• February 28, 2024

Packaging Market to Top $21 Billion

 Packaging Market to Top $21 Billion
Photo: Taco Tuinstra

The global tobacco packaging market will reach a value of around $21.05 billion by 2029 increasing at a compound annual growth rate of 3.2 percent, according to a new report by Precedence Research.

The Asia Pacific region has established itself as the dominant market, commanding a 34 percent market share in 2022, and it is poised to experience the most rapid growth throughout the projected period. In particular, China stands out as the largest tobacco exporter and manufacturer. The nation is projected to become the global leader in the tobacco packaging market by 2032.

Many tobacco packaging developments are driven by regulation, according to Precedence Research. For instance, in July 2022, India’s Ministry of Health and Family Welfare, enacted regulatory changes to the Cigarettes and Other Tobacco Products (Packaging and Labeling) Rules, 2008, introducing updated health warning requirements for all tobacco product packaging within the country.

Numerous countries have instituted stringent measures to reduce smoking rates and safeguard public health. These regulations encompass requirements for graphic health warnings, mandates for plain packaging, and strict limitations on tobacco advertising.

Meanwhile, suppliers of tobacco packaging are shifting toward recyclable and eco-friendly solutions. This transition reflects a broader global trend towards sustainability and environmental consciousness, driven by consumer preferences, regulatory pressures and corporate responsibility initiatives, according to Precedence Research.

In March 2023, ITC of India reaffirmed its commitment to sustainability, emphasizing its ongoing endeavors to minimize plastic waste. The company said it reduced the plastic waste it generated by 60,000 metric tons. ITC is actively exploring environmentally friendly alternatives to single-use plastics in their tobacco product packaging, focusing on materials such as recyclable and biodegradable paperboards.

In April 2022, British American Tobacco introduced its Vype e-cigarettes in packaging crafted from a blend of recyclable paperboard and other materials. BAT has committed to an ambitious sustainability goal to ensure that all Vype packaging becomes fully recyclable by 2023.

In May 2022, Japan Tobacco announced its intention to render all cigarette packaging recyclable by 2025. This initiative involves the utilization of a hybrid composition consisting of recyclable paperboard and plastic materials.

Like many other industries, the global tobacco packaging market has undergone substantial disruptions and transformations due to the Covid-19 pandemic. Lockdowns, travel restrictions and labor shortages disrupted the manufacturing and transportation of packaging materials. This resulted in delays, extended lead times, and increased manufacturer costs. To address these challenges, companies adapted by diversifying their supplier base, optimizing inventory management and exploring alternative sourcing options.

Covid-19 has also significantly altered consumer behavior, consequently impacting the tobacco industry and, by extension, the packaging market. Measures such as social distancing, health concerns and economic uncertainties led some smokers to reduce or quit smoking altogether. This shift in demand prompted tobacco companies to reassess their product offerings and packaging strategies. Some manufacturers started offering their products in smaller pack sizes, for example.