NEW YORK, July 16, 2020 /PRNewswire/ -- As a result of the changing lifestyle, the usage of smokeless tobacco, cigars, shishas, dried tobacco, and other premium tobacco products is increasing. Another important factor behind the rising demand for such products is the surging disposable income. Moreover, such products are readily available on e-commerce platforms and at retail stores.
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Thus, owing to the growing popularity of premium tobacco products, the requirement for attractive packaging, such as zipper pouches and metal and wooden cases, is also escalating. This is why the global tobacco packaging market would witness a 3.7% CAGR between 2020 and 2030, since having a $19,134.6 million valuation in 2019. The packaging not only makes the products look good, but also increases their shelf life and protects them against aroma loss.
Currently, the paper category dominates the market, as it is the material of choice for packaging cigarettes, which are the most popular tobacco-containing products around the globe. In 2019, around 6 trillion cigarette sticks were produced, which were used by around 1 billion smokers, as per the World Health Organization (WHO). This is why the demand for paperboards and paper has increased for cigarette packaging purposes. Moreover, paper is also popular as a packaging material for other tobacco products, as it is environment friendly.
The secondary packaging bifurcation would continue holding larger share in the tobacco packaging market till 2030. This is attributed to the economic feasibility and ability of this type of packaging to protect the products against damages till reaching the customer. In addition, trays, corrugated boxes, cartons, and other kinds of secondary packaging help in the mass shipment of tobacco and related products to the point of sale (POS) or end-consumer, by keeping the individual units together.
Historically, Asia-Pacific (APAC) was the largest consumer of tobacco packaging materials, and the region is also predicted to experience the highest CAGR, of 3.9%, in the market during 2020–2030. This would be because China is the largest user as well as producer of cigarettes in the world. Almost one-third, or 300 million, tobacco smokers around the world in 2019 resided in China alone, according to the estimates of the WHO. Similarly, China National Tobacco Corporation manufactures around a third of the cigarettes produced on earth. To cater to the increasing demand for tobacco products in the country, the packaging niche is undergoing rapid technological enhancements. In addition, in Japan, South Korea, India, and Thailand, the middle class is witnessing an increment in its disposable income, which is leading to the rising demand for tobacco products here. Therefore, with increasing production, the consumption of packaging materials, including wooden boxes, paper & paperboards, and cans, is also growing sharply in the region.
Facility Expansions Being Seen as Key Engine of Growth by Players
Players in the market are rapidly expanding their manufacturing plants, with the aim of increasing their production capacity and gaining a larger share of the industry revenue pie.
For instance, in February 2019, a new folding carton plant was inaugurated by Smurfit Kappa Group Plc in Tijuana, Mexico. Boxes, trays, and other folding carton materials are being manufactured at this facility for industrial, consumer electronics, food and beverage, medical, and tobacco industries.
In the same vein, Amcor Plc installed a Rapida-106 system each at its Polish and Mexican tobacco packaging facilities in October 2017. Consisting of 17 coating, printing,and drying units, the machines have significantly increased the packaging product output of the company. Moreover, with the capability to produce more in one cycle, the machines are making the process cost-effective and faster.
The most prominent global tobacco packaging market companies include Amcor Plc, Mondi Plc, International Paper Company,Smurfit Kappa Group Plc, Packaging Corporation of America, ITC Limited, Sonoco Products Company, Bihlmaier GmbH, WestRock Company, Duke Packaging, TFP Sp. z o. o, Winkel Verpackungen GmbH, Emenac Packaging, Stora Enso Oyj, and Leser GmbH.
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