September 2024
The global returnable packaging market size reached USD 116.02 billion in 2023 and is projected to hit around USD 208.56 billion by 2033, expanding at a CAGR of 6.04% during the forecast period from 2024 to 2033.
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Government initiatives towards environmental protection in the form of stringent regulations and a global shift towards eco-friendly packaging by prominent sectors are the major drivers of the returnable packaging market.
Packaging the goods is one of the major aspects of any developing and established firm, and thus, it creates a higher manufacturing rate for developing an innovative packaging solution. Returnable packaging is the method used by many end users to increase their brand reputation as well as to comply with stringent regulations set by the respective country's Ministry of Health and Environment for legitimate business tactics, which eventually aid in the proliferation of the business in the global market.
The returnable packaging market is estimated to grow with a substantial growth rate during the upcoming period due to increasing concerns such as global warming and excessive carbon emission by almost every industry as capitalism is at its peak in the recent era, being in the rat race has become essential to the major countries to survive in the ever-changing and volatile global market. Returnable packaging is also one of the innovative ways to reduce waste materials and protect the environment from excessive garbage issues worldwide. The global packaging market size is estimated to grow from USD 1.20 trillion in 2022 to reach an estimated USD 1.58 trillion by 2032, growing at a 3.16% CAGR between 2023 and 2032.
In the context of returnable packaging, Asia Pacific dominates the global market with the agenda of protecting the environment from hazardous waste materials and limiting them to buried under landfills. Returnable packaging may hold a high initial cost for the establishment of the whole chain. However, as technology evolves, this drawback can be overcome, eventually leading to the market's expansion on a wider scale.
Increasing rate of e-commerce activities
The major driver for the returnable packaging market is preceding activities in the e-commerce sector on a greater scale as penetration of the internet surpasses most corners of the world. Since convenience and efficiency play supreme roles in people’s lives, online shopping has become a trend and way closure to become a dominant force in the market, which affects every second sector including major regions around the globe.
The proliferation of e-commerce also impacted the packaging sector, in particular, the returnable packaging market. Returnable packaging is cost-effective and reduces the burden of establishing a separate base for packaging in the enterprise. Moreover, the sudden increase in the online shopping rate fuels the demand for durable, efficient, and visually aesthetic types of packaging that can be eco-friendly, too. Hence, packaging solutions have a profound effect on the e-commerce industry.
Hectic process for recollection
The major drawback a returnable packaging market is experiencing is the hectic process of recollection of the leftover packaging after delivering the goods to their destination. To recollect the packaging material, a robust transportation facility and a storage basement are needed before processing it. Transportation further adds the burden of cost on the market and makes it an inefficient way to handle returnable goods as it adds up to the overall expense.
Additionally, misplacement may be the concern, which again requires monitoring the area where returnable packaging can be stored. Tracking devices will be helpful in tackling this problem, but again, it adds up the cost, which may be hindering the SMEs whose economic budget is comparatively less. Such organizations would not opt for the adoption of tracking devices, and their mandates further create a concern of theft and misplacing or mishandling of goods. Despite these challenges, due to the growing demand for returnable packaging solutions, the market players will come up with innovative ways of adoption, which will aid the expansion of the global returnable packaging market on a broad scale.
RFID and tracking systems
A significant opportunity for the returnable packaging market is the integration of RFID tags and tracking systems on returnable packages. This method can lift up the market with lucrative opportunities in the future and holds the potential to expand the market further on a large scale. A technological revolution has ascended to every sector, including the market, where RFID tags will be helpful in tracking the details of the products, and a tracking system can deliver the exact location to the other end.
The returnable packaging market can leverage highly advanced technology like RFID and traceable sensors, which boost operational efficiency, streamline the shipping and receiving process of returnable packages, and supply chain system, which will eventually aid the expansion of the market on a global scale by creating several jobs to handle the technical aspect of the market. This system makes the collection and transportation of returnable goods much easier since RFID tags enhance traceability and make inventory management precise. Consumers can be assured by scanning the RFID tags if the product is real and recyclable or not.
The plastic segment dominated the returnable packaging market in 2023. The market is further segmented into metal and wood. The growth of the plastic resistance to withstand harsh environmental changes and wear and tear during transportation while absorbing a segment is attributed to its high resistibility to withstand the harsh environment changes and wear and tear during transportation while absorbing the greater amount of shock waves. Moreover, plastic made from materials such as HDPE and PE can be easily cleaned and can fight against corrosive elements. Hence, plastic packaging is particularly proliferating due to the food and beverage industry, pharma, and chemical industry, which is expected to fuel the global market. By recognizing the rising demand for plastic packaging, major key players are investing heavily in the R&D of returnable packaging solutions.
The metal segment is expected to grow at the highest CAGR in the returnable packaging market during the forecast period. The growth of this segment is attributed to several factors, including the ability of metal to resist the damage caused by pressure and mishandling the goods, as well as its high strength and durability, making it a more demandable packaging option in the market. Also, plastic with certain layers has been banned in many regions due to its non-biodegradable nature and its negative impact on the ecosystem, fuelling the need for the metal packaging segment in the market.
The returnable packaging is bifurcated into crates, IBCs, drums, barrels and others. The pallets segment dominated the market in 2023. This segment's growth is due to its high load-handling capacity and higher storage space, and the efficient delivery of goods. The palette can be manufactured in various sizes and shapes as required, which is the key factor prevailing in the growth of this segment in the market.
The IBC segment is expected to grow at the highest CAGR in the returnable packaging market during the forecast period. With the rising number of outlets in the food and beverage industry, the demand for the IBC segment is building momentum in the market. Developing economies like China, India, and Brazil also need IBCs for the pharmaceutical and chemical industries in these regions. This packaging is generally used for international trade with cost-effective solutions and sustainability; IBC demand globally witnessed a sudden jerk, fuelling the market rapidly.
The food & beverage segment dominated the returnable packaging market by 35% in 2023. Food and beverage have gained momentum due to the increasing disposable incomes in many regions, busy lifestyles in urban areas, and rising food and beverage outlets that need efficient packaging that helps to keep food fresh without compromising on quality and eco-friendliness. Therefore, returnable packaging provides greater options with innovative packaging such as IBCs, rigid intermediate bulk containers, flexible containers, etc. Among these, flexitanks are widely used due to their low cost, high efficiency, and large storage space.
The healthcare segment is expected to grow at the highest CAGR in the returnable packaging market during the forecast period. Growth of the healthcare segment is due to the increasing need for transportation of various medical equipment like oxymeters, stethoscopes, MRI, pacemakers, ventilators, etc., and medicines, which need to be handled delicately as they are highly sensitive to changes in the environment that may affect the potency of medications. Therefore, the healthcare segment is the major contributor to the market.
Asia Pacific dominated the returnable packaging market by 38% in 2023 including the availability of raw materials that are abundant in nature in the region, particularly in developing countries such as India, Japan, and China. Additionally, the food and beverage sector in Asia Pacific has witnessed a higher growth rate, which again presents an opportunity for the market to grow exponentially, as the region is the largest importer and exporter of various food and beverage products. Major Manufacturing companies are also based in these countries. Where China is the major contributor to market expansion.
Extended Producer Responsibility (EPR) Programs by Chinese government policies that hold manufacturers accountable for the entire lifecycle of their products, including the use of returnable packaging to reduce waste.
North America is expected to witness significant growth in the returnable packaging market during the forecast period. The growth of this region is attributed to the establishment of major sectors like pharmaceuticals, food and beverages, and automotive, specifically in major countries like Canada, Mexico, and the U.S. These sectors have a huge demand for packaging material for the transportation of essential goods, and the increasing trend towards sustainable and biodegradable, recyclable packaging is further fuelling the market in North America. Additionally, government in north America has set a strict rules and policies to restrict the waste material disposable without permission to protect forest, lands, watery areas from pollutants. Here, returnable packaging play important role to comply these regulations thus, fuelling the markets expansion in this region.
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September 2024
September 2024
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Asmita Singh is a renowned author and consultant in the packaging industry, known for her deep passion for knowledge discovery and commitment to delivering actionable insights. With extensive experience in implementing advanced research methodologies, Asmita generates high-quality data and meaningful results that drive innovation and efficiency in packaging solutions. Her expertise spans the globe, offering valuable consulting services to businesses aiming to enhance their packaging strategies. Asmitas work is characterized by a dedication to excellence and a keen understanding of the latest trends and technologies shaping the future of packaging.