Will global personal care packaging demand be hit by faltering emerging markets?
The global market for packaging is currently estimated to be worth $20.5 billion, but is expected to grow at an annual CAGR of 4% to reach a value of $27.0 billion in the period from 2015 to 2020, according to the latest report from Zion Research.
This compares to most market researchers estimates predicting that the overall global market for personal care products will grow by less than 3% in the next few years.
But although the forecast looks good, a continued slowed down in two of the biggest emerging markets - China and Brazil - has some economist concerned that it could lead to a prolonged economic cooling with repercussions for global economy.
Emerging markets should thrive if global economy remains level
Titled “Personal Care Packaging Market for Skin Care, Hair Care, Bath & Shower, Cosmetics and Other Applications: Global Industry Perspective, Comprehensive Analysis, and Forecast, 2014 – 2020” highlights how emerging economies such as Brazil, South Africa, China and India are expected to be the driving force behind the growth.
In these developing markets, the growing disposable income of many families is leading to a greater interest in increasingly sophisticated skin care and hair care routines – with simple soap and toothpaste regimens being transformed into more time in the bathroom, using many more products.
However, it is the Asia Pacific market that will continue to dominate, the report highlights, with the report highlighting the fact that this region accounts for around 40% of the global market.
Will China continue to be the back bone for growth?
In China the growing sophistication of skin care routines, coupled with huge growth in demand for men’s personal care products has continued to drive growth in recent years, but a recent cooling of the economy does have some industry experts concerned as it could have global implications if it is prolonged and there are a growing number of indicators that this could be true.
Europe is the next biggest market after Asia, followed by North America, but growth of the personal care industry has been limited in recent years on account of the maturity of those markets and limited economic growth.
Latin America is the fourth biggest market for personal care packaging, and although it has delivered significant growth in recent years, the slow-down in the region’s biggest economy, Brazil, could have far reaching effects.
Most opportunities in hair care packaging
When it comes to product categories, the report points out that it is the skin care market that dominates worldwide, accounting for 35% of the market total, however it is the hair care market that is expected to demonstrate the fastest growth during the forecast period as hair gels, coloring products and shampoos become more popular, particularly in developing markets.
The report focuses on primary packaging materials such as flexible packaging, rigid plastics, paper, glass and metal, while highlighting how an increasingly important element is the sourcing of recyclable materials or those from renewable sources.