Its report, ‘The Future of Sack and Kraft Paper to 2021’, claims steady growth in consumer markets will buoy the industry to produce growth of around 3% per annum for 2016–2021.
John Nelson, commissioning editor, Smither’s Pira, told ConfectioneryNews, significant raw material price increases, especially in cocoa, are hampering the confectionery market, as is a general trend to a more health-conscious diet, which is taking some of the shine off otherwise good growth in paper-based packaging consumption.
He added the report shows how confectionery packaging is a niche market. With 98,000 tonnes of material consumed in 2016, it is less than 1% of the global sack and kraft market.
“It will grow sluggishly at 2.3% per annum across 2016-2021, as compared to a 3.2% market mean,” said Nelson.
“Growth will be faster in the related – and at 3.45 million tonnes much larger – end-use segment of sugar match the industry average across the five years.”
He added, increasing end-user demand for improved graphics and aesthetic appeal has an impact on all packaging sectors, especially in FMCG markets, and even in industrial applications like building materials as more consumers are drawn to DIY markets.
“The greatest benefit in this drive for aesthetic shelf appeal is to bleached papers, as these provide the ideal printing surface for high quality graphics,” said Nelson.
“However, the growing consumer trend for ‘natural’ look packaging lends itself to unbleached papers.”
As an example, Nelson pointed to Dorians kraft paper bag packaging for baked crackers.
“Demand for kraft paper packaging for baked goods is generally holding up well, especially in developed markets, where there is a trend in favor of independent artisanal bakery outlets,” he said.
“Barrier properties are a fast-growing requirement for many end users, particularly in food sectors that need oil, grease and moisture resistance. As a result, barrier technology is a dynamic area of the flexible paper packaging industry, with continuous development taking place.”
He added, within this, better performing PFOA-free products are arriving, such as Zanders’ Zanbarrier OGR, which is suited to applications such as fast food packaging, as release paper for fatty and moist food products, and as lamination on pizza and bakery boxes.
The report also shows a key development in the market has been the introduction of ultrasonic sealing technologies, which enable faster and smoother filling processes and can offer converters marked reductions in costs.
This gives savings from spillage and dust collecting systems, reduced wear and tear due to cleaner operation, reduced energy costs and improved health and safety conditions for employees are additional benefits of this system.
Nelson said BillerudKorsnäs, together with Bosch Packaging Technology, launched a product last year to replace conventional packaging for dry foods with the first dust-tight, sealed, all-paper packaging produced on vertical form, fill and seal (VFFS) lines.
This development is the result of a combination of BillerudKorsnäs’ Axello ZAP paper and the Bosch PME ZAP.
“Paper manufacturers are developing suitable paper grades that can hold high-quality graphics, specifically because sack and kraft paper packs are under constant threat from alternative materials,” added Nelson.
“Generally there is a demand for more multi-substrate formats and coatings, to replace paper only sacks due their superior barrier performance and also resistance to issues like mineral oil component migration – especially in dry foods.
“Heavier duty plastics, woven polypropylene, cotton and other fabrics have firmly entrenched themselves in the retail bag sector, particularly in the grocery market where paper had hoped to gain a foothold, but upmarket retail bags still tend to favour paper, both bleached and unbleached.”
He said, like other sectors of the paper packaging industry, manufacturers of kraft and sack paper have had to address the growing demand for products carrying an eco-label, such as paper certified as originating from sustainably managed forests.
Most companies – especially those in the more developed parts of the world, such as North America and Europe – operate sustainability programs, which address environmental concerns, set out targets and goals, and are typically reviewed on a yearly basis.
Nelson said kraft and sack paper producers have had to become far more responsible in terms of how their raw materials are sourced, with three principal programs in operation worldwide: the Sustainable Forestry Initiative (SFI); the Forest Stewardship Council (FSC) and the Program for the Endorsement of Forest Certification (PEFC).
There are also a number of certification bodies with a more country-specific focus, such as Certificacão Florestal (CERFLOR) in Brazil and Japan’s Sustainable Green Ecosystem Council (SEGC).
“Kraft and sack paper carrying sustainability certification is expected to become more widespread throughout the global industry, with penetration of eco-labels increasing in parts of the world where their presence has been limited to date,” added Nelson.
“There will be a corresponding push to market these as sustainable products and more comparative lifecycles analyses that emphasize sack and kraft formats’ benefits relative to plastic packaging.
“For example, a study in December 2016 from the IVL Swedish Environmental Institute confirmed the environmental credentials of paper carrier bags, noting their carbon footprint as half that of alternative bags made from recycled plastic.”