Wood Packaging Market By Product Type (Wooden Pallets, Wooden Containers ), By Application (Food & Beverages, Shipping, Transportation), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Global Industry Share, Size, Outlook, and Opportunity Analysis, 2024-2031
Market Overview
[150 Pages Report] Wood Packaging Market: The wood packaging market report analyzes the market size, current trends, competitive landscape, and future market outlook. The demand for wood packaging technology is increasing due to the growing need for eco-friendly and sustainable packaging solutions. The market is witnessing a surge in demand from the food and beverage, and consumer goods industries in Asia-Pacific are growing. The competitive rivalry is intensifying with major players such as Brambles Ltd., Smurfit Kappa Group, PalletOne Inc., and others actively operating in the market.
Wood packaging is the broad word for packaging solutions such as containers, pallets, boxes, and others constructed of wood to support, protect or carry a commodity. The IPPC seal, which substitutes the plant passport for intracommunity transport and the phytosanitary certificate for export, is on wood packaging material prepared by ISPM 15. This respective seal has a unique code for each company. All wood packaging complies with ISPM 15 in the European Union (EU). According to the relevant regulation, all businesses producing wood packaging must utilize treated and debarked wood. When imported, specific wood packaging materials must be pre-notified in TRACES.NT and submitted to phytosanitary inspections by the ASTA. Companies handling wood packing material in Luxembourg are inspected and approved by ASTA. Packaging is the huge industries such as Liquid Packaging, Packaging Adhesives, Paper, Flexible packaging, and other industries includes.
Market Scope
| Metrics | Details |
| Market CAGR | 4.45% |
| Segments Covered | By Type, By Application, and By Region |
| Report Insights Covered | Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth, Demand, Recent Developments, Mergers and acquisitions, New Product Launches, Growth Strategies, Revenue Analysis, and Other key insights. |
| Fastest Growing Region | Asia Pacific |
| Largest Market Share | North America |
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Wood Packaging Market study analysis offers an in-depth outlook on the market containing quantitative and qualitative data. It gives an outlook and forecast of the global market based on market segmentation. It also provides global Wood Packaging Market size, and growth, along with the latest trends, opportunities, and forecast till 2029 for the global market with esteem to major countries such as the United States, Canada, Brazil, Germany, Italy, Spain, United Kingdom, Russia, European countries, United Arab Emirates, Saudi Arabia, South Africa, Japan, China, India, South Korea, Australia, and rest of the countries over the globe.
Among all regions, the North American region is expected to hold the largest share of the global market over the forecast period. The wood Packaging Market in the United States and Canada produces the utmost share. Whereas the European Wood Packaging Market is projected to continue its presence globally from 2023 to 2030.
Market Dynamics
The growing switch to wood-based packaging from single-use plastic packaging is a major market driver for the respective market. Nonetheless, insect infestations and customs rejections restrain the market's growth.
Growing switch to wood-based packaging from single-use plastic packaging
Innovative bio-based materials as substitutes for polymers derived from fossil fuels for packaging applications have been developed in response to growing environmental concerns from businesses and consumers. There is much space for improvement and researchers are attempting to develop sustainable plastic substitutes that might be just as useful, affordable, and common as conventional plastics. A promising strategy that can potentially cut greenhouse gas emissions significantly is the development of bio-based packaging materials. Alternatives to plastic made from biomaterials are produced using plant-based raw materials, which help plants absorb atmospheric CO2 as they grow.
These bio-based products are almost carbon-neutral when recycled or composted since CO2 is released back into the atmosphere (as the manufacturing process generates negligible greenhouse gasses). In the last ten years, bio-based materials have increased significantly in the sustainable packaging sector, signaling a shift toward waste reduction, greener packaging, and a concentration on biodegradable and renewable materials. Currently, just 1% of the packaging materials used in Europe and North America are made of bio-based materials. However, the need for bio-based packaging materials, such as wood, is anticipated to increase quickly over the next few years and surpass 9 million tonnes yearly by 2023. As a result, the growing switch from single-use plastic packaging could be recognized as a major market driver.
Insect infestations and customs rejections
By requiring treatment of WPM to kill embedded insects using heat, fumigation, or other permitted treatments, the international regulation known as ISPM#15 (International Sanitary and Phytosanitary Measures #15), implemented by the U.S. in 2006, was intended to tackle the infestation problem. A government stamp identifies treated timber. According to research, this has only been partially successful and the U.S. often obtains WPM that bears the label "treated" while being infested with insects. The respective scenarios can happen if the treatments are not completely successful, applied incorrectly or not, or if trading partners falsely tagged the wood.
About 700 incoming shipments to the United States are found to have bug infestations in WPM annually by Customs & Border Protection. Depending on the kind of insect, this could lead to a significant punishment for the importer or shipper (up to the value of the cargo) and possibly even a requirement that they promptly re-export the contaminated cargo. The re-exportation can be particularly expensive if a ship must be completely turned around and transported somewhere else due to infected WPM. For instance, the Pan Jasmine, a 590-foot vessel flying the flag of Panama, was recently turned around by CBP before it could land at the Port of New Orleans because it contained contaminated dunnage. Each time such an incidence occurs, importers frequently lose hundreds of thousands of dollars and in some situations, the cumulative loss from a single occurrence might reach millions.
COVID-19 Impact on Market Growth
The earliest waves of COVID-19 had a detrimental influence on the global wood packaging market, just like any other market. The necessity for specialized workers, substantial industrial reagents, and large-scale machinery for the industrial-scale manufacture of wood packaging has delayed its production. Curfews in the industry and the requirement for social isolation during the pandemic greatly hindered production. The availability of raw materials required to produce wood packaging and completed items was significantly restricted by the COVID-19 pandemic's worldwide lockdown. Supply and demand dynamics in the wood packaging market were significantly altered.
Furthermore, price rises in the wooden pallet and packaging business were considered unavoidable due to the pandemic's effects on the supply chain, according to the European Federation of Wooden Pallet & Packaging Manufacturers. As described in the FEFPEB's quarterly Pallet Timber Price Index, independent indices from the member states of Europe showed a significant price increase during Q4 2020 and it is anticipated that prices will climb throughout Europe in 2021. Additionally, lockdowns and restricted access to raw materials reduced overall activity in end-use industries, which reduced demand for wood packaging. However, since the prohibitions were abolished, the global market for wood packaging has increased significantly. The market is further stimulated by the anticipated expansion of the food and beverage, shipping, and transportation industries, among others, in the post-COVID-19 environment.
Market Segmentation Analysis
The global wood packaging market is classified based on type, application, and region.
The compliance to handling devices, recyclability, reusability, and heavy end-user application allows pallets to dominate the type segment
Wooden pallets are crucial to the global handling and distribution process because they allow for transport and storage platforms' safe, efficient movement. For instance, according to Rose Pallet Company, the U.S. wood industry collects 42% of the annual increase in hardwood timber that is physiologically available for harvest. Additionally, more than 1.8 billion pallets are used daily in the U.S. and 93% are made of wood.
In many nations, pallet building is becoming more standardized. For instance, Europe's most common size of wood pallets is an 800 mm × 1,200 mm unit due to the adoption of the EUR pallet (defined by the European Pallet Association). However, in North America, where the majority of pallets in use are custom-designed to meet transit and shipping configurations, wooden pallet sizes and designs are significantly less standardized. Pallets are created in various sizes and layouts to support handling devices (often forklifts) and loads, despite having standardized versions.
Statistically, 70% of all wood pallets are recycled, which is a lot more than aluminum, paper, or plastic. Additionally, trees are typically not felled to produce pallets since a by-product of the wood used to build homes and furniture is the wood used to make pallets. The food and beverage sector uses pallets the most globally, second by the chemical and pharmaceutical sector than agriculture. Further, The main benefit of using wooden pallets for packaging is that they have a four to five-year lifespan and can be fixed for reuse if they get broken and reused. All the aforementioned factors allow the pallets segment to dominate the type segment of the global wood packaging market.
Market Geographical Share
The large-scale adoption of wood pallets in Asia-Pacific’s packaging and shipping business, along with growing investments in the region, boosts the region’s wood packaging market
Since pallet utilization has been relatively high in the Asia-Pacific area throughout the forecast years, Asia-Pacific is heavily favored to dominate the regional segment of the global wood packing market. For large-scale imports and exports of products, the region exhibits the largest utilization of wooden pallets. The most developed markets in the upcoming years are likely to be found in nations like China, India, and Japan. Furthermore, the Asia-Pacific pallet market has been characterized by the sustainability theme. End-user sectors that choose goods with longer lifespans can be identified, encouraging regional producers to innovate on these lines. Pallet makers have also collaborated on similar projects.
Additionally, the area has seen money being injected, accelerating market expansion. For instance, Morgan Stanley and Leading Enterprise in Advanced Pooling announced in January 2021 that the infrastructure-focused fund Morgan Stanley India Infrastructure had invested USD$ 25 million in LEAP India. One of the pivotal players in the country's pallet pooling market, LEAP India, wants to increase its asset base from 4 million units, which comprises pallets, among other things, to 6 million units. The presence of major wood packaging manufacturers further propels the market’s growth along with investments and government subsidies available in the region.
Companies and Competitive Landscape
The global wood packaging market is highly dynamic, competitive, and filled with global and local producers. The market is fragmented due to the presence of numerous large-scale manufacturers such as UFP Industries, Shur-way Group Inc, Rowlinson Packaging Ltd, C&K Box Company, Inc., Totre Industries, Palcon, Ongna Wood Products, ARRINGTON LUMBER & PALLET CO., NEFAB GROUP, and Mondi. Pivotal market stakeholders employ tactics like mergers, acquisitions, product launches, contributions, and collaborations to gain competitive advantages and recognition in their respective markets.
For instance, PalletOne, Inc., a subsidiary of UFP Industries, has purchased a 50% equity position in Dempsey Wood Products, LLC as of June 27, 2022. PalletOne has options under the purchase agreement to buy the remaining 50% of Dempsey in three years. Ronald Dempsey established Dempsey Wood Products in 1988. The company operates out of a single facility in Orangeburg, South Carolina, where it manufactures kiln-dried timber, pallet lumber, and other industrial wood goods. Sales for Dempsey in 2021 totaled US$68.9 million.
Since larger mills manufacture less of this kind of timber, Dempsey's industrial lumber, a crucial component of pallet operations worldwide, has been in limited supply. PalletOne's investment in Dempsey benefits UFP industries and affiliates such as PalletOne, Inc. as it helps the aforementioned parties to secure and expand a crucial long-term supply source of the special Dempsey's industrial lumber.
