According to Smithers' newly released research report "The Future of Global Jute and Kraft Paper Packaging Bags Market to 2025," the global jute and kraft paper packaging bags market is expected to reach $16.16 billion in 2020. Due to the economic disruption caused by the global COVID-19 pandemic, market demand has decreased by $17.72 billion compared to 2019. However, the report suggests that as the economy recovers, global demand for jute and kraft paper packaging bags will rebound in 2021 and is projected to expand at a compound annual growth rate (CAGR) of 1.8% from 2021 to 2025. By 2025, the global market size is expected to reach $18.34 billion.
In 2019, global production of jute and kraft paper packaging bags was 18.63 million tons, which decreased to 17.01 million tons in 2020. By 2025, production is expected to reach 19.56 million tons. The Asia-Pacific region is the largest regional market globally, accounting for 42.7% of the global market share in 2019.
The COVID-19 pandemic has severely impacted the global economy. After falling by 30% to 40%, global stock markets have recovered, though they remain highly volatile. Governments worldwide have implemented significant short-term interventions in the money supply to support individuals and businesses. With demand significantly reduced, oil prices have plummeted and are now in negative territory.
The global economy is projected to shrink by 4.2% in 2020, which will inevitably affect the packaging market and drag down the jute and kraft paper packaging bags sector. From 2021 to 2025, jute and kraft paper packaging manufacturers will face new challenges as they strive to increase sales.
According to the Smithers research report, four areas may become new growth points for companies:
**Environmentally Friendly Brands**
Consumers' growing environmental awareness is increasingly influencing their preferences for packaging appearance and purchasing decisions. Many consumers favor environmentally friendly, easily recyclable packaging products, such as jute and kraft paper bags.
Many brands are starting to use kraft paper packaging, hoping the "natural" appearance of brown kraft paper will demonstrate their environmental commitment to eco-conscious consumers. A 2018 study by Coleman Parkes Research found that 75% of consumers consider the eco-friendliness of packaging materials when making purchasing decisions. Most consumers are willing to switch from a brand to one that uses environmentally friendly packaging.
Kraft paper shopping bags are also gaining popularity in retail supermarkets, especially among millennial shoppers, who see them as a "fashion statement."
Many brands are developing new uncoated kraft paper packaging to meet this demand. Companies around the world are also making progress in developing non-petroleum-based functional barrier packaging materials. BillerudKorsnäs, for instance, developed Basix Repel Pure, a grease-resistant paper made from plant fibers that is suitable for various food bags needing oil resistance.
Additionally, other natural biopolymer coatings, such as those used in milk cartons for barrier coatings, are being developed and tested on a large scale. Other solutions in development include easily removable functional coatings and adhesives (MFC).
**Product Innovation**
In other markets, manufacturers are developing new jute and kraft paper packaging bags to replace existing plastic packaging. Due to ease of distribution and lower weight, plastic packaging was widely used in the market. However, as multi-layer polymer plastic packaging is difficult to recycle, it is being rejected by more brands. If environmentally friendly alternatives can match the performance of flexible plastic bags, it will present a significant market opportunity for packaging suppliers.
For example, German pet food manufacturer Mera Tiernahrung partnered with Mondi to use Mondi's recyclable FlexiBag paper bag for semi-moist dog food. The paper bag, made from paper with a single PE barrier coating, is fully recyclable. It includes a special two-way valve to release excess air after filling, minimizing space. Additionally, the resealable strip keeps contents fresh after opening.
The growing home food delivery market has also led to the development of tamper-evident packaging to ensure the integrity of food during delivery. There is increasing demand for jute and kraft paper packaging bags in e-commerce, replacing paper-plastic packaging. However, these bags must be durable enough to protect items during shipping and resealable for product returns.
For instance, Italian supermarket chain Esselunga collaborated with Milan-based Botta Packaging to develop a kraft paper bag with a corrugated paper lining for safe delivery of eggs and bottled items from online orders. This bag avoids the need for consumers to separate different materials for recycling, as is necessary with foam plastic packaging.
**Printing Optimization**
Brands are increasingly demanding high-quality printing for packaging products, especially in the fast-moving consumer goods industry, where high-quality graphics determine the visual appeal of packaging on retail shelves. Digital printing (inkjet and toner) is increasingly used for jute and kraft paper bags, raising the need for kraft paper to be more adaptable for improved print quality.
At the 2018 European Optical Year event, HP showcased digital-printed paper bags produced by South Korea's Seejong company. Using the HP PageWide T400S inkjet press, Seejong can economically produce medium and short runs of aesthetically appealing kraft paper bags and can customize them with different languages, seasonal promotions, and more.
**Packaging Downsizing**
In many end-market sectors, there is a continued trend toward smaller packaging sizes. As household sizes shrink, consumers prefer to shop more frequently but in smaller quantities. However, this trend somewhat mitigates the effects of packaging lightweighting, as producing these smaller packages requires more paper material for the same product volume. Additionally, the larger print area for smaller packages requires more ink and adhesives.
