A report by Smithers Pira expects the worldwide packaging services market to reach $50bn by 2022.
The report, titled ‘The Future of Business Models in Packaging to 2022’, estimates that the value of packaging services increase at a rate of 9.5% per year, which was worth $33.7bn last year.
Though the traditional packaging market still revolves around the same materials – glass, paper and fibreboard, plastics, wood, and metal, new business models are increasingly offering the catalyst to explore new materials, markets, and high-value market applications.
The report claims to have analyzed and quantified areas such as packaging design, materials, testing, contract packing, predictive maintenance and consumer research.
Contract packing is considered to be largest of the segments with at least 70% of the value. Priorities for packaging services can also vary along the value chain and the positions are also not fixed.
Vertical development of a business model can be normal where services that belong in another step are integrated in the offering. An example of this is the packaging converter that also provides design services.
Most of the time, packaging converters have the skills and equipment in house or hire the needed skills for setting up a design studio when offer design services. This adds value to customers and can be a win-win situation if the result is an upgraded design leading to increased sales. It can also help in building a converter’s own brand as a service provider and gives advantage over competition and can bring in a revenue stream of its own.
Such evolution is being driven by a series of technical developments were examined in the study and they include e-commerce which is growing very fast and revolutionized the way consumers shop by adding unlimited product range to and also changes the way brand owners interact with their consumers.
Digital printing is also changing the way how firms are communicating with consumers and it has become a means to personalize products. On the other hand, smart and intelligent packaging has also opened up a range of new possibilities for the packaging industry and for brand owners.
Industry 4.0 is also expected to change packaging business and will be needed for organizations to get on board to use the benefits from automation, data exchange, IOT and communicating robots on factory floor and in distribution chains.
Analysis of big data including sensor data for temperature, vibration, rotation speed can now allow packaging companies to improve and rationalize and implement predictive, rather than provide reactive maintenance service.
As per the report, the market position for many of the emergent technologies is still fluid, creating a premium for new business models where innovation and entrepreneurship can be integrated.