LEATHERHEAD, Surrey, UK and AKRON, Ohio, USA – September 16, 2021 – Increasing use of sustainable packaging will add an extra $2.1 billion to the global market for functional and barrier coatings for paper and board packaging over the next five years. This will see a market valued at $7.84 billion in 2021 rise to $9.97 billion in 2026 – representative of compound annual growth rate (CAGR) of 4.9% for 2021-2026, according to the latest forecasting from Smithers. Total volume will increase from 3.19 million tonnes to 4.10 million tonnes across the same time frame.

This expansion reflects a packaging market looking to rebound from the disruption of Covid-19, and meet brand-owner requirements for technical solutions that will allow them to replace plastic packaging with easier to recycle fibre formats. The new Smithers report The Future of Functional and Barrier Coatings for Paper and Board Packaging to 2026 provides in-depth expert analysis of the current state of the art and evolution in this sector over the next five years.

It characterises the market for six major barrier coating types, by value and volume. This shows that:

• Thermoplastic polymers account for almost two-thirds of volume demand in 2021 and will increase in use over the 2020s, at the expense mainly of higher barrier polymers and wax coatings
• Aluminium will see an increase in use as well
• Fluorochemical coatings – per- and polyfluoroalkyl substances (PFAS) – will lose market share, mainly due to regulatory pressure
• Water-based coatings will prove increasingly popular as an alternative to solvent-based coatings that release VOCs during production
• The same concern will also foster increased use of solid coatings – principally extruded thermoplastic polymers and aluminium foil laminates. 

The paper industry is reacting to the challenge too, by committing R&D funds to new paper and board grades with inherent grease or oil resistance, obviating the need for additional coating steps.

The leading end-use applications for these coatings are in food and beverage packaging, which account for over 79% of demand in 2021. This segment is being bolstered by increased e-commerce sales of food, wider use of flexible papers in place of plastics, and the introduction of new moulded fibre/pulp formats. This market share will decline slightly to 76% however, as sustainability commitments lead brands in other segments – notably health and personal care – to transition to fibre-based packaging.

Geographically the market is split between the three main global regions – Asia-Pacific, Europe and North America. Growth will be strongest in Asia-Pacific, but new brand-owner and regulatory requirements – led by the EU’s Single-use Plastic Directive – will foster new demand in mature economies in Europe. The US remains the largest single market for these coatings in 2021, but it will soon be overtaken by China. The next three largest national markets through to 2026 will be India, Germany and Russia.

The current and future demand in this market is examined in forensic detail in the new Smithers market report The Future of Functional and Barrier Coatings for Paper and Board Packaging to 2026. This provides an authoritative dataset segmenting the market by coating type (Thermoplastic polymers, High-barrier polymers, Aluminium, Waxes, Silicones, Fluorochemicals) and application chemistry (Water-based, Solvent-based, Solid) across 13 end-use packaging applications and 29 leading national and regional markets.
 
This data is contextualised with qualitative analysis of the market, regulatory and technical factors that will define this sector across 2016-2026.