The African continent will become a high growth region for the packaging industry, with demand being driven by increased markets for consumer products, burgeoning individual incomes, an expanding population of youthful consumers and growing domestic economies-particularly those in East and West Africa, says Deloitte.’

Speaking at the Packaging and Beyond Africa Innovation Conference in Johannesburg yesterday (6 June, 2015), Roy Campbell, Partner and Manufacturing Industry: Forestry, Paper & Packaging Sector Leader at Deloitte, said that International Monetary Fund forecasts predicts growth of 6.5% p.a. over the next five years in East and West Africa, putting the two regions on par with the fastest growing regions of mainland China and emerging Asia.

“Expectations for growth in South and Southern Africa are not as optimistic, with IMF forecasts putting GDP increases at around 2% in South Africa and 3 – 4% in Southern Africa over the same time frame. East Africa, however, is expected to have a GDP growth rate of 8.1% by 2016,” says Campbell.

Contrary to some commonly held perceptions, African growth will not be primarily driven by commodities. Eight of the twelve fastest- growing economies in Africa don’t rely on natural resources for their prosperity. Although there are still risks attached to investment in Africa, the IMF also expects 15 African countries to grow faster than China. One of the primary factors behind this high growth rate is that this is generally off a relatively small GDP base and that Africa has youth on its side. Already, 25% of the world’s under 18’s are found in Africa.

This figure, due to grow to 50% by 2100, guarantees growing consumer markets, demands for products and therefore increased opportunities for the packaging industry that serves the manufacturing and consumer sectors.

“Like its international counterparts, the South African packaging industry, and those operating in African markets, could expect to meet the challenges posed by trends in the global consumer packaging market,” Campbell said.

These are:

·         An increase in demand for premium packaging.

·         The emergence of biodegradable plastics.

·         Increased use of multipacks and small packs.

·         A need for sustainability and innovation.

The global consumer packaging market was valued at US $ 431.12 billion in 2013 and is expected to reach US $ 519.06 billion by 2018, growing at a compound annual growth rate of 3.78% a year. Within this market there is increased demand for premium packaging, mainly from the cosmetics and household segments. It is in these categories that consumers use the quality of the packaging as a basic indication of the quality of the product it contains.

The emergence of biodegradable plastics will have a positive impact on growing consumer markets. The adoption of materials such as polyvinyl alcohol, polyanhydrides and polylactic acid by packaging companies will reduce the market share of conventional plastic packaging materials over the next few years.  This will, in part, be driven by environmental compliance regulations which, will rely on hefty penalties to drive industry change.

With increased urbanisation and mobility becoming the norm in societies in Africa and across the world, the move towards small packs and multipacks is becoming more important. For manufacturers this trend will create opportunities to encourage brand switching. Merchants will adopt these products as they save shelf space and rely on attractive packaging to encourage sales.

Rapid urbanisation and increased health awareness have also seen a rise in the consumption of food and beverage products, as well as alcoholic and non-alcoholic beverages. Increasingly this accounts for changes in packaging trends with glass containers and bottles offering an aesthetic appeal to people who want to be associated with the sense of timeless prestige that this packaging material offers.

The onus on packaging companies is to ensure that they have the ability to meet these demands. Those failing to do so could end up battling to survive.

The need for sustainability and innovation will be increased by consumer demand for packing materials that are eco- friendly.  Vendors are already investing in R & D programmes to develop materials that can be recycled, but retain their traditional abilities to resist friction, moisture and heat.  AeroClay technology is at the cutting edge of packaging developments, using clay and other ingredients to develop new, versatile materials that are sturdy, eco-friendly and temperature resistant.

The benefits of this technology are that packaging material is insulated and keeps products fresher for longer.

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