Packaging an Industry for Growth

The packaging industry plays an important role in our modern world – an ubiquitous but often overlooked aspect of modern manufacturing and trade. On a basic level, a piece of packaging allows us to pack and transport finished goods, protecting it from damage and, in the case of foods and beverages, preventing spoilage and loss of nutritional value. Besides utility, packaging also fulfils a marketing function, serving to enhance the overall attractiveness of a product.

Today, there is a wide spectrum of packaging materials and processes, which has arisen to cater to the packaging needs of an increasing diverse array of manufactured goods and materials. Packaging companies are also constantly looking to innovate, developing packaging solutions that are more effective, durable, economical, and sustainable, to stay ahead of the competition. 

A Small but Vital Industry in Singapore 

Based on figures from the Economic Development Board of Singapore (EDB), the packaging industry in 2013 accounted for about 0.2 per cent of the national GDP. In all, there has been a cumulative annual growth rate (CAGR) of some 1 per cent in manufacturing output from 2009 to 2013.
This has happened while the number of establishments consolidated from 264 in 2009 to 249 in 2013. The number of workers has also seen a similar decrease from 8,803 to 8,562, resulting in value-added per work rising from S$61,000 to S$67,000. This is indicative of an industry consolidation of sorts, while packaging firms get more productive and efficient too.
Amongst local packaging firms, those producing paper-based packaging make up the largest market segment, followed by plastic, metal and wood packaging. The packaging ecosystem in the Republic currently comprises those dealing with packaging materials, equipment supply, and machinery design and consultancy.

Asia to Become Key Market for Global Packaging Industry 

In the Future of Global Packaging to 2018 report by Smithers Pira, it was forecasted that the global packaging sales is set to reach over US$1 trillion by 2018. Meanwhile, Asia will increasingly become the key market for the global packaging industry, growing from 36 per cent of the marketing in 2012 to 40 per cent in 2018. 
Amongst the key factors driving overall growth for the sector include the rapid urbanisation and growing middle class consumer segments which are fuelling demand for new products in emerging economies such as China, India and more. For the developed markets, factors affecting the development of the packaging industry include shifts in consumer preferences such as the increasing popularity of smaller and more convenient packaging.

Future Trends Impacting the Global Packaging Industry 

To stay ahead of competition, packaging manufacturers around the world have been constantly innovating to stay ahead. At the same time, it has to stay one step ahead to cater to new consumer trends. One example is the growth of prepared food and meals across the years.
Packaging firms have had to support this rising trend with the development of new packaging solutions offering enhanced product protection and preservation, amongst others. With our increasingly mobile lifestyles, more consumers are opting for prepared foods and drinks that have some form of re-sealable element in their packaging too.

Sustainability: The New Buzzword in Packaging

Globally, growing consumer awareness of the importance of sustainability, has driven manufacturers and their packaging partners to develop more eco-friendly and sustainable packaging solutions. According to a report by the US-based Association for Packaging and Processing Technologies, one of the top three trends affecting global packaging is greater consumer awareness of recycling and environmental issues for packing. 
This state of affairs is also backed by a recent Mintel report on the 12 key global food and drink trends for 2016, which noted that “Eco is the new reality”. Already established in Africa, Australia and New Zealand and becoming mainstream in Europe, this trend is also emerging in North and South America and parts of Asia too. All in all, the report states that sustainability has evolved to become a necessary product development consideration for the common good. 

Singapore Packaging Going Green Too 

Singapore has also been welcoming the shift to more sustainable packaging. In 2007, the Republic launched the Singapore Packaging Agreement (SPA), a joint initiative by the government, industry and non-government organisations (NGOs) to reduce packaging waste (which constitutes about one-third by weight of Singapore’s domestic waste). The SPA is voluntary, so as to provide flexibility for the industry.
A second SPA was renewed on 1 July 2012, following the expiry of the first agreement. As of 2015 the signatories have cumulatively reduced about 26,000 tonnes of packaging waste and saved more than S$58 million. The second SPA will last till 30 June 2020, with expectations that signatories will continue to build on the good work so far.
In 2016, 16 companies were recognised for their notable efforts and achievements in reducing packaging waste, at the 3R Packaging Awards. Amongst the winners include international firms such as Coca-Cola and Nestle and local small and medium enterprises (SMEs) such as Sunfresh Singapore and Thong Siek Food Industry. 
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