2024 and the packaging industry
15 Jan 2024
2023 was a year where market stability has triumphed over market growth for the corrugated industry.
Demand for corrugated board, and subsequently packaging, dropped by single figure percentage points as consumer shopping habits changed and financial challenges for households and business across the UK continued to be present.
That said, the demand for corrugated as a packaging material continued to grow as more businesses sought to elevate their sustainability credentials and satisfy consumer demands for sustainable, recyclable packaging across the supply chain.
Now as 2024 gets underway, Gareth Stell, Logson Group Sales Director offers his thoughts on what 2024 holds for the corrugated industry.
A re-alignment of the marketplace after the pandemic was perhaps inevitable and I believe this is what occurred in 2023.
The demand for corrugated rocketed during the pandemic when online shopping was king, and people were spending money on commodities rather than experiences. Now that life is normal, it was to be expected that this would impact on other markets and revenue streams also.
2024 will also bring a General Election and we hope that all parties realise the importance of the UK manufacturing sector and the corrugated packaging industry within that as it helps to keep production lines and supply chains moving.
So, whilst demand for corrugated packaging may have dipped a little, there is still much to be positive about.
Performance and Recyclability
Corrugated is a robust material that continues to be in high demand for its strength, versatility, and recyclability. Indeed, in the last CPI annual review two very interesting statistics were present.
Tonne for tonne, corrugated packaging industry; stronger today than it was 20 years ago and, as a direct result of actions taken by the industry, the carbon footprint of a corrugated box is continually reducing. FEFCO new cradle to grave carbon impact assessment shows that it has reduced to 491kg CO2- eq/t.
Pleasingly, this shows that not only is the sustainability of corrugated positively impacting on our customers businesses, the paper making industry is also delivering enhanced results.
Coupled with positive recycling rates for corrugated of over 80% there is much optimism surrounding the corrugated industry and the continued journey to net zero.
Informative packaging
In addition, as supply chains become more sophisticated, we know from experience that packaging needs to support this.
Whether it’s QR codes, EPR information, product descriptions, information to support warehouse management systems and stock control, or the fact that your packing line is becoming automated, corrugated packaging can deliver in so many ways due to its flexibility and the way it supports the digital age.
And it’s about interaction with consumers – there are some amazing designs that actively encourage customer engagement driving superb content for social media – and the impact of Artificial Intelligence (AI) will undoubtedly filter down to elements of the packaging industry.
Rules and Regulations
2024 will also be the year of enhanced rules and regulations surrounding the packaging industry. It appears that the Extended Produce Responsibility (EPR) rules will be fully implemented in 2024.
Aiming to ensure that businesses that use packaging which ends up with consumers will be made responsible for the costs of dealing with the waste generated as part of that process.
Simultaneously, it will also impact, through increased charges, on businesses which choose less sustainable packaging materials. This means higher fees for plastic packaging when compared with those attributed to paper-based packaging materials.
Pushing the boundaries of design
Design continues to pivotal to the success of corrugated based packaging solutions and our teams are renowned for exceeding expectations with cutting edge designs that really challenge the capabilities of corrugated.
With a full suite of brand-new AG/CAD tables and software, combined with the decades of experience our teams have, we know that 2024 will be another exceptional year for creating some of the best packaging solutions in the industry.
So, as we embark upon 2024, we can say that we expect the market to remain static for the first half of the year. However, after an election, confidence typically returns along with increased stability, and we would expect this to translate into an upturn in demand.
In the meantime, remember that our teams are available to support you with all types of corrugated packaging. We look forward to working with you.