Retail-Ready Packaging demand to rise by 40% up to 2016
Demand for retail-ready packaging (RRP) will increase by more than 40% over the next five years and provide new opportunities for suppliers, the market research group Pira International (Leatherhead, Surrey / UK, says in its new study “The Future of Retail-ready Packaging to 2016”. Pira expects consumption to rise to 27m t in 2016 from 19 t in 2010 and, perhaps unsurprisingly, sees most of the growth in the emerging countries of Latin America and Asia-Pacific. As might be expected, China leads the list, but India, Brazil and Mexico are also forecast to be front-runners in increasing consumption. The report covers 14 countries and end-use sectors.
Geographically, the research group believes China will increase its slice of the RRP pie from 15% in 2010 to 18% by 2016, due to population growth but also to advances in technology and display methods. Europe stood for 46% of consumption in 2010, but its share is predicted to decline. Pira also foresees changes in the make-up of the market. Up to now, it says, RRP has been used primarily in food merchandising, commanding nearly 78% of the total volume. In 2010, beverages additionally accounted for 16% and non-food products for less than 6%. By 2016, the pattern is forecast to shift slightly, with beverages widening their share to more than 18% and non-food to 7%.
The market research focuses extensively on developments in the retail sector that are influencing demand. While Pira points out that in developing countries retail-ready packaging is still in its infancy, it says most if not all of the major retailers are working with suppliers and distributors to put RRP systems in place.
Retail-ready packaging volumes will grow by more than two-fifths between now and 2016 as retailers look to the format to improve profits, according to new research
The study from Pira International predicts that demand for retail-ready packaging will hit 27m tonnes by 2016, up from 19m tonnes in 2010.
‘The Future of Retail-Ready Packaging to 2016′ claims that much of the growth in RRP will come from developing markets, especially in Asia-Pacific and Latin America, but says that opportunities still remain for expansion of the market in more mature markets.
Drivers of RRP consumption, the study said, will include developments in printing technologies and the use of white-top liners as well as broader trends such as population growth and the increasing strength of supermarket and hypermarket chains across the world.
However, Pira’s study, which covers the market for corrugated, solid board and plastic RRP across 14 countries, says that cost control was the key driver in retailers’ move to the format.
“Cost control is one of the prime movers in the development of RRP systems,” the study says.
“Retailers are under constant pressure to reduce cost and improve margins while still providing a pleasant shopping experience to consumers. RRPs enable retailers to achieve significant cost savings by reducing labour costs, improving productivity and reducing out-of-stock situations.
“A significant proportion of distribution costs are incurred in the final 50 metres of the journey from the distribution centre, between the store back door and the retail shelf. Streamlining this operation, for example by introducing one-touch display systems, can have a marked effect on profitability for the retailer.”
Pira’s study also predicts that while the RRP market grows, the proportion of non-food products being transported and displayed in RRP packs will also grow, from around 22% of the market now to around 25% by 2016.