5% of the population is less than 20

years old, ensuring a continued supply of new

consumers and boosting demand for more

innovative products and packaging.

The Philippines is one of the region’s biggest

markets for alcoholic beverages. The local

market is dominated by beer sales (other

segment), followed by wine and spirits (labels).

The fourth fastest growing print packaging market in Asia-Pacific is also one of the poorest. Print

packaging revenues are relatively low and there is a lot of room for growth.

Philippines

Country profile

201 286

135

191 96

132 195

266

29

40

0

100

200

300

400

500

600

700

800

900

1,000

2016 2020

Millio

ns



Other


segments in the Philippines in

2016 and 2020 (US$)

657

915

CAGR

8.7%


dollar terms.

Source: EIU.

Philippines







Source: EIU.

6.9%

7.0%

6.4%

6.6%

7.2%

7.4%

7.5%

7.6%

7.0%

7.1%

7.8%

8.1%

0% 5% 10%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in the Philippines



Source: EIU.

129 129

Poland is both the smallest market in the

region, and the slowest growing one. In 2016-

20, Poland’s print packaging market will grow at a

2.5% annual pace, below the regional average of

3.7%.

Due to its membership to the EU and lower

production costs, Poland plays host to

manufacturing and print packaging plants

which export to the rest of Europe.

Poland is the second-largest producer of home

appliances in Europe, after Italy, which supports

growth of its corrugated segment, and it is the

largest dairy-products producer in the region, but

it is highly fragmented, which supports the

flexible and labels & tags segments.

Poland is the smallest print packaging market in the Central & Eastern European region, with

revenues estimated at $746m in 2016.

Poland

Country profile

225 273

120

140

155

187

194

224 51

61

0

100

200

300

400

500

600

700

800

900

1,000

2016 2020

Millio

ns



Other


segments in Poland in 2016

and 2020 (US$)

746

885

CAGR

4.4%


dollar terms.

Source: EIU.

Poland







Source: EIU.

2.5%

2.5%

1.9%

2.8%

2.1%

3.1%

3.0%

3.0%

2.7%

3.0%

3.0%

3.2%

0% 2% 4%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Poland



Source: EIU.

130 130

Russia had the 13th largest print packaging market

in 2011, but since then it has lost market share

and position in the rankings.

In 2016-20, Russia will be the second-slowest

growing print packaging market in the Central

& Eastern European region at an annual

average rate of 2.6%, owing to inflationary

pressures and Western economic sanctions, which

will hurt consumer expenditures and retail sales.

These trends will affect flexible, labels & tags

and folding carton.

Online retail, however, is growing, albeit from a low

base. An increase in online product offerings and

ongoing demand for lower priced goods will

support growth in the corrugated segment.

Russia is currently the 16th largest print packaging market in this study, a position it will maintain at

least until 2020.

Russia

Country profile

330 382

181 206

292

334

267

302 50

57

0

200

400

600

800

1,000

1,200

1,400

2016 2020

Millio

ns



Other


segments in Russia in 2016

and 2020 (US$)

1,120 1,281

CAGR

3.4%


dollar terms.

Source: EIU.

Russia







Source: EIU.

2.6%

2.7%

2.4%

2.6%

2.4%

3.0%

3.0%

3.1%

1.6%

3.3%

3.2%

3.8%

0% 5%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Russia



Source: EIU.

131 131

The Saudi Arabian print packaging market has

grown and expanded its market share amongst

the countries in this study, coming from being the

19th largest in 2011 to 17th in 2016.

As the world’s largest oil exporter and having its

income strongly dependent on the commodity,

Saudi Arabia’s growth varied significantly over

the past five years, going from a 9.8% growth in

2012 to 2.1% in 2013. Growth will gradually

pick up again, averaging at 4% annually in

2016-20.

Demand for Western food, beverage and

tobacco brands is likely to remain high,

supporting growth in the flexible and folding

carton segments.

The government’s austerity program—driven by the low oil price—will eat into public-sector wages and

employment in the near term, thereby hitting domestic demand and the entire print packaging market.

Saudi Arabia

Country profile

261 311

144

167

229

269

206

236 39

45

0

200

400

600

800

1,000

1,200

2016 2020

Mil

lio

ns



Other


segments in Saudi Arabia in

2016 and 2020 (US$)

878

1,028

CAGR

4.0%


dollar terms.

Source: EIU.

Saudi Arabia







Source: EIU.

4.0%

4.1%

3.4%

4.1%

3.9%

4.5%

4.0%

4.0%

2.5%

4.3%

4.2%

4.8%

0% 5% 10%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Saudi Arabia



Source: EIU.

132 132

South Africa is one of the smallest print packaging

markets in our study, accounting for less that half

of the size of its regional peer, Nigeria, at $330m in

revenues in 2016.

However, it is the sixth fastest growth market in

our study, at an average annual pace of 7.6% in

2016-20.

The spending patterns of South African consumers

have clearly shifted in recent years, owing to the

emergence of a black middle class, high rates of

urbanization and the proliferation of store cards

offering credit. This trend will support growth for

folding carton and flexible, as demand for

processed pre-packaged foods and beverages

increases in a fast-paced environment.

While South Africa is a more developed print packaging economy than Nigeria, South Africa is falling

behind, as the gap between both African nations widen.

South Africa

Country profile

99 107

55 58

86 91

78 77

13 14

0

50

100

150

200

250

300

350

400

2016 2020

Millio

ns



Other


segments in South Africa in

2016 and 2020 (US$)

330 347

CAGR

1.3%


dollar terms.

Source: EIU.

South Africa







Source: EIU.

7.6%

7.6%

6.0%

7.8%

7.7%

8.4%

7.5%

7.5%

6.0%

7.8%

7.7%

8.3%

0% 5% 10%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in South Africa



Source: EIU.

133 133

At $2.4bn, South Korea is the 11th largest

print packaging market in our study, though

over the forecast period Canada will overtake it,

and South Korea will fall to 12th position.

Over the entire 2016-20 period, South Korea

will sustain a healthy and stable annual

growth rate of about 3.8%, the highest rate

among developed markets.

The highly urbanized population and high

incomes will sustain solid growth in consumer

expenditures over the 2016-20 period. However,

low birth rates is a risk to South Korea’s

consumer base growth, which will hurt print

packaging in the medium and long term.

South Korea is the developed market with the highest annual average growth rate for the print

packaging market in 2011-15, a position that it will keep in 2016-20.

South Korea

Country profile

0.7 0.8

0.4 0.4

0.5

0.6

0.6

0.7

0.2

0.2

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2016 2020

Bil

lio

ns



Other


segments in South Korea in

2016 and 2020 (US$)

2.4 2.7

CAGR

3.0%


dollar terms.

Source: EIU.

South Korea







Source: EIU.

3.8%

3.8%

3.1%

3.9%

3.7%

4.4%

4.5%

4.5%

4.3%

4.6%

4.5%

4.8%

0% 5% 10%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in South Korea



Source: EIU.

134 134

As the 10th fastest growing market in our study,

Turkey will grow at an annual pace of 6% in

2016-20, reaching a market size of $965m by

2020.

Demand for higher-value processed food

products is expected to rise in 2016-20,

bolstering growth in the flexible, labels & tags and

folding carton segments. However, these trends

will be largely confined to urban areas in the

wealthier western parts of Turkey.

Moves by the president, Recep Tayyip Erdogan,

such as increasing interference with the public

use of the Internet and social media, are likely to

hamper the expansion of online retail channels,

muting growth in the corrugated segment.

Recent political instability and uncertainty of how it will play out in the near future will mute some

growth in consumer expenditures and in turn the print packaging market.

Turkey

Country profile

249 293

137 160

218

251

196

218 37

42

0

200

400

600

800

1,000

1,200

2016 2020

Millio

ns



Other


segments in Turkey in 2016

and 2020 (US$)

838

965

CAGR

3.6%


dollar terms.

Source: EIU.

Turkey







Source: EIU.

6.0%

6.0%

5.1%

6.1%

6.2%

6.5%

7.8%

7.8%

6.3%

8.1%

8.0%

8.6%

0% 5% 10%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Turkey



Source: EIU.

135 135

The UK is one of the slowest markets in our study

in 2016-20, expanding a weak 1.2% annually.

Flexible and folding carton are the growing

segments for the British print packaging

market. The combination of an aging population

and an increasingly fast-paced society will

support demand for convenience, health and

wellness, and luxury food products.

Online retailing has developed strongly in recent

years, far outpacing growth in overall retail

and driving growth in the corrugated

segment. These trends will persist in 2016-20,

driven by rising mobile e-commerce (m-

commerce).

The UK was the fifth largest print packaging market in our study in 2015, but it lost a position in 2016,

owing to uncertainties around the EU Brexit vote, hurting consumer confidence and expenditures.

United Kingdom

Country profile

2.4 2.7

0.9 1.0

3.2 3.4

3.6 3.8

0.6

0.6

0

2

4

6

8

10

12

14

2016 2020

Bil

lio

ns



Other


segments in the UK in 2016 and

2020 (US$)

10.6 11.4

CAGR

1.9%


dollar terms.

Source: EIU.

United Kingdom







Source: EIU.

1.2%

1.2%

0.8%

1.5%

0.3%

1.7%

1.8%

1.8%

1.2%

2.0%

1.0%

2.7%

0% 2% 4%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in the UK



Source: EIU.

136 136

Vietnam was the smallest print packaging

market in our study in 2011. However, it is the

third fastest-growing market in 2011-15 and the

fourth fastest in 2016-20.

Vietnam will gain four positions to become the

22nd largest market in this study by 2020,

surpassing Colombia, South Africa, Chile and

Iran.

As labor costs rise in China and India, Vietnam

will attract many companies to relocate

manufacturing and print packaging activities. This

will drive growth in print packaging revenues

across all segments as exports, incomes, and

consumer expenditures rise.

Vietnam is gradually becoming a regional hub for manufacturing, as companies move their operations

from China and India to the cheaper South-East Asian nation.

Vietnam

Country profile

109 153

73

101 52

70 104

139

16

21

0

100

200

300

400

500

600

2016 2020

Millio

ns



Other


segments in Vietnam in 2016

and 2020 (US$)

353

485

CAGR

8.3%


dollar terms.

Source: EIU.

Vietnam







Source: EIU.

10.1%

10.2%

9.5%

9.6%

10.4%

10.8%

9.6%

9.7%

9.0%

9.2%

9.9%

10.2%

8% 10% 12%

Total

Other

Corrugated

Folding carton

Labels & tags

Flexible

2011-15 2016-20

Segment growth

in Vietnam



Source: EIU.

Appendix: EIU Methodology

138 138

Methodology

Methodology

To develop the market sizing for the print packaging market segments, the EIU undertook a two-

phase approach, first estimating the historical market sizes (2011-2015), then forecasting the market

sizes over the next five years (2016-2020).

Phase 1: Historical

market sizes

(2011-2015)

Phase 2: Forecast

market sizes

(2016-2020)

The EIU estimated historical market sizes using a foundation

country approach, where detailed, bottom-up estimates were

developed for a select set of countries, and then econometric

models, combined with validation checks, were used to extrapolate

these results across the remaining countries in the pool.

The EIU forecasted market sizes for 26 countries using the

historical estimates to identify the best predictive drivers. The EIU

developed econometric models based on these drivers to forecast

the market size development by segment over 2016-2020.

139 139

The historical estimation process involves a number of steps.

Phase 1: historical estimates (1/3)

Supply side financial information collected,

segmented, and analyzed per country

This data is augmented by reliable official statistics (e.g., Eurostat) and broader

official industry statistics

Trade and industry publications are then

consulted for additional insight

Initial estimate is produced

Macroeconomic variables

(e.g., GDP per capita) are incorporated into the estimation process for a

sense check

Country or product specialists are then

contacted to validate information

Internal reviews of results comparing with relevant benchmarks and previous studies

Final estimate produced

Market size data is presented to NPES and VDMA task forces for

final validation

1

2

3

4

5

6

7

8

9

Methodology

140 140

The historical estimation process involves triangulating based on a number of different

sources of intelligence.


Methodology

Source Details

Supply-side

financial

information

Company databases (e.g., Bloomberg, Orbis, Hoovers etc.) were used to identify

companies with printing capabilities in each segment. For public companies, data was

gathered from public financial disclosures (e.g., company websites, Bloomberg). For

private companies, data was gathered from databases (e.g., Orbis, EBSCO), market

research reports, specialized publications, and articles from business news outlets.

The EIU examined revenue data by business line for each company to determine the

proportion of the company’s revenue attributable to each print packaging segment and

identify the geographic breakdown. The EIU then made qualitative adjustments where

necessary to arrive at packaging-specific country revenue figures. Upon exhaustion of

company-level data collection, the EIU determined the top companies and associated

market share in each segment by country.

Official country

statistics

Where available, the EIU used official statistics as a lead or complement to the company-

level supply-side approach. Prime examples included two countries: Colombia (DANE)

and Germany (Eurostat).

Expert

interviews

Additionally, we interviewed print packaging market experts to vet data points and, where

necessary, assumptions to validate estimates (e.g., for top competitive tier market share)

and the direction of the print packaging industry.

141 141

The bottom-up estimation is intensive, so the EIU adopted a “foundation country” approach, focusing

its detailed supply-side research efforts on a carefully selected set of countries, and used these

findings to carefully extrapolate estimates to the remainder of the countries.


Methodology

EIU research and market sizing

estimations

Foundation

country 1

market size

Foundation

country 2

market size

Foundation

country X

market size […]

Country 1a

market size

EIU extrapolation methodology, including robustness and

data checks

Country 1b

market size

[…]

Country 2a

market size

Country 2b

market size

[…]

Country Xa

market size

Country Xb

market size

[…]

To develop historical estimates for the remaining markets, the

EIU focuses its research efforts on a carefully selected set of

“foundation countries”.

Based on the EIU’s experience and understanding of how

macroeconomic factors affect specific industries and insights

draw from trends in existing datasets and secondary research,

the countries were separated into 5 groups. A foundation

country—the most representative member of each group—was

selected to focus on in primary and secondary research to

maximize the accuracy of the forecasts.

Note that the US, Germany, China, India and Japan were

deemed sufficiently unique and important to warrant being

analyzed separately from the five groups, and were considered

foundation countries without an associated group.

The historical market sizing estimates for the foundation

countries are then the robust basis of an extrapolation exercise

to estimate historical market sizes for other countries.

The EIU applied a number of checks and qualitative

adjustments to the extrapolated market size estimates, to

ensure that they reflected the EIU’s understanding of the local

dynamics in those markets.

142 142

The print packaging markets of the 26 countries were then forecasted based on assumptions about

future macroeconomic performance, business environment, demographics, and the state of

development of the print packaging market.

Phase 2: forecast estimates

Methodology

Traditional forecasting

process

Preliminary analysis of trends

and drivers

Run model with historical data

Test significance and accuracy

of hypothesis

Investigate and apply forecast

of key drivers

Scenario analysis and review

The EIU leveraged our own database, along with secondary research and primary

interviews, to construct statistically-driven econometric models that estimate the

market size and projected growth trends across all four print packaging segments.

Model specification

Statistical models were derived by analyzing internal and external databases

to compile a comprehensive list of relevant explanatory variables (over 80

indicators).

The EIU ran statistical analysis to identify the strongest explanatory variables,

including controls for time series autocorrelation and other corrections.

The EIU ran stepwise regressions to identify the best-fitting predictive drivers,

and then qualitatively assessed each model output to determine whether they

were economically sound. The EIU specified individual forecast models for

each country and each print packaging segment (a total of 104 forecast

models), based on the best-fitting predictive models.

Forecasts and qualitative input

The EIU refined the forecasts, making qualitative adjustments based on

insights primary and secondary research and our own macroeconomic

expertise.

Appendix: Definitions

144 144

The EIU uses industry-standard terms and definitions to capture the print packaging

segments.

Print packaging segment definitions (1/2)

Definitions

Segment Definition

Flexible print

packaging

A package or container made of materials that when filled or closed with content, changes in

shape. Substrates include plastic, film, foil, or paper, and can be used separately or in

combination to produce the package. Flexible packaging materials—liners, pouches, wraps,

stretch film, and bags—cover many consumer verticals including retail food packaging,

pharmaceuticals, tobacco, and household goods.

Labels & tags

packaging

Packaging that is attached to another container by label or tag. Self-adhesive, wet-glue and

shrink-sleeve labels are the three main label types used in packaging. Printed examples of

labels are on cans, jars, industrial containers, stickers, and wine and spirits bottles. This

segment also includes RFID tags.

Self-adhesive labels are made of paper that is die-cut and attached to a release

paper. Self-adhesive (or pressure-sensitive) labels are applied by taking the label

from the release paper and applying it to the final product.

Wet-glue labels are made of paper substrates that are not pre-coated with

adhesives but rather are applied with glue once the package is filled.

Shrink-sleeve labels are made of plastic or polyester film materials that contour to

special shapes. Shrink-sleeve labels do not use adhesives, but rather heat, to

tightly conform to a container allowing for 360 degrees of graphics and a

moisture- and friction-proof product.

145 145

The EIU uses industry-standard terms and definitions to capture the print packaging

segments.

Print packaging segment definitions (2/2)

Definitions

Segment Definition

Folding carton/

paperboard

print packaging

Semi-rigid boxes made of board that varies in weight (thickness). To produce folding carton

packaging, the paperboard is cut, folded, laminated, and finally, printed on for transport to

packagers. Cartons are shipped flat to packagers and are then folded into proper shape,

manually, or on an automatic filling line, as containers for final products. Folding carton is

used frequently for consumer goods and pharmaceutical packaging.

Corrugated

print packaging

Multi-layered rigid boxes made from two sheets of paper called, liners, glued to either side of

a corrugated inner ‘fluting’, which consists of connected arches, allowing for greater strength

and resistance. Once the substrate is formed, the corrugated board can be cut and folded to

produce a custom-manufactured container, and then printed on using a variety of print

methods depending on run size and design needs. Corrugated packaging is used primarily

as a shipping container for various industries, as well as for point-of-purchase displays and

pallets

Other print

packaging

Direct printing on two substrates: rigid plastics and beverage cans. Beverage cans includes

aluminum and steel cans that are printed on for alcoholic, soft drinks and other beverages.

Rigid plastics includes hard plastic containers, including bottles and containers, that are

used for consumer goods (such as food products, household items, and beauty and

cosmetic products) and that are directly printed on.

Source: Primary interviews with industry experts.

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