It’s been clear for a while that the packaging industry is at a critical point. The ongoing demands for sustainable solutions, evolving consumer behaviours, economic fluctuations, and technological advancements demands a radical rethink of traditional packaging practices.
To understand how this can impact your business, we delve into the critical trends reshaping the packaging landscape. As we look towards 2030, packaging will need to become more sustainable, interactive, inclusive, and cost-effective. CEOs in the packaging industry must remain agile, embracing new technologies and sustainable practices to navigate the dynamic landscape and meet the rising expectations of their customers. The future of packaging is not just about containment and protection; it's about creating value through innovative solutions that enhance the consumer experience and contribute to a more sustainable world.
Navigating Macro Challenges and Disruptions in Manufacturing
The packaging industry has faced unprecedented challenges in recent years. From soaring material costs and supply chain disruptions to economic uncertainties, businesses have had to adapt rapidly to survive and thrive. This section delves into the macroeconomic factors impacting the packaging sector, exploring how these challenges are shaping industry trends and strategies.
Economic Headwinds and Opportunities
The UK economy is navigating a complex landscape with stagnant living standards and uncertain manufacturing growth. While these factors may dampen short-term demand for packaging, they also present opportunities for businesses to differentiate themselves. Leaders should prioritise cost reduction through efficiency gains and automation and invest in research and development for innovative products. These opportunities will be supported by the Labour government which promises a more “business first” approach to government support.
Global Economic Trends and Demographic Shifts
Despite short-term disruptions, the global economy is projected to grow, driven by emerging markets and an expanding middle class. This trend bodes well for the packaging industry, as increased consumer spending translates into higher demand for packaged goods. However, demographic shifts, such as population ageing and the rise of single-person households, will necessitate adaptations in packaging design and formats.
The Perfect Storm: Material Costs and Supply Chain Disruptions
The convergence of factors including the COVID-19 pandemic, Brexit, war in Ukraine, and global supply chain imbalances created a perfect storm for the packaging industry. The dramatic increase in material costs, particularly for corrugated cardboard, placed immense pressure on businesses. While some relief is anticipated in 2024, ongoing supply chain complexities will continue to pose challenges. Leading manufacturers in the UK are reviewing their lean management practices, particularly the “waiting” i.e. The idle time when resources (people, products, equipment) are waiting for the next steps in the process, to see where efficiencies can be achieved. The idea of holding zero stock made sense - until the pandemic closed off many of the supply chains.
Sustainability: Consumer Preferences
Consumer attitudes towards packaging have undergone a significant shift, with sustainability emerging as a paramount concern. Beyond the simplistic notion of recycling, consumers are increasingly scrutinising the entire lifecycle of packaging, from material sourcing to disposal. A holistic perspective on environmental impact is essential for businesses to meet these evolving expectations. But that comes at a cost.
While recycling remains a crucial aspect of sustainable packaging, it's equally important to consider the packaging's primary function: protecting the product and ensuring its safe delivery. In many cases, the environmental impact of the product itself far outweighs that of its packaging.
Therefore, optimising packaging design to minimise material usage without compromising product integrity becomes paramount. By adopting a comprehensive approach that balances sustainability with performance, businesses can make informed decisions about the most environmentally responsible packaging solutions for their products.
The growing emphasis on sustainability has also fueled a surge in demand for refillable and reusable packaging options. Consumers are increasingly seeking alternatives to single-use packaging, and businesses are responding with innovative solutions. This trend is particularly pronounced in categories like personal care and household cleaning products, where refillable systems can significantly reduce packaging waste. The market for reusable and refillable packaging is expanding rapidly, driven by both consumer preference and environmental regulations.
Sustainability: Government Regulation
In 2018, packaging generated a turnover of EUR 355 billion in the EU. It is an ever-increasing source of waste, the EU total having increased from 66 million tonnes in 2009 to 84 million tonnes in 2021. Each European generated 188.7 kg of packaging waste in 2021, a figure that is expected to increase to 209 kg in 2030 without additional measures.
The need for greater sustainability and resource efficiency has accelerated the drive towards reusable packaging. However, widespread adoption requires collaboration between policymakers, manufacturers, retailers, and consumers. The evolving Packaging and Packaging Waste Regulation in Europe offers a glimpse into the future regulatory landscape, though challenges and uncertainties remain. While the UK has left the EU, our government has amended existing regulations to cover extended responsibilities (EPR).
The Packaging Waste (Data Reporting) Regulations 2023 came into force in England in February 2023, as the first step towards implementing the Extended Producer Responsibility (EPR) scheme. Under the Regulations, organisations have been required to collect and report on the amount and type of packaging they place on the market in the UK from March 2023. This data will eventually be used to calculate the fees they will be required to pay. Smaller producers must maintain records of the total weight of packaging they have supplied and a breakdown of the type of packaging. Large producers must collect a wider pool of information, including the packaging waste they have collected and sent for recycling.
EPR for packaging fees have been deferred for 1 year. Fees for packaging placed on the market in 2024 were starting in October 2024. They will now start in October 2025.
From 2025, businesses may need to comply with the following, depending on the reported 2024 data:
- pay a waste management fee
- pay scheme administrator costs
- pay a registration charge to the environmental regulator
- get PRNs or PERNs to meet your recycling obligations
- report data about packaging you supplied or imported – this includes packaging around raw materials
Technology: Rise of the Robots?
Technological advancements, such as artificial intelligence, automation, and robotics, offer UK manufacturing a pathway to increased efficiency, productivity, and competitiveness. While the initial investment and the need for upskilling the workforce can be challenging, the potential rewards are substantial, including improved product quality, reduced costs, and the ability to take on more complex manufacturing processes. Technological advancements are developing at pace, we’re still a few years from fully automated human robotics (even though BMW, Mercedes, Hyundai and Toyota, are testing the technology in their assembly plants).
Partnerships: All for One and ….
UK manufacturing faces the challenge of building resilient and agile supply chains to withstand disruptions such as those experienced during the pandemic. Over-reliance on global supply networks has exposed vulnerabilities, necessitating a focus on domestic supply chain development. This is not exactly the same as "reshoring" but does present an opportunity to foster closer collaboration between UK businesses, driving innovation, shared knowledge, and reduced lead times. By strengthening domestic supply chain partnerships, manufacturers can enhance their competitiveness and resilience.
Ultimately, success in the evolving packaging landscape hinges on a combination of regulatory awareness, strategic agility, and technological innovation. By proactively addressing these challenges, businesses can not only ensure compliance but also position themselves as leaders in sustainable and responsible packaging practices.
Driving Talent Acquisition for the Packaging Industry
For over a decade, we’ve been at the forefront of connecting top talent with leading packaging businesses. We understand the unique challenges and opportunities within the industry, and our mission is to deliver exceptional recruitment solutions that drive your success.
With a proven track record of partnering with companies of all sizes, from innovative startups to established industry giants, we possess the expertise to meet your specific staffing needs. Our tailored approach ensures that we identify and attract the most qualified candidates who align with your company culture and strategic goals.
At the heart of our success is a team of industry-focused recruitment specialists. We combine in-depth knowledge of the packaging sector with a passion for finding the perfect fit. Our rigorous recruitment process, coupled with a dedicated training academy, guarantees that our consultants are well-equipped to deliver exceptional results.
By choosing us, you’re investing in a strategic partnership that goes beyond traditional recruitment. We’re committed to helping you build high-performing teams that drive innovation and growth within your organisation.
Let's discuss how we can elevate your talent acquisition strategy.
Phone: 0333 307 7777 | Email: enquiries@pioneer-selection.co.uk