Rapidly increasing demand for packaging materials that provide greater protection to their contents is driving growth for functional additives and barrier coatings, according to a new report from Smithers. The research titled, The Future of Functional Additives and Coatings for Barrier Plastic Packaging to 2027
, found that this growth is especially noticeable in the food, beverage, and pharmaceutical industries.
A variety of barrier technologies have been commercialised that preserve, protect, and optimise product shelf life, according to Smithers. They also reduce the need for preservatives, provide transparency and gloss, and serve as a printing substrate. Without barrier packaging, perishable goods such as food, beverages and pharmaceuticals are susceptible to deterioration.
Global functional additive and barrier coating sales for plastic packaging at current prices grew during 2017-21 from $3.2 billion to $3.8 billion, which corresponds to an annual average growth rate of 4.5%. For 2022, sales at constant (2021) prices are projected at $4.0 billion and are forecast to grow during 2022-27 at an annual average rate of 5.1% to just over $5.1 billion. Functional additives are expected to grow at a slightly higher rate than barrier coatings over the forecast period.
Demand for functional additives such as oxygen scavengers, UV stabilisers and clarifying agents is growing fast as these functional additive products are well positioned in faster-growing growing markets, including convenience foods and beverages. They also continue to find new markets and applications.
Global functional additive sales for plastic packaging at current prices grew during 2017-21 from $1.5 billion to $1.8 billion, which corresponds to an annual average growth rate of 4.8%. For 2022, sales at constant (2021) prices are projected at just over $1.9 billion and are forecast to grow during 2022-27 at an annual average rate of 5.6% to almost $2.6 billion. Oxygen scavengers are the largest product group, followed by UV light stabilisers and anti-static agents. UV light stabilisers and clarifying agents are forecast to grow faster than the overall market average rate.
Functional additives demand for plastic packaging has risen faster than overall plastic packaging demand as converters look for lower cost solutions. Market growth has been driven by replacement of traditional packaging materials by plastics and a desire to extend product shelf life and reduce food wastage.
Global barrier coating sales for plastic packaging at current prices grew during 2017-21 from almost $1.7 billion to just less than $2.0 billion, which corresponds to an annual average growth rate of 4.2%. For 2022, sales at constant (2021) prices are projected at approximately $2.0 billion and are forecast to grow during 2022-27 at an annual average rate of 4.6% to nearly $2.6 billion.
Barrier coating material usage
Polyvinylidene chloride (PVdC) is the largest product category, followed by aluminium oxide (AlOx) and metallised coatings. AlOx coatings are forecast to grow at the fastest rate, followed by silicon oxide (SiOx). Carbon, polyvinyl alcohol (PVOH) and ethylene vinyl alcohol (EVOH) are also expected to grow at rates above the overall market average rate. PVdC coatings are forecast to grow at the slowest rate due to gradual substitution by other polymeric coating materials. Metallised coatings and acrylics are also forecast to grow below the overall market average rate.
Developing economies take the lead
Functional additives and barrier coatings demand will continue to be driven primarily by the faster-growing emerging and developing economies of Asia-Pacific and the Middle East & Africa during the forecast period, rather than the slower-growing and more mature advanced economies of Western Europe, North America, and Japan.
Impact of Russia’s conflict with Ukraine
The Russian invasion of Ukraine will have negative implications for the global economy. The extent to which global economic activity will be impacted by the war will depend crucially on its duration and severity, and the extent and duration of the economic sanctions against Russia. The higher crude oil, plastics and energy prices resulting from the invasion will increase inflation and reduce consumers’ personal disposable incomes, which in turn will lead to lower discretionary household incomes and a reduction in consumer spending, including spending on packaged goods.
The logistics sector is also severely impacted by the war, leading to supply chain disruption between China and Europe, and possibly leading to lower material availability and longer delivery times for plastic packaging producers.
Sustainability has major implications for functional additives and barrier coatings. Brand owners and retailers are responding to consumers’ demand for more sustainable packaging to reduce the environmental impact of packaging by examining opportunities to replace plastics, incorporating a higher proportion of recycled content in plastics packaging, adopting bioplastic packaging and greater use of refillable packs.