The Global Wood Packaging Market is expected to grow at a CAGR of 3.7% during the forecasting period (2021-2028), from its recorded value of USD XX million in 2020, reaching USD XX million in 2028.
Wood packaging material sometimes referred to as non-manufactured wood packing (NMWP) or solid wood packing material (SWPM), is a hardwood and softwood. Wood packaging materials are different from wooden products for example plywood, particle board, oriented strand board, veneer and wood wool. These are created by using glue, heat, and pressure or a combination.
Wood packaging materials are used in supporting, protecting, or carrying goods. Different examples of wood packaging materials include pallets, crates, boxes, cases, bins, reels, drums, load boards, skids, pallet collars and containers.
Due to rising awareness about the negative impact of plastic usage on the environment, the market for wood packaging is expected to grow in the forecast period.
Similarly, high demand from building and construction applications due to its rigidity and resistance to deformation and breakage, as well as the fact that wood is one of the most widely used packaging solutions for fragile and heavy applications, are expected to provide various growth opportunities for the wooden packaging market over the forecast period.
North America dominates the wood packaging market with 55%, owing to the increasing food and beverage industry in the region, because of its ability to absorb bacteria naturally, which helps protect these products from cross-contamination.
However, some wooden packages such as wooden crates are usually custom made, so they can be expensive. The untreated wood packages can easily become contaminated with fungi and bacteria. Moreover, the fluctuation in the price of the raw material will hinder the market growth.
Market Dynamics
Drivers
- Growth in the construction industry and rising industrial production
- Increasing shift towards adopting wood packaging over plastic packaging
Restraints
- Non-availability of raw materials and high contamination chances with fungi and bacteria
Growth in the construction industry and rising industrial production
Packaging industry has been growing at an unprecedented rate for many decades. The key players' launch has different types of packaging materials to overcome all the existing challenges, and reducing environmental impact is one of the prime factor the packaging industry
Wood packaging is one of the most accepted types of packaging which largely consists of wooden pallets, cases and boxes which are made of wood. These are created by using glue, heat, pressure, or a combination and are used to support, protect, or carry goods. Different examples of wood packaging materials include pallets, crates, boxes, drums, load boards, skids, cases, bins, reels, pallet collars and containers
Growing the construction industry and rising industrial production is one of the prime factors supporting wood packaging growth in recent times. Growing demand for industrial product packaging has resulted in a wide range of rigid and flexible packaging such as wood, which are utilized for shipping big consignments to transport the building products between suppliers and construction sites
For instance, the Indian government has initiated projects, such as ‘100 smart cities’ and ‘Housing for All by 2022,’ which are estimated to accelerate the Indian construction market over the forecast period
Also, in 2020, the construction industry value in China amounted to US$ 1,049 billion. The government has also planned to focus on upgrading the infrastructure, particularly in small and medium-sized cities. The construction industry is forecast to grow continuously at around five percent annually owing to increasing government investments
Geographical Analysis
South America is one of the high-growth economic regions in the global wood packaging market, estimated to account for a share of 1.78% in 2019.
Increasing trade activities, growing e-commerce industry in this region and the presence of abundant natural raw material resources are some of the major driving forces that are propelling the growth of the South America wood packaging market. South America wood packaging market valued US$ 1107.00 million in 2019 and is estimated to reach US$ 1474.55 million by 2027, growing at a CAGR of 4.1% during the forecast period.
According to a survey done by Exim bank India, the economies of Eastern Europe, Central and South America, the Middle East and Africa together contributed 19.4% of world packaging consumption in 2018.
The global packaging industry is a dynamic industry and is expanding rapidly in recent years, which was around US$ 876 billion in 2018. This global growth is primarily driven by factors such as increasing pharmaceutical, food processing, manufacturing industry, FMCG, healthcare sector and ancillary industries basically in the emerging economies such as China, India, Brazil, Russia and few other East European countries.
As Brazil is one of the rapidly growing economies worldwide and has vast natural resources of wood, it is the dominating wood packaging market in South America with a market share of 79.78% in 2019. The Brazilian wood packaging market was worth US$ 883.16 million in 2019 and is expected to reach US$ 1204.40 million in 2027 with a growth rate of 4.4% in the forecast period.
The per capita consumption of packaging in Brazil is around 32 kg which is somewhat low compared to countries like the U.S., Germany, China and Taiwan, but high compared to India and other developing and undeveloped countries.
According to industry insiders, the Brazilian packaging market is the fifth-largest in the world, having approximately 1.5% of GDP in sales, with Brazil being the seventh-largest economy in the world by nominal GDP. In Brazil, the packaging sector has strong ties to environmental enterprises and tries to adapt to the demands of environmentally friendly production with more sustainable and recyclable packaging.
It has recently implemented some strict rules regarding wood packaging, which have significantly affected the market. For instance, The Brazilian Ministry of Agriculture, Livestock and Supply (MAPA)1 implemented a new regulation through Normative Instruction No. 32 of 23 in September 2015, called IN 32/2015 that came into force from 1st February 2016. IN 32/2015 regulates the methods for the control and phytosanitary certification of wood packaging material made from raw wood and accompanying import and export shipment with the aim to decrease the danger of introduction and spread of quarantine pests.
Brazil is one of the most influential markets in terms of forest products. The four major Brazilian forest product companies are Eldorado Celulose e Papel, Fibria Celulose, Klabin and Suzano Papel e Celulose.
Fibria and Eldorado are wholly focused on the production of bleached hardwood kraft pulp and export it to other countries. Klabin is the biggest producer of linerboard, cartonboard, industrial bags and corrugated boxes in Brazil and also manufacturers a small volume of non-integrated market pulp.
Since the packaging industry is likely to grow on a par with consumption, the wood packaging market in Argentina is growing gradually from US$ 85.46 million in 2019 to US$ 105.52 million in 2027 with a growth rate of 3.1% in the forecast period. The wood packaging sector in Argentina is mainly controlled by small and medium enterprises.
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