The packaging industry in Spain is expected to register a CAGR of 12% during the forecast period (2021 - 2026). The industry comprises more than 2,100 companies, which employ over 70,000 workers. These numbers are expected to increase shortly.
- The increasing demand for craft beers, with a desire for quality products, is expected to drive the packaging industry in the region. For instance, Pertainer, in 2017, for its PET packaging did see an increase in demand from micro and craft brewers in Spain and Portugal.
- The increasing need for small and more convenient packages, exceptional presentation, and strong visual impact are some of the factors that would contribute to the growth of the packaging industry in the region.
- For instance, Sealed Air's vacuum packaging the Cryovac VST tray skin has proved to be a success for Globalimar, the fish and seafood processor. The packaging uses a soft vacuum that does not distort the tray support, offering a balance between cost and quality, ensuring the shelf life of the product, and a reduction in retail shrinkage due to the strong oxygen barrier properties of top film.
- However, certain regulations imposed by the government to preserve the natural habitat from getting polluted, which would affect the growth of the packaging industry over the forecast period. For instance, in April 2019, the Canary Islands, a Spanish archipelago, has imposed International Standards for Phytosanitary Measures No. 15 (ISPM 15) compulsory for wood packaging and pallets on all its imports and exports.
Key Market Trends
Paper Based Packaging is Expected Hold a Significant Share
- To protect, preserve, and transport a wide variety of items, paper-based packaging is an efficient and cost-effective method. There are various types of paper packaging used by many end-user industries, such as Containerboard, paperboard, paper bags, and shipping sacks.
- After realizing the benefits of paper packaging, many companies have now started launching their products in paper-based packaging that is recyclable. For instance, in March 2019, Nestle, in 5 different European markets, including Spain, announced the launch of a new Nesquik All Natural powder that features simplified natural ingredients that come in a recyclable paper pouch.
- Recycling of packaging materials has been quite troublesome, especially when it comes to plastic material. This can boost other materials, like paper, which are easy to recycle, leading to an increased usage of paper packaging in the region.
- For instance, in January 2018, Smurfit Kappa Group completed the construction of its new paper recycling plant in Malaga, Spain, with a processing capacity of 30,000 metric ton of recovered paper a year. This facility would allow the company to tap into the growing shift toward paper-based packaging solutions, driving the demand for corrugated packaging.
Food and Beverage Industry to Contribute Significantly for the Growth of Packaging Industry
- With special attention given to the quality, traceability, and safety of the food products processed, Spain enjoys a modern food processing sector focusing mainly on the domestic. This is expected to boost the market in the region over the forecast period.
- Due to the improved economic environment, and the increased disposable income in the hands of the people is one of the significant factor fueling the growth of the packaging industry throughout the forecast period. For instance, in 2017, the Spanish food retail sales USD 118.7 billion.
- Some of the prominent players in the packaging industry are expanding their footprint in the region which is expected to fuel the demand for the packaging materials across the industry.
- For instance, in September 2018, Crown Holdings, Inc. the leading provider of packaging products announced the building up of a new plant in Spain's Valencia region for the production of aluminum beverage cans.
The rivalry among the players in the packaging industry is high, owing to the presence of some key players, such as Nekicesa Packaging, Tecnocap Closures, Amcor, and many more. These companies, due to their ability to constantly innovate their products, have gained a competitive advantage over the other players in the industry. Heavy investment in R&D, along with strategic partnerships, mergers, and acquisitions, has allowed the companies to gain a strong foothold in the market.
- October 2018 - Ball Corporation opened a state-of-the-art production plant in Spain that produces aluminum specialty cans by using 15% less energy and 22% less water compared to an average plant.
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