Kraft Packaging Market Size, Share & COVID-19 Impact Analysis, By Product Type (Unbleached and Bleached), By Packaging Type (Boxes & Cartons, Bags & Sacks, Pouches, Wraps, and Others), By End-use Industry (Foods & Beverages, Pharmaceuticals, Personal Care & Cosmetics, Electrical & Electronics, E-Commerce, Industrial, and Others), and Regional Forecast, 2023-2030

The global kraft packaging market size was valued at USD 39.55 billion in 2022 and is projected to grow from USD 41.19 billion in 2023 to USD 57.08 billion by 2030, exhibiting a CAGR of 4.77% during the forecast period. North America dominated the kraft packaging market with a market share of 34.69% in 2022. Moreover, the kraft packaging market in the U.S. is projected to grow significantly, reaching an estimated value of USD 17.22 billion by 2032, driven by the increasing demand of kraft paper in food and beverage industry.

Kraft paper is made from the chemical conversion of wood into wood pulp. This paper is used in many industries and has commercial applications due to its strength, high-quality texture, durability, and flexibility. These characteristics make it suitable for packaging and will thus drive the market growth. Kraft paper is used for packaging, wrapping, and binding several products, such as food, pottery, and stationery, whereas sack kraft paper is used for products that need strong and durable packaging. Furthermore, the increasing applications of kraft paper in floor covering during construction and manufacturing to protect the floor from scratches is enhancing the growth of this market.

COVID-19 IMPACT

COVID-19 Had Moderate Effect on Global Market Due to Application of Kraft Paper in Various Industries

The COVID-19 pandemic severely impacted the global economy and people’s lives, and created several challenges for manufacturers. The outbreak raised concerns for people's safety as well as the environment. It led to an increased demand for kraft packaging products due to their sustainability and recyclability. Industries, such as personal care & cosmetics and electrical & electronics oberved negative demand for their products, while the food & beverage and pharmaceutical industries witnessed moderate and positive growth, respectively. The shutdown of manufacturing units led to a downfall in the revenue of the industrial sector. However, the pandemic positively impacted the growth of the e-commerce sector, which increased the demand for kraft packaging products.

LATEST TRENDS

Launch of Temperature-Controlled Packaging to Transport Temperature-Sensitive Goods to Emerge as New Market Trend

The continuous innovations in and launch of new packaging products have led to a rise in the trend of integration of novel technologies in packaging. Furthermore, the rise in e-commerce has increased the number of online grocery buyers due to its better product offerings. Temperature-controlled packaging has made it easier to transport products, such as vegetables, beverages, dairy products, seafood, and medical products by providing optimum temperature to keep them fresh.

The growing use of temperature-controlled packaging, such as boxes in the food industry to store and transport perishable goods has increased the production of kraft paper-based boxes. For instance, Swiftpak, a packaging company, provides a wide range of temperature-controlled boxes that are primarily made up of kraft paper. These boxes are recyclable and incorporated with an insulated box liner that provides food products with thermal and shock protection. The adoption of such technologies by several manufacturers across the world is driving the demand for kraft packaging solutions.

DRIVING FACTORS

Rapid Growth of E-Commerce Sector to Drive Market Growth

E-commerce has redefined commercial activities across the world. The convenience offered by online platforms with reduced cost and time, coupled with the penetration of smartphones across the world, is accelerating the growth of the e-commerce industry.

The expansion of the e-commerce industry is increasing the use of bags, boxes, and pouches to deliver products as they can be recycled easily. It also helps in reducing the packaging waste generated by e-commerce activities as shipping products needs extra packaging to prevent them from getting damaged. Kraft paper is easy to print, which makes the packaging attractive and gives the product a premium look, thus attracting a number of sellers.

According to the National Investment Promotion & Facilitation Agency of India, e-commerce is the fastest-growing market in the world, and the Indian e-commerce sector is expected to reach a value of USD 350 billion by 2030. India is expected to have around 907 million internet users by the end of 2023, which accounts for almost 64% of the country’s total population. The increasing number of internet users and their inclination toward online shopping is boosting the growth of the market.

Easy Recyclability and Reusability of Kraft Products are Enhancing Market Growth

Kraft paper has several uses in various industries due to its durability and tear resistance, from wrapping a food product to giving gifts a premium look to electrical insulation. The surging use of this paper in several industries is enhancing the growth of the market. The increasing awareness among people regarding the use of sustainable materials to curb the adoption of plastic and lessen the environmental impact is boosting the demand for kraft paper as it is easily recyclable and reusable. This type of paper is produced from pulp and made up of virgin fibers, making it organic and biodegradable, thus easing its recyclability. According to the American Forest & Paper Association, the recycling rate of paper in the U.S. surged to 68% in 2021, and a USD 7 billion investment in manufacturing will result in the use of almost 9 million tons of recycled fiber.

Kraft paper has a high recycling rate, and manufacturers are trying to increase this rate yearly and incorporate recycled paper while manufacturing new products. Paper bags can be recycled up to 6 times until they are converted into compost or bioenergy. Thus, the reusability of kraft paper is one of the primary factors for market’s growth.

RESTRAINING FACTORS

Price Volatility of Kraft Paper to Hamper Market Development

Kraft packaging has wide usage in various industries due to its strength, durability, and eco-friendliness. The demand for this paper and its packaging has surged in the last decade due to increasing awareness among people regarding its low impact on the environment. However, the prices of the raw materials for kraft paper are rising, thereby increasing the manufacturing cost. Due to high cost, customers are opting for its alternatives, and thus, the price volatility in the paper industry is restricting the sales of kraft packaging products.

According to the International Monetary Fund (IMF), a decrease in the kraftliner exports has increased the product’s price. Moreover, Svenska Cellulosa Aktiebolaget (SCA) announced a hike in the price of krafliners in Europe by USD 107.7 (EUR 100) per tonne in April 2022 due to demand and supply imbalance. Thus, several nations are seeing a rise in the price of kraft paper, impeding the growth of this market.

SEGMENTATION

By Product Type Analysis

High Sustainability and Recyclability of Unbleached Paper to Boost Its Sales

Based on product type, the market is segmented into unbleached and bleached. The unbleached segment is dominating the market by holding the largest share. This type of paper is made up of more than 80% virgin wood pulp and does not produce any chemical gases during manufacturing. Furthermore, it is more sustainable and easier to recycle than bleached kraft paper. The increasing use of unbleached kraft paper for making industrial bags, grocery bags, boxes, and wrapping paper is accelerating the growth of this segment.

By Packaging Type Analysis

Kraft Paper Boxes to be Widely Used Due to Their Benefits and Widespread Applications

Based on packaging type, the market is segmented into boxes & cartons, bags & sacks, pouches, wraps, and others. The boxes & cartons segment is dominating the kraft packaging market share. Kraft paper boxes are more rigid, durable, and eco-friendly than other paper boxes. The easy printability and customizability of these boxes and cartons are attracting manufacturers and customers, thus enhancing the growth of this segment. Furthermore, use of different types of boxes, such as sliding drawer types, counter display types, jewelry, bakery packaging, shoes, clothes & gift packaging, food take away types, and cylinder kraft tube boxes, among others, is driving the growth of the segment.

By End-use Industry Analysis

Rising Online Food Outlets to Boost Product Use in Food & Beverage Industry

Based on end-use industry, the market is segmented into foods & beverages, pharmaceuticals, personal care & cosmetics, electrical & electronics, e-commerce, industrial, and others. The food & beverage segment holds the largest share of the global market. The increasing population across the world has fueled food consumption. Moreover, the growing e-commerce sector has increased the number of online food outlets, which has surged the demand for kraft packaging as it is made up of organic materials, which are the most suitable for food packaging. The increasing demand for dairy products and health drinks is also accelerating the demand for kraft packaging products.

REGIONAL INSIGHTS

The market is analyzed across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

North America is the dominating region in the global market. The growing food & beverage industry and a well-established pharmaceuticals market in a large economy, such as the U.S. are contributing to the growth of the regional market.

Europe is the second-largest region in the global market. The rising awareness of using sustainable products, coupled with the ban on plastic in several nations and lesser environmental impact of kraft paper, is fueling the sales of kraft packaging products in the region.

Asia Pacific is the fastest growing region due to the ever-expanding electrical & electronic industry in emerging economies, such as India, China, and Japan. Latin America is also experiencing significant growth in the sales of kraft packaging products due to the growing disposable income and investments of various companies in this region. For instance, in September 2021, WestRock built its largest corrugated factory in Brazil and its biggest plant dedicated to the production of kraftliner in Latin America.

The Middle East & Africa is growing at a moderate rate due to the expanding e-commerce industry. Moreover, the establishment of a new kraft paper mill is further intensifying the market’s growth in this region.

KEY INDUSTRY PLAYERS

Key Market Participants to Witness Significant Growth Opportunities Due to Innovations in Packaging

The global market is highly fragmented and competitive. In terms of market dynamics and share, a few major companies are dominating the market by offering innovative kraft packaging solutions. These key players in the market are constantly focusing on expanding their customer base across regions through innovation.

The leading organizations operating in the market include International Paper Company, WestRock, Stora Enso Oyj, Smurfit Kappa, Mondi, and many others. Numerous other players operating in the industry are focused on delivering advanced packaging solutions.

List of Key Companies Profiled:

• International Paper Company (U.S.)


• WestRock (U.S.)


• Stora Enso Oyj (Finland)


• Smurfit Kappa (Ireland)


• Mondi (U.K.)


• Nippon Paper Group (Japan)


• SCG PACKAGING (Thailand)


• Packaging Corporation of America (U.S.)


• Mayr-Melnhof Karton AG (Austria)


• Huhtamaki (Finland)

KEY INDUSTRY DEVELOPMENTS:

• May 2023 - Mondi launched PelletBags, a new paper packaging solution for wooden pellets. The bag is made up of 2-ply kraft paper that is produced in-house. It is recyclable and made from recyclable materials.


• May 2023 - Billerud launched wrapping solutions for households, such as kitchens and toilets. The wrapping rolls are made of biodegradable, recyclable, and renewable kraft paper, a good alternative to plastic.


• March 2023 - Mondi collaborated with ATS-Tanner to launch a new kraft band. The band is made up of kraft paper and used in e-commerce, fruits & vegetables, and drinks. The product will help reduce the use of plastic in single and bundle packages.


• February 2023 - ProAmpac launched ProActive Recyclable Paper-1000, a paper-based packaging product designed for frozen foods, such as vegetables and ready-to-eat meals. The new packaging is available in three-sided seal pouch and roll stock formats comprising natural kraft and bleached paper.


• June 2022 - Stora Enso commercially launched its Kraftliner, which is 100% virgin fiber-based and named as AvantForte WhiteTop. Kraftliner serves the premium packaging segments that need good visual appearance and strength, such as e-commerce products, fresh food, and shelf-ready packaging.

REPORT COVERAGE

The research report provides a detailed analysis of the market and focuses on key aspects, such as leading companies, competitive landscape, product/service types, porters five forces analysis, and leading end-use industries of the product. Besides, it offers insights into the latest market kraft packaging trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the market's growth in recent years.

Report Scope and Segmentation