The Brazilian packaging market is the fifth-largest in the world, having realized US$35 billion (1.5% of GDP) in sales in 2014, with Brazil being the seventh largest economy in the world by nominal GDP. The packaging market includes manufacturing of packaging materials from raw materials, distribution of packaging materials to producers, packaging design as well as recycling processes. The packaging sector has strong ties to environmental organizations and tries to adapt to the demands of environmentally friendly production with more sustainable packaging.
Market development For the period between 2011 and 2016, Brazil shows an estimated median growth of 6.2%, realizing a sales value of US$34 billion in 2016, leaving behind Canada and being on a level with France. The constant growth of the Brazilian packaging market is not a unique phenomenon. The global packaging market is on the rise, which is due to a combination of various factors like the growing urbanization, investments in the construction sector and the expansion of the health sector. The demand for environmentally friendly packaging types has also been increasing steadily since the 2000s and the resulting growth from innovation contributes to this trend. Additionally, the rapid growth of the so-called BRIC states over the early 2000s as well as just after the 2008 financial crisis plays a major role in the growth trend of the global packaging market. Despite the 2015 economic slowdowns - especially in China and Brazil - the highest growth rates for the 2011-2016 period can be observed in these states, with China, India, Brazil and Russia showing growth rates of 7.9%, 7.7%, 6.2% and 4.9%, respectively. The high growth rates in these countries can be explained by rising personal incomes, resulting in higher demand for a broad product range, which in turn creates growth for the packaging producers of these respective products. Despite its good CAGR, it was projected that due to the Brazilian recession the 2014 sales equaling US$35 billion would have decreased by 2.9% in 2016, to reach US$34 billion. +Packaging sales per country per year (Source: Brasil PackTrends 2020 (2012))CountriesSales 2008 (billion US$)Ranking 2008Sales 2011 (billion US$)Ranking 2011Sales 2016 (billion US$)Ranking 2016US129114111641China5028021172Japan703763873Germany334374424France275306345Canada247277307 Brazil266325 34 5UK208228259Russia179219268India91017102510Others158X199X262XTOTAL559X675X845X
Compared to 2005, in 2013 Brazil shows a total growth of 42% with regard to exports of packaging. Especially aluminum and steel exhibit a very high overall increase in that nine-year period. In 2013 packaging made of plastics and steel were the most exported types with sales of US$268 million and US$183 million, respectively, while both combined accounted for 70% of total exports. The only packaging that was exported less in 2013 than in 2005 is wood, showing a 32% decrease from US$21 million to US$15 million. In total, US$645 million worth of packaging were exported in 2013. +Exports of packaging per packaging material per year in million US$ (Source: DATAMARK)Packaging20052008201120122013% change 2005–13 Plastics195.1282.6269.3256.9267.5+37.1%Wood21.033.320.218.814.3−31.9%Paper and cardboard90.2118.1119.5126.4123.0+36.3%Glass13.146.228.8 18.816.9+29.0%Steel127.6251.8221.7212.3183.4+43.7%Aluminum5.524.917.831.640.2+631.0%TOTAL452.5756.9677.3664.8645.3+42.6% Generally, all packaging imports have increased between 2005 and 2013. The most imported items are glass and steel packaging, exhibiting an overall increase of 560% and 384%, respectively. The imports of wood, which have increased by 30%, are the only material that shows an increase of less than 200%. All in all, Brazil imported US$1.2 billion worth of packaging in 2013. +Imports of packaging per packaging material per year in million US$ (Source: DATAMARK)Packaging20052008201120122013% change 2005–13Plastics200.5383.3579.6602.8642.4 +220.4%Wood2.02.93.22.52.6 +30%Paper and cardboard59.2141.5245.0236.0252.4 +326.4%Glass20.131.0112.8131.8132.7 +560.2%Steel36.289.0141.1159.3175.5 +384.48%Aluminum8.727.949.831.338.7 +344.8%TOTAL326.7675.61131.51163.71244.3 +280.9%
Raw materials Raw materials that are used in order to fabricate packaging vary a lot. Yet, the most common materials are corrugated board and plastics, which represent more than 50% market share in volume and more than 40% market share in value when added up. Despite representing 15% in volume, glass only contributes 4% to the total production value. On the other side, flexibles are a material that is extremely valuable, representing 22% of total value while only embodying 3% of the production size. +Raw material market shares 2014 (Source: DATAMARK)Raw materialVolumeValueCorrugated board31,6%12,7%Plastics22,6%29,5%Glass15,1%4,3%Metals13,3%18,4%Duplex/Triplex6,0%4,0%Paper4,5%4,2%Flexibles3,3%22,4%LPB3,6%4,5% In 2014, two thirds of Brazilian raw material consumption took place in the alimentary sector and one third in the non-alimentary sector. Steel, Kraft and duplex/triplex are the only materials that are used to a larger degree for non-food packaging than vice versa. Lightweight materials like flexibles and aluminum are especially popular packaging materials for food products. 90% of glass packaging is designed for the food products, more precisely, for beer and other beverages. Flexibles and aluminum are the most valuable materials, having the highest value/volume ratios among the materials of the list. Moreover, the total value/volume ratio is higher for food than for non-food packaging, which indicates an overall higher turnover of non-food packaging. +Material consumption 2014 (Source: DATAMARK)FoodNon-FoodCategoryMaterialVolume (1000t)%Value (million US$)Volume (1000t)%Value (million US$)Flexibles653,788,6%7.714,8483,911,4%1.661,1MetalsAluminum444,693,2%3.693,732,36,8%268,5Tinplate422,064,3%1.182,2233,935,7%655,2Steel8,72,9%17,8289,297,1%593,2PaperKraft211,743,3%618,4277,656,7%849,4Duplex/Triplex219,833,8%474,4430,566,2%929,2Cardboard boxes2.179,564,0%2.840,01.225,236,0%1.596,5Plastics1.946,072,6%7.687,5734,627,4%2.850,6Glass1.239,989,7%1.150,6142,410,3%132,2TOTAL7.325,968,0%25.379,53.449,5832,0%9.536,0
The largest end use market for packaging raw materials is the beverage industry. While plastics and flexibles represent the largest share of used material for non-alcoholic beverages, alcoholic beverages heavily rely on metals (foremost aluminum) and glass. Meat and vegetables also heavily favor packaging made of plastics or flexibles. The chemical and agricultural sectors predominantly use plastics and metals due to their products requiring packaging with high durability. Low production costs are another important factor in explaining the popularity of plastics and flexibles in the Brazilian packaging sector. +End use market by value 2014 (million US$) (Source: DATAMARK)CategoryProductFlexiblesMetalsPaperPlasticsGlassTOTALFoodMeat and vegetables1.2846254012.2281364.675Cereals and flour based1.60837248620 -2.513Sugar and chocolate64077296307181.339Dairy and fats1.29026153965772.647DrinksAlcoholic beverages512.986341469804.196Non-alcoholic beverages3.0031.024623.1942247.507Non-FoodElectrical and automotive1268569 -182Health and beauty8832703047551312.343Personal and leisure65 -32620 -411Cleaning and household221128226844 -1.418Chemicals and agriculture4801.0932001.16212.947TOTAL9.5376.5272.23510.3111.56830.177
Packaging trends An analysis of the Brazilian packaging market unveils a set of products, the popularity of which has steadily been increasing since the late 2000s. Additionally to that, there are some general tendencies that are steering the market.
General trends
In its study "Brasil PackTrends 2020" (2012), the Brazilian Institute for Food Technology (ITAL) identified five general trends in the packaging industry: 1) convenience and simplicity, 2) esthetics and identity, 3) quality and new technologies, 4) sustainability and ethics, and 5) safety and regulatory issues. Despite delivering examples from the Brazilian market, these five tendencies are not taylor-made for Brazil, as they - to large parts - also apply to the packaging industry as a whole.
Convenience and simplicity Consumers nowadays value products that facilitate their lives, that are easy to use and time-efficient. In terms of packaging, this means that a successful packaging has to be easy to open, easy to use, resealable and easily disposable. With regard to food, the popularity of packaging that enables a quick and simple preparation (e.g. in the microwave) also keeps rising. Packaging has to refrain from posing any unnecessary obstacle whatsoever, this also includes language design, that is, packaging ought to use an easy languages and simple graphics while not overloading the consumer with information. Additionally to that, packaging has to adapt to socio-economic changes. As urbanization is increasing and single-person household become more and more common, producers have to provide food packaging with individual portions or packaging that, for instance, allows a quick and easy preparation of meals in the microwave.
Aesthetics and identity When heading for a product, consumers (in)directly seek objective as well as subjective satisfaction. Adequate packaging can increase the consumer's feeling of identification with a product by, e.g., promoting a certain life-style or by conveying high quality, enhancing the product's ability of serving as a status symbol. Another important consumer type is the one that values health and a high quality of life above everything else. The proportion of packaging that promotes health benefits of the product and that conveys to the customer a certain feeling of doing something good for their health is steadily increasing. Another trend involves packaging that turns products into collectibles and make the packaging more valuable to the customer than the actual product itself. A good example of this trend is the Share a Coke marketing campaign by Coca-Cola, that was launched in Brazil in 2015, four years after the first campaign was launched in Australia. Colors transmit esthetics, yet post 2010 developments in the Brazilian packaging market show a rising preference of simple styles by customers.
Quality and new technologies The packaging sector provides opportunities for new technologies as well as new types of materials that improve a product's lifespan and microbiological safety. Active and intelligent packaging can, for instance, absorb oxygen and , or even heat itself. Others provide the consumer with indicators on temperature, freshness or the degree of ripeness. Advancements have also been made on the nano level. Packaging that avails itself of nanotechnology can create barriers to gases, humidity or UV radiation. New technology also helps at making the product weigh less. Increasingly, biopolymers are used as the material basis for packaging, replacing fossil-based polymers. Yet, new packaging types tend to face issues like a higher price and hence, difficulties in competition with the cheaper fossil-based materials.
Sustainability and ethics