Its report, ‘The Future of Business Models and Services for Packaging to 2022’, quantifies the market for packaging services comprising packaging design, materials testing, contract packing, predictive maintenance, and consumer research.
It claims the total market for these packaging services in 2017 is estimated at $33.7bn and by 2022 will be worth $50bn, increasing at a compound annual growth rate of 9.5%.
Opportunities include embedding design services alongside more conventional packaging supply and converting.
The market for graphical packaging design is worth more than $6.5bn today, and is expected to be close to $8bn in 2022.
Contract packing, while not a new concept, is growing as interest in using a packaging line that is not owned directly is increasing.
Meanwhile some firms have pressed ahead with significant consumer research services, setting up ambitious supermarket environments – real or virtual – for testing the best packaging.
“The business landscape is changing, and new opportunities are evolving, as the positions are not taken or set,” said Dan Rogers, head of publishing, Smithers Pira.
“E-commerce is growing fast, and changes the way consumers shop. The first ‘moment of truth’ has moved out from the supermarket, and packaging must be adjusted accordingly.
“Digital printing is changing how firms communicate with consumers, and is a means to personalizing products. Meanwhile, smart and intelligent packaging opens a range of possibilities too.”
Shifting business models
As major packaging firms expand into services, business models are shifting too.
Across the value chain, services are offered that stretch the definition of a specific place in the chain.
Vertical development of the business model is normal where services that traditionally belong in another step are integrated in the offering.
A typical example of a vertical business model is the packaging converter that also offers design services.
According to Smithers Pira, the market for materials testing will be shaped by new materials; biomaterials, and new technology.
Material testing is an important step when selecting new materials for packaging. With the test results customers can compare materials and select the most suitable application.
Rogers said the packaging industry may be traditional and still circle around the same materials – glass, paper and fibreboard, plastics, wood, and metal – but at the same time innovative business models are providing the catalyst to explore new materials, markets, and high-value market applications.
The report identifies contract packing as the largest segment, with 70% of the value. The priorities for packaging services vary along the value chain, and the positions are not fixed.
Packaging converters often have the skills and equipment in house, or hire the skills needed for setting up a design studio when offering design services, which can add value for customers.
It claims evolution is being driven by; E-commerce, which is growing very fast and changes the way consumers shop. It adds convenience, an unlimited product range to choose from and a transparency that people appreciate. It also changes how brand owners interact with consumers.
Industry 4.0 and analysing Big Data – such as sensor data for temperature, vibration, rotation speed – means packaging companies will be able to improve and rationalise; implementing predictive, rather than reactive, maintenance and service.
Smithers Pira ‘The Future of Business Models in Packaging to 2022’ is available to buy for £4,500. Smithers Pira is currently offering 10% off all market reports until January 31, 2018.