The Africa Flexible Packaging Market is expected to register a CAGR of 5.57% over the forecast period from 2022 to 2031. Led by rising demand from the packaging industry and increasing demand from consumer goods, the flexible packaging market in the African region is expected to increase in the forecasted period. The way consumers view and interact with packages is changing. Due to the growing focus on sustainability, traditional rigid packaging solutions are being replaced by innovative and more viable flexible packaging. Increasing market demand for consumer-friendly packages and enhanced product protection is expected to gain significant traction for flexible packaging as a feasible and cost-effective alternative.
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– Moreover, the African region accounts for a significant and growing portion of worldwide food and feed imports. Despite the violence and political uncertainty hanging over parts of the region, the growing populations and rising incomes in the region drive higher demand for primary food and feed grains, soybeans, cotton, and meats. However, growing demand, coupled with a climate-constrained production potential, has forced the region to rely increasingly on food imports, raising its trade profile.
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– Various innovations have made it possible for the development of sustainable and customized flexible packaging solutions, which has led to an unprecedented rise in the flexible packaging market. Food and consumer goods imports into Africa make up a significant share of the flexible packaging market in the region. Rising demand for packaged foods, a need to keep costs down, and investments in food processing propel the growth of flexible packaging in the region. According to USDA Foreign Agricultural Service, the volume of rice imports to north Africa in 2018/2022 was 1170 thousand metric tons, and in 2022/2031* was 985 thousand metric tons.
– Moreover, modern retailers are also winning a larger share of the region’s channel distribution. In the last two years, in Egypt, the shift from grocery retailers and open markets towards supermarkets and hypermarkets has continued. Hypermarkets have shown the fastest growth rates in value share. They continue to offer comprehensive product ranges at competitive prices against traditional grocery retailers due to economical bulk packs and attractive price promotions. Moreover, curfews and safety concerns amid political upheaval have made hypermarkets an engaging environment for consumers. Metro, Hyper One, Carrefour, and Spinneys are burgeoning in the significant city outskirts.
– In April 2022, Mondi, which engages in paper and packaging, has announced the temporary suspension of production at its Merebank mill in South Africa. The mill, which has a production capacity of 270,000 tonnes a year, has been closed to remain in compliance with the government regulations and help fight the spread of COVID-19. However, Mondi in Africa has seen growth in consumer-related uses in flexible packaging, as well as consumer and e-commerce applications in packaging and engineered materials businesses. However, the company has faced thin disruptions to its supply chain, and a rise in costs and delays in logistics with the outbreak of COVID-19.
Key Market Trends
Pouches are Expected to Hold Significant Share
– Pouch packaging is rapidly gaining popularity, due to its being a highly-convenient and portable packaging solution. Stand-up pouches offer benefits and protect contents from moisture, vapor, odor, pests, air, and light. Consumers’ preferences towards aesthetic appeal and convenience of pouches with value-added attributes such as spouts, zippers, or handles are impacting the growth of stand-up pouches. The lighter weight, reduced material use, and lower shipping cost of stand-up pouches than the rigid packaging are benefitting the packaged food producers. With the beverage industry increasingly consuming pouches in the region, the demand from the market is expected to increase.
– According to a recent study published by the Flexible Packaging Association, rigid PET containers have a fossil fuel usage that is 504% greater than that of the flexible stand-up pouch with zipper. The weight of the package is six times heavier. Furthermore, the availability of numerous printing options for pouches helps innovative print designs on the pouch, thus, improving the aesthetic appeal of the product and reflecting the brand. Growing innovation has seen the emergence of flexible foam, papers, and aluminum foils, replacing the current use of plastic as a raw material for the manufacturing of pouches.
– Growing innovation has seen the emergence of flexible foam, papers, and aluminum foils, replacing the current use of plastic as a raw material for the manufacturing of pouches. Further, countries in Africa are making considerable efforts to increase local production, growing investments from Asian and European countries. As a result, the existing foreign players, like Lupin and Dr. Reddy’s, are expected to expand their production capabilities. This factor is expected to boost the demand for healthcare packagings, such as blister packs, caps and closures, pouches, and IV bags.
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– Increasing the adoption of pouch packaging for liquids, such as juices, detergents, and edible oil, has seen the emergence of pouches with excellent oxygen-barrier properties, to preserve the liquid inside, thus, ensuring that the contents stay uncontaminated. In January 2022, Nestle launched its product called Nesquick All Natural powder that comes in a recyclable paper pouch in five ingredients, which will add to its existing Nesquick range. Nesquick all-natural has less sugar than the classic product, using raw star cane juice instead of white sugar, and with cocoa responsibly sourced from West Africa under the Nestle Cocoa Plan.
South Africa is Expected to Hold Major Share
– Despite its sophisticated food manufacturing sector and strong consumer market, South Africa is currently facing slow domestic economic growth. Manufacturers are now facing significant challenges in controlling production costs while still meeting consumer demand, which has remained steady. This could see more investment in better packaging to boost efficiencies and help manufacturers manage expenses. South African food manufacturers are also increasingly looking to the export market, meaning they will likely focus more on flexible packaging that supports product consistency and quality to meet global food standards.
– The South African government is prioritizing the sector: food and beverages are the most significant components of South Africa’s manufacturing industry, with the government actively encouraging further development of agriculture and the agro-processing industry. South Africa’s Department of Trade and Industry has, in the last three years funded the food-processing sector to the value of ZAR 736 million in incentives, while its Enterprise Investment Programme (EIP) incentive has disbursed funds of ZAR 636 million and facilitated investments of ZAR 3.7 billion in the sector.
– Flexible plastic packages are mainly used for the packaging of beauty products, as they can protect the inside materials from damages caused by oxidation and improve the shelf life. However, the cosmetics industry faces several challenges in South Africa due to the weakening economic conditions of the country. The country’s GDP growth has slowed down significantly. Also, high unemployment and less personal disposable income are certain factors creating challenges for the cosmetic industry. Hence, the flexible packaging related to the personal care market is expected to exhibit a slow growth rate.
– In September 2022, Huhtamaki agreed to acquire the majority of Everest Flexibles (Pty) Limited, a privately-owned flexible packaging manufacturer in South Africa. With the acquisition, the company will expand its flexible packaging manufacturing geographical footprint into South Africa, further strengthening its emerging market position. The product portfolio and customer section of Everest are complementary to those of Huhtamaki. The business is expected to be acquired for an enterprise value of EUR 58 million.
The Africa Flexible Packaging Market is moderately fragmented with significant players such as Hana Packaging Limited, PrimePak Industries Nigeria Ltd, Constantia Afripack Flexibles Ltd, Huhtamaki Group, etc. occupy the majority of the market share. The companies in the region are forming multiple partnerships and mergers to increase their market share.
– February 2022 – Mondi has launched an innovative mobile app for the sack kraft paper market. Constantia Afripack utilizes the app, which extremely useful and a huge help in their everyday work. In particular, Ithe company appreciated the fact that it can quickly determine how substantial the remainder of a paper reel is and calculate how much paper is needed for a specific number of sacks, as well as the potential material savings that can be made.
– April 2022 – Huhtamaki inaugurated its flexible packaging unit in Egypt. The investment ensures the company’s entry into manufacturing flexible packaging in the African region. The unit is located in the greater Cairo area and will provide Huhtamaki’s flexible packaging solutions to customers in Egypt as well as export its products into other African countries and Europe. The manufacturing unit is built on a land area of approximately 37,000 square meters, with significant space for future expansion.
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