Latin America Active and Intelligent Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Latin America Active and Intelligent Packaging market is expected to register a CAGR of 5.2% over the forecast period (2021 - 2026).With the recent COVID 19, the active and intelligent packaging manufacturers were flooded with a pool of issues that are expected to only last for the short term. Some of the lockdown effects include supply chain disruptions, lack of availability of raw materials used in the manufacturing process, labor shortages, fluctuating prices that could cause the final product's production to inflate and go beyond budget, and shipping problems.

Key Highlights

• With the growing urban population and changing lifestyle trends worldwide, the demand for ready-to-eat, frozen meat, and packaged food is increasing. The supply of frozen foods, meat products, vegetables, and fruits surpass boundaries, giving regional markets global exposure. Moreover, with the retail industry propelling rapidly, the need for attractive and advanced packaging is also increasing.
• The increase in counterfeit products, especially in the pharmaceutical and personal care industries in emerging economies, also compelled companies to use technologies, such as RFID, during packaging. All these factors account for a substantial rise in the demand for active and intelligent packaging. However, the initial capital needed due to higher costs of installation and implementation and security issues regarding these systems is challenging the market's growth.
• RFID is one of many automatic identification technologies that offer some potential benefits to meat production, distribution, and retail chain. These include traceability, inventory management, labor-saving costs, security, and the promotion of quality and safety. The prevention of product recalls is also considered a key role of RFID technology. Thus, it acts as a major driving factor for the increased demand from the customers for such products for packaging.
• Although intelligent packaging is distinctly different from active packaging, the features of intelligent packaging enable the user to use it to check the effectiveness and integrity of active packaging systems, bringing added features and complementing each other. Intelligent packaging can be considered the enabler of the other packaging features that end-user industries can utilize, and in the process, help their customers offer quality products.

Key Market Trends

Longer Shelf Life Will Drive the Market

• The increasing demand for flexible packaging can be attributed to its capability to increase the sustainability of the products, by increasing their shelf life. This packaging type also enables the introduction of new products, like frozen food with an increased shelf life up to three months in a home freezer before starting to show signs of freezer burn.
• According to the Wisconsin Economic Development Corporation, Poland's food processing industry is experiencing healthy growth on account of increased exports, which is expected to create additional demand for flexible packaging as the exported products demand packaging with increased shelf life.
• Aluminum foil packaging is the most widely used in the food industry. Many groceries are easily affected by sunlight, damaging their appearance and taste. Aluminum foil is the most viable solution to cater to these packaging requirements. Thus, aluminum is regarded as the ideal core packaging material for dairy products, pastries, and beverages. For instance, dry milk in hermetically sealed packages made from laminated foil has a shelf life of 2 years.
• Tailored barrier materials in pouches and other forms of flexible packaging help protect the food from moisture, oxygen, UV rays, grease, and contamination. They can significantly extend the products' shelf-life. The market is witnessing the usage of flexible packaging in many innovative ways. These packaging solutions range from single-use pouches, zip locks, to resealable closures.

Food is One of the Significant Factor for Market Growth

According to the Brazilian government, by the year 2021, the retail sales in the packaged food market in Brazil is anticipated to reach USD 116.6 billion, a growth rate of 32.2% since 2016. High growth rates in the forecast include ready meals, breakfast cereals, baby food, sauces dressings and condiments, processed meat, and seafood and soup.

Based on the material types, the packaging market in Argentina is categorized into four segments, such as plastic, paper, aluminum foil, and cellulose packaging materials. The major leading players in the packaging industry in Argentina are Amcor, Bemis, Printpack, and Sealed Air and the major products where packaging is applied are baby food, baked goods, breakfast cereals, confectionery, dairy, edible oils, ice cream, and frozen desserts, processed fruit and vegetables, processed meat, and others.

The companies involved in food processing and agribusiness (Tyson, Bachoco, Driscolls, Sunny Ridge, etc.) also require better and greener packaging technologies than the available ones. Baked and salted snacks are also showing strong growth, providing extensive opportunities for flexible packaging manufacturers in Mexico. The salted snacks product group, including potato chips, tortilla, and corn chips, is the most significant product segment. Also, a greater reliance on ready-prepared nutritious foods drives the packaging market in the snack product segment in Mexico.

There is an increasing demand for stand-up pouches across Latin America. According to a survey conducted by Aptar Group, a multinational specialized in packaging dispensers' systems, specifically in the food sector, the projections of expansion of stand-up pouches are estimated to be 6.2%, 6%, and 5.5% through 2017-2019. The regional growth expectancy for stand-up pouch format is 9.30%. This increase in demand is anticipated to boost the market for barrier films. Further, the Chilean packaging industry is characterized by functional, on-the-go, and personalized packs that enhance the overall use and appeal of a product. Flexible packaging is the major market share gainer with approx. growth of 0.9% during 2016-2021, which is largely due to the benefits of being convenient and cost-effective

Competitive Landscape

The Latin America Active and Intelligent Packaging market are moderately consolidated, with a few major companies like BASF SE, Amcor Ltd, Honeywell International Inc., Landec Corporation, Bemis Company Inc., Crown Holdings Inc.Ball Corporation, Timestrip UK Ltd are some players. The companies are continuously investing in making strategic partnerships and product developments to gain more market share. Some of the recent developments in the market are:

• May 2021 - Four04 Packaging Ltd was identified as an ideal partner for Coveris' strategic growth plans through a continuous market screening procedure. Packaging for fresh food and fruit, as well as bread, is a specialty of the company. It offers a product portfolio that ideally complements Coveris' existing product lines in these markets.
• May 2021 - A new thermoforming packaging solution has been developed by Sealed Air. When compared to commonly used laminates, Sealed Air claims that the new CRYOVAC brand LID830R is a thin, high abuse resistance, anti-fog top lid film that can reduce packing weight by up to 50%.

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