Paper Bags Packaging Market Size, Share & Industry Analysis, By Material (Brown Kraft and White Kraft), By Type (Sewn Open Mouth, Pinch Bottom Open Mouth, Pasted Valve, Self-Opening Sacks, and Others), By End Use (Food & Beverages, E-commerce, Chemicals, Agriculture, Retail, and Others), and Regional Forecast, 2024-2032

The global paper bag packaging market size was valued at USD 6.91 billion in 2023. It is projected to grow from USD 7.26 billion in 2024 to USD 11.30 billion by 2032, exhibiting a CAGR of 5.69% during the forecast period.

A paper bag is an essential packaging solution made from recycled paper. The rising adoption of biodegradable flat-bottom paper bags packaging across various end-use industries drives market growth.  

Smurfit Kappa and International Paper Company are leading manufacturers, accounting for the largest paper bag packaging market growth.

MARKET DYNAMICS

MARKET DRIVERS

Rapidly Augmenting E-commerce Sales Boosts Market Growth

The rising e-commerce sales worldwide are an important factor driving the growth of the global paper bags packaging market. The growth of e-commerce in recent years has positively impacted the demand for the product. In addition, with the growing number of companies selling goods online, coupled with the large number of online buyers, these bags are majorly used for brand promotion and attracting consumers with innovative printing.

• According to the United Nations Conference on Trade and Development, global e-commerce sales reached USD 26.7 trillion in 2019, a 4% increase from 2018. The industry is boosting paper packaging usage, as it offers a common and inexpensive packaging solutions.

With various graphics and printing alternatives such as litho, digital, and screen printing, it becomes an effective form for marketing, branding, and promoting a company. Moreover, the surge in demand for e-commerce products due to changes in consumer shopping habits in the post-pandemic era further drives the global paper bags packaging market growth.

Increasing Government Initiatives and Incentives Drives Market Expansion

Rising government initiatives and incentives focused on promoting sustainable practices and reducing environmental impact are playing a major role in driving consumer behavior. The trend has shifted consumer focus toward the adoption of eco-friendly packaging solutions. Governments in several countries are focusing the importance of transitioning to sustainable packaging to address environmental concerns.

• The Indian government introduced initiatives including the National Mission for Clean Ganga (NMCG), which encourages the use of eco-friendly paper bags packaging. The initiative boosts the use of paper bags developed from agricultural waste such as rice straw and wheat straw for milk packaging.

Governments also provide tax benefits, subsidies, and grants to businesses pursuing sustainability agendas, helping them implement eco-friendly packaging solutions. These financial incentives further boost the adoption of paper bags packaging, thereby driving market growth. Additionally, regulations and standards on single-use plastics and the promotion of recyclable and biodegradable materials contribute to the global paper bags packaging market share.

MARKET RESTRAINTS

Stringent Government Regulations on the Use of Natural Resources Impedes Market Development

The government regulations imposed on the exploitation of natural resources are the primary factors hampering market growth. Environmental degradation resulting from the depletion of natural resources negatively affects economic development in the affected areas. This depletion leads to soil erosion, deforestation, species extinction, water gasification, ozone depletion, greenhouse gas increase, and other environmental disasters. The International Federation for Human Rights has highlighted cases where investment projects linked with the exploitation of natural resources lacked proper consultation. Currently, various statutes protect the natural resources found on federal land.

• For instance, 18 U.S.C. § 1851 forbids illegal mining or elimination of coal from lands maintained or reserved for the U.S. government. The timber found on federal land is also sheltered by 18 U.S.C. § 1852-56, which prohibits illegal injuring, cutting, removing, or moving of timber from public lands.

Therefore, such regulations imposed by government bodies on the exploitation of natural resources can hamper market growth.

MARKET OPPORTUNITIES

Trend Of Online Shopping Continues Will Bring New Opportunities to the Market

The trend of online shopping continues to grow swiftly, driven by the increasing use of smartphones and tech-savvy customers. It presents an opportunity for brand owners to introduce various types of packaging: one for traditional in-store presentation with high-quality graphics and another tailored for online sales.

Incorporating technologies into packaging can provide details about the product's ingredients, manufacturing process, and shelf life, providing lucrative growth opportunities. Moreover, technology enables product tracking during logistics and gives complete details about the product using bar codes or QR codes on the packaging. These features increase convenience for both producers and end consumers.

MARKET CHALLENGES

Fluctuating Raw Material Prices and Demand Variability Challenge Market Expansion

A consistent supply of raw materials such as recycled paper, wood pulp, and chemicals is essential for production. Disruptions in the supply chain can lead to production delays and higher costs. Fluctuating raw material and production costs, coupled with the rising demand for personalized packaging, create challenges for businesses. Rising costs of energy, raw materials, and transportation affect profit margins. In addition, evolving consumer trends influence the packaging industry. Companies must find a balance between overstocking and understocking to meet consumer needs while avoiding excessive inventory costs.

MARKET TRENDS

Surge in Sustainable Packaging Demand Emerges as a Key Trend

Growing consumer awareness regarding the environmental impact of plastic bags boosted the demand for sustainable alternatives such as paper bags, emerging as a key trend for market expansion. Paper bags packaging are cost-effective and easy to decompose, helping to maintain environment balance by releasing less toxic gases and decomposing faster. Moreover, these bags are considered more environmentally friendly as they are recyclable and reusable. Several manufacturers prefer paper bag packaging due to its cost-effective nature. The surge in demand for sustainable packaging solutions such as food, retail, pharmaceutical, and other critical sectors is further boosting the usage of paper bags, making it a growing paper bags packaging market trend.

IMPACT OF COVID-19

The sudden emergence of the COVID-19 pandemic impacted major industries globally. The shutdown of manufacturing plants initially hindered market growth. Nonetheless, the growing demand for sustainable packaging solutions from sectors such as food, pharmaceuticals, and agriculture sectors contributed to the market’s recovery and expansion.

SEGMENTATION ANALYSIS

By Material

Environmentally-friendly Benefits Allows the Dominance of the Brown Kraft Segment 

Based on material, the market is segmented into brown kraft and white kraft.

Brown kraft is the dominating material segment and is projected to experience noteworthy growth during the forecast period. The eco-friendliness of brown kraft makes it an ideal choice for manufacturing paper bags packaging. The brown kraft bags are more sustainable and easier to recycle. Moreover, they are stronger than bleached white kraft due to their natural state, thus making the fibers stronger and creating a rougher, less porous print surface.

White kraft paper is the second-dominating material segment. The material’s white surface makes it ideal for high-quality printing & finishing, thus boosting the segment’s growth.

By Type

Sewn Open Mouth Segment Dominates owing to its Properties

Based on type, the market is segmented into sewn open mouth, pinch bottom open mouth, pasted valve, self-opening sacks, and others.

The sewn open mouth segment is the dominating paper bag type and is expected to witness exponential growth in the projected years. These bags are strong, stable, and resistant to transit damage, which enhances its shelf life. In addition, they are less expensive, leak-proof, and resistant to infestation, contributing to the segment’s growth.

Self-opening sacks are the second-dominating type segment. These sacks are versatile, eco-friendly, easily printable, and offer excellent grease and moisture control. They are also essential in maintaining freshness, further driving the growth of the segment.

By End Use

Food & Beverages Segment Dominates Owing to Increasing Utilization of Paper Bags

Based on end use, the market is segmented into food & beverages, e-commerce, chemicals, agriculture, retail, and others.

Food & beverages are the leading end-use segment and are expected to witness remarkable growth in the forecast period. These bags are a good choice for food packaging due to their breathability, recyclability, and eco-friendliness. They allow air circulation, preventing moisture buildup that can cause food spoilage, making them ideal for packaging vegetables, fruits, and bakery items. In addition, consumers can reuse these bags to store food or other items, further propelling demand in the food and beverage industry.

Retail is the second-dominating end-use segment. The bags are primarily made from natural kraft paper, which makes them strong and durable for multiple uses, thereby enhancing their popularity and utilization in the retail sector.

PAPER BAGS PACKAGING MARKET REGIONAL OUTLOOK

The market has been studied geographically across five main regions: North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Well-established E-commerce Sector Support Market Growth in Asia Pacific

Asia Pacific is the dominating region in the global paper bag packaging market. China, with its several large and small paper bag manufacturers, benefits from the easy availability of raw materials and cheap labor, enabling cost-effective production. Countries such as China, India, and Japan exhibit high demand for paper bags for the e-commerce and food products, contributing to market growth. The growing usage of paper bags packaging, especially mailer bags, in the e-commerce sector, is further supporting market growth in the region.

• According to the International Trade Administration, China is the largest e-commerce market worldwide, generating almost 50% of global transactions. In 2021, China became the largest market for e-commerce, generating USD 1.5 trillion in revenue, surpassing the U.S.

Rising Government Initiatives Toward Paper Recycling Drive the North America Market Growth

North America's paper bag packaging market will experience significant growth in the projected years. Governments in the region have implemented stringent norms to reduce carbon emissions and protect the environment. The paper bag market in the U.S. has grown tremendously in recent years, driven by government initiatives focused on paper recycling.

• The American Forest & Paper Association stated that 68% of all paper consumed in the United States was recycled in 2021, which is a rate on par with the highest rate achieved in previous years. In addition, the recycling rate for old corrugated containers (OCC) also increased. The rate recorded was 91.4% in 2021, up from the 2020 rate of 88.8% and a three-year average of 90.5%.

Growing Sustainability Trends Enhance Europe’s Market Growth

Europe's paper bag packaging market is growing substantially. Paper bags packaging are gaining traction in the food, retail, and e-commerce sectors in the region, driven by surging sustainability trends.

• The Confederation of European Paper Industries supports the revision of the current Packaging and Packaging Waste Directive (PPWD) and advocates for raising crucial points regarding the Commission’s forthcoming proposal. Paper-based packaging, developed from sustainably sourced, renewable, and recyclable raw materials, had a recycling rate of 82% in 2019, the highest in Europe.

Augmenting Demand from Retail Sector Drives Market Growth in Latin America

The Latin America region will experience steady growth in the forthcoming years owing to the augmenting demand for paper bags from the growing retail sector. The retail industry in the region has been witnessing significant growth, boosting market’s growth.

Increasing Demand for Paper Bags from the Food Service Sector Thrives Market Development in the Middle East & Africa Region

The growing demand for paper bag packaging from the food sector in the Middle East & Africa region is driving the market’s growth. The growth is driven by increased consumption of fast and convenient foods, changing lifestyles, and stringent regulations aimed at reducing packaging waste.

• According to UAE government statistics, there are over 30,000 food outlets in the UAE, with 60% located in the Emirate of Dubai. The UAE foodservice market is divided into limited-service restaurants, independent restaurants, and chained restaurants. It is further categorized into full-service restaurants, quick-service restaurants (QSR), cafés and bars, and street stalls & kiosks.

COMPETITIVE LANDSCAPE

Key Industry Players

Key Market Participants to Witness Significant Growth Opportunities with New Product Launches

The global paper bag packaging market is highly fragmented and competitive, with key players dominating the market by providing new and innovative packaging solutions in the packaging industry. These key players constantly focus on expanding their customer base worldwide by innovating their existing wide range of products. The key developments by the manufacturers are also analyzed.

Major players in the industry include Smurfit Kappa, International Paper Company, Huhtamaki Oyj, Mondi, Rengo Co. Ltd., Oji Holdings Corporation, and others. Other companies operating in the market are also focused on analyzing market trends and delivering advanced packaging solutions. 

Some of the Key Companies Profiled in the Report:

• Smurfit Kappa (Ireland)


• International Paper Company (U.S.)


• Huhtamaki Oyj (Finland)


• Mondi (U.K.)


• Rengo Co. Ltd. (Japan)


• Oji Holdings Corporation (Japan)


• Welton Bibby & Baron Ltd (U.K.)


• Novolex Holdings Inc. (U.S.)


• ProAmpac (U.S.)


• United Bags (U.S.)


• Global-Pak (U.S.)


• Ronpack (U.S.)


• Packman Packaging (India)


• Gelpac (Canada)


• Southern Packaging, LP (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• June 2024- Mondi collaborated with Cemex and introduced its ground-breaking SolmixBag to the building industry in the Mallorca, Balearic Islands of Ibiza, and Menorca. The SolmixBag is a one-ply paper bag made from 100% kraft paper, designed to easily store and transports products such as screed, dry cement, and coarse pre-mixes.


• April 2023- ProAmpac, a leader in flexible packaging and material science, launched its patent-pending PRO-EVO Recyclable platform. This addition to the ProActive Recyclable series of products, PRO-EVO Recyclable, is an efficient multiwall paper-based self-opening-sack (SOS) bag, certified for curbside recycling, ideal for dry pet food.


• January 2022- Huhtamaki declared the acquisition of full ownership of its paper bag joint venture located in Poland. The company manufactures and sells food service paper bags in Eastern Europe from its facility in Czeladz, Poland. Paper bags have gained an important position amongst Huhtamaki’s product offerings and the acquisition further enables the company to invest and expand its business in Eastern Europe.


• April 2021- Huhtamaki announced the acquisition of Jiangsu Hihio-Art Packaging Co. Ltd, a leading manufacturer of paper bags, wraps, and folding carton packaging in China. With this acquisition, Huhtamaki continues to strengthen its position as the leading food service packaging provider in Asia. It expands its product portfolio in China allowing it to better serve its existing and new customers.


• October 2020- Mondi, a leading global packaging and paper manufacturer, partnered with Adelaide Brighton Cement and Pope Packaging to launch a new water-resistant paper bag called Rain Barrier. Developed with Mondi’s Advantage Protect White sack kraft paper, it is designed for Australian construction market. The paper is rain-resistant for up to six hours and can easily resist water ingress for up to five full days when stored in damp conditions.

INVESTMENT ANALYSIS AND OPPORTUNITIES

In October 2022, Mondi invested USD 431 million in a new kraft paper machine at its Štětí mill in the Czech Republic. The investment is part of Mondi's USD 1.08 billion expansionary capital program, aimed at supporting the growth of its sustainable packaging business.

REPORT COVERAGE

The market research report provides a detailed market analysis, focusing on key aspects, such as top key players, competitive landscape, product types, market segments, Porter’s five forces analysis, and market segments. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the abovementioned factors, the report encompasses several factors that have contributed to the market growth in recent years.

Report Scope and Segmentation-

ATTRIBUTE	DETAILS
Study Period	2019-2032
Base Year	2023
Estimated Year	2024
Forecast Period	2024-2032
Historical Period	2019-2022
Growth Rate	CAGR of 5.69% from 2024 to 2032
Unit	Value (USD Billion)
Segmentation	By Material Brown Kraft White Kraft
By Type Sewn Open Mouth Pinch Bottom Open Mouth Pasted Valve Self-Opening Sacks Others
By End Use Food & Beverages E-commerce Chemicals Agriculture Retail Others
By Region North America (By Material, By Type, By End Use, and By Country) U.S. (By End Use) Canada (By End Use) Europe (By Material, By Type, By End Use, and By Country) Germany (By Type) U.K. (By Type) France (By Type) Italy (By Type) Spain (By Type) Russia (By Type) Poland (By Type) Romania (By Type) Rest of Europe (By Type) Asia Pacific (By Material, By Type, By End Use, and By Country) China (By Type) India (By Type) Japan (By Type) Australia (By Type) Southeast Asia (By Type) Rest of Asia Pacific (By Type) Latin America (By Material, By Type, By End Use, and By Country) Brazil (By Type) Mexico (By Type) Argentina (By Type) Rest of Latin America (By Type) Middle East & Africa (By Material, By Type, By End Use, and By Country) Saudi Arabia (By Type) UAE (By Type) Oman (By Type) South Africa (By Type) Rest of the Middle East & Africa (By Type)