In 2024, the market size of sack kraft paper is estimated to be USD 12.07 billion and is expected to reach USD 14.57 billion by 2029, with a compound annual growth rate (CAGR) of 3.82% during the forecast period (2024-2029). The primary driver for market expansion is the significant growth in the construction industry. Other major drivers of the sack kraft paper market growth include stringent regulations and bans on the use of plastics in many regions of the packaging industry and improvements in packaging applications. Growing awareness among environmentalists and governments about the harmful effects of plastic use has forced them to focus on more eco-friendly alternatives, leading to the adoption of sack kraft paper. Steadily rising demand from the construction sector due to infrastructure projects has increased the use of sack kraft paper. Additionally, the growing demand for environmentally friendly and biodegradable packaging materials will further drive growth. According to the Bureau of International Recycling (BIR), about 420 million tons of paper and cardboard are produced annually, with over half of the raw materials coming from recycled sources. The demand for biodegradable packaging as a substitute for plastics will also promote market growth. For instance, in Canada, plastic pollution harms rivers, lakes, and oceans, endangering wildlife and generating microplastics in water. According to Borden Ladner Gervais, Canadians throw away 3 million tons of plastic waste annually, with only 9% being recycled, meaning that the vast majority of plastic ends up in landfills, with around 29,000 tons of plastic waste entering the natural environment. Bags filled with powdered materials such as gypsum, cement, fine sugar, clay, etc., require high-quality paper, which has greatly promoted market growth. The lower pressure these bags endure during filling also reduces breakage and increases their adoption in the construction (cement) industry. The growing popularity of e-commerce and associated developments have led to the premiumization of kraft paper packaging. This includes the demand for kraft paper materials that can print high-quality graphics on short-run printing. Companies like Mondi are keeping pace with such developments by developing new products for premium creative printing and packaging applications, including shopping bags. Additionally, many innovations have been launched by participants, improving and accelerating the production of sack kraft paper and paper bags, and enhancing product protection through real-time calculations and paper grade selection. However, the emergence of alternatives such as plastic materials, flexible intermediate bulk containers (FIBCs), and bulk bags, as well as the rising prices of sack kraft paper, could hinder market growth. After the outbreak of COVID-19, the global demand declined sharply due to the closure and lockdowns of non-essential businesses in many parts of North America, Europe, and Asia, forcing companies to take a series of measures to mitigate the financial impact. This included extensive production cuts, reduced capital expenditures, and strict cost management initiatives. However, by mid-year, the return to more normal operations, inventory reductions, and increasing demand helped major market participants mitigate the effects of the pandemic. The global packaging ecosystem has also been affected by the Russia-Ukraine war.
**Food Expected to Hold a Significant Share in the Market**
Among the many end-user verticals, the food industry is a major user of sack kraft paper, driven by additional demand from the food sector. The shift of the packaged food industry toward eco-friendly packaging has resulted in increased demand for sack kraft paper. For example, according to the U.S. Bureau of Labor Statistics, the average household food expenditure in the U.S. was $5,259 in 2021. The transportation of food items such as flour, sugar, starch, food additives, processed or dried fruits, eggs, or milk often requires sack kraft paper. All these factors have increased the demand for open-mouth sacks. The preference of younger generations for fast food restaurants also meets the demand for sack kraft paper. The U.S. Census Bureau reported that the annual sales of U.S. fast-food restaurants increased from $328.4 billion in 2020 to $389.5 billion in 2021. This sales growth will support the expansion of the sack kraft paper market. Furthermore, department stores and supermarket chains often use kraft paper bags. According to the U.S. Census Bureau, total sales from supermarkets and other department and grocery stores amounted to $765.98 billion in 2021, up from $741.57 billion in 2020. Chain supermarkets dominate the U.S. food retail sector. Walmart and Kroger are two top grocery companies in the U.S., owning and operating several smaller supermarkets across the country. In addition, consumer preferences, along with green regulations from the FDA in various regions, have also driven the development of sack kraft paper packaging in the food industry. The European paper bag and sack kraft paper industry has made many contributions to development, making paper bags the perfect food packaging. According to the Paper Shipping Sack Manufacturers' Association (PSSMA), the paper shipping and consumer bags used by the food industry have become a billion-dollar industry, with over 3 billion paper bags shipped annually.
