Bag-in-Box Market

How the Historical and Future Outlook for Bag-in-Box Market Match Up?

The first viable bag-in-box system was designed by the American chemist named William R. Scholle in 1955 for the safe transport and dispensing of battery acid. At that time, some liquid (or semi-liquids) productspackaged in bag-in-box containers included inexpensive wines and some industrial chemicals. This range of end use was slowly increased to encompass applications across diverse industries. The beverage industry hascontinued to be a key market forbag-in-box.

The need for replacing rigid packages which are mostly made up of plastic material and curbing high cost on transportation, resulted in the developments of bag-in-box packaging solutions. Furthermore, customers’need for versatile and spill proof packaging solutions for their beverages has resulted in increasing demand for bag-in-box.

Bag-in-box packaging solutions can keep stored contents safe on turbulent trips. End users are have been looking forone stop solution to ensure both economic transportation and effective storage of liquid materials. Therefore, flexible bag-in-boxes are gaining more popularity nowadays. According to FMI’s analysis, sales of bag-in-box increased 1.1 times during 2016 and 2020.

Bag-in-boxes are largely used for packing and transport of liquid products including alcoholic and non-alcoholic beverages. Besides this, high quality bag-in-box made up of low density polyethylene or LDPE, metallized-polyethylene terephthalate (PET),or other materialsare extremely useful for chemicals storage or storing of semi liquid food products. These packaging solutions ensure optimal freshness of the consumable products. Food, chemicals, and petroleum end use industries are expected to hold major chunk in the market, during the forecast period.

Increasing trade of food and beverage materials among various regions has been recorded between2015 and 2019. Manufacturers are now highlighting on the hygienic bag-in-box packaging for ensuring product safety of pharmaceutical during transportation which uplift the sales of bag-in-boxmarket.

What are the Factors Causing High Sales of Bag-in-Box?

Bag-in-boxensures easy transportation of large volume of liquid products, which could weigh more than 20 liters. The rise in demand for hygienic, cost-effective, and convenient packaging solutions in comparison totraditional liquid packaging choices such as glass and metal containers is a chief factor enabling solid growth in the bag-in-box consumption.In addition to this, the lightweight characteristics of bag-in-box helps in reducing the overall transportation and handling costs.

As per FMI analysis, higher yield margin is estimated with the prolonged use of higher value and large sized reusable bag-in-box which are cost effective over smaller ones having shorter life spans.Driven by increasing awareness about numerous advantages of the packaging solution, the global bag-in-box market is estimated to increase at a CAGR of 5.7%, during 2021-2031.

Will Cost-effectiveness of Bag-in-Box Packaging Drive Sales?

Bag-in-boxpackaging solutions are 30–45% more profitable in comparison to regularliquid or semi-liquid packaging options such as glass and metal. Bag-in-boxesare lightweight due to their construction design, which, in turn, helps inmoderating overall transport and handling charges.

Also, multi-layer and high barrier filmssuch as EVA and nylon used as liners in bag-in-box help beverage, pharma and chemical product manufacturers to prolong shelf life of end of products. From a manufacturing lookout, the application of plastic-based products helps in attaining economies of scale. Extended shelf life of products allows venders to upsurge shelf display period, which benefits minimize product waste.

Manufacturing firms engaged in the production of bag-in-box are anticipated to shift their attention towards biodegradable plastic raw materials to offer more sustainable solutions. These factors are expected to drive growth over the coming years.

How is Demand from Wine Industry Affecting Bag-in-Box Sales?

According to International Organisation of Vine and Wine in 2019, the global wine export market increased in comparison to that of 2018 both in terms volume, which was at 105.8 million hectoliters,and in value, which reached US$ 37.7 billion.The rising demand for bag-in-box packaging solutions from the wine packaging producers is one of the key growth drivers.

Wine producers from Europe and North America are largely inclined to bag-in-box for final packaging purposes because of various benefitsit offersin comparison to bottle packaging. Moreover, bag-in-boxesare easy to distribute in more economical way.

Oxygen Transmission Rate (OTR) is a key factor in defining the inclusive quality of the winepackaging. Bag-in-box offers a low oxygen diffusion rate over glass bottles and is thusextensivelyfavored by wine makers across the globe. The wine packaging business accounts for approximately half of the global demand for bag-in-box.

In 2019, Italy, France, and Spain have dominated the international trade of wine and are anticipated to capture highest market share in terms of the consumption of bag-in-box for wine packaging.

How are Bag-in-Boxes Manufacturers Making Their Place in e-Commerce?

With global e-commerce business anticipated to reach US$ 4.5 trillion in 2021, brandsmust reconsider how they present their wide array of products in order to sustainamid competition. Liquid goods in conventional rigid bottles or vessels with plasticcaps, pumps, or nozzlesare at major risk of being spoiled in transportation due torupturing or unthreading.

Bag-in-box comprises a sturdy, anti-ruptureflexible bag with a dispensing tap containing the liquid inside. It is a primary packing which is sheltered within a biodegradableexternal cardboard box, the secondary packaging.This confirmsthat dispenser is not damaged thereby evading product leaks, unhappy customers and product refunds during the e–commerce supply. Bag-in-box provides the right sized shipment solution with greaterefficiency of the outer cardboard box, compared to regular rigid glass or plastic bottles. Many established market players such as Smurfit Kappa Group plc, DS Smith plc, Amcor plc, Scholle IPN are providing ISTA 3A tested bag-in-box for the e-commerce supply chain.

How Are Established Players Consolidating Share in the Bag-in-Box Market?

There are many global players operating in the global bag-in-box market to cater their services to consumers. But Smurfit Kappa Group plc, DS Smith plc, Amcor plc, Scholle IPN and CDF Corporation are some the few leaders that are largely consolidating the market with their marketing strategies, and product innovations. Smurfit Kappa Group plc tops the list and estimated to continue the crown.

• In August 2020, Smurfit Kappa Bag-in-Box has launched a new “SmartLife” service to improve the shelf-life of boxed wines. SmartLife uses a combination of top class filling-performance diagnostics and practical training in order to identify opportunities for improvement within the supply chain that will ultimately increase the shelf-life of Bag-in-Box wines.
• In September 2020, Smurfit Kappa has seen volumes of its Vitop tap pass the five billion mark. The Vitop tap forms an integral part of the Smurfit Kappa Bag-in-Box range, a collection of sustainable packaging solutions for liquid and semi-liquid products.

Country-wise Insights

How Big Is the Opportunity in U.S.?

According to the report, the U.S. accounted for 20% of the global bag-in-box demand in the year 2020. Considering this, the U.S. is expected to generate increasing demand for bag-in-box over the forecast period. One of the key aspects supporting growth is that U.S. is that several leading alcoholic and nonalcoholic beverage manufacturing companies are located in the country.

E&J Gallo Winery, Constellation Brands, Bronco Wine Company, Molson Coors Beverage, National Beverage Corp. and many others have their bases in the U.S. which will play a significant role in fuelling the demand for bag-in-box. This create significant demand for bag-in-box products and opens new opportunities for players operating in the market.

Why Are Key PlayersInvesting in China Market?

According to FMI, China is the second largest consumer of bag-in-box packaging formats. This growth is anticipated to continue due to increasing production and sales of chemical products. As per European Chemical Industry Council – Ceficaisbl, China is the largest producer of chemicals in 2019.

As Europe is a leading and mature market for bag-in-box, many key players are aiming at capitalizing on opportunities present in the China market, on the back of increasing chemical production and trade activities. The report also estimates that the China bag-in-box market is expected to expandat a CAGR of 7.8%, during the forecast period.

Why is Italy at the Forefront of Bag-in-Box Sales for Wine Packaging?

Italy, France, Spain, U.S. and Argentina are the top five wine producing nations around the world. In 2019, Italy produced about 47.5 million hectoliters of wine.The country produces around one-quarter of wine consumed globally. There are over 500 grape variations planted across Italian vineries. This offers animpressive opportunities for bag-in-box packaging sales.

This market is expected to create incremental revenue opportunity of nearly US$ 100 Mn by the end of 2031. Increasing inclination towards large sized bag-in-boxfor wine packaging has been driving growth in the market. With the increasing wine trade activities in Italy, FMI predicts that the overall attractiveness of bag-in-boxmarket will improve in the near future.

How are Food Industries Shaping the Indian Market?

As per the research OECD-FAO AGRICULTURAL OUTLOOK 2018-2027 conducted by Food and Agriculture Organization, the consumption of fresh dairy products over meat is expected to cross 60 Mt by 2027, with nearly 2% growth rate per annum. This growth is anticipated as dairy products are the integral part of the diet in India. Per capita consumption of fresh dairy and skim milk is estimated to more than 22 Kg/Capita.

Changing dietary preferences among millennials and old age people are propelling demand for fresh dairy products. Besides this, the entry barriers for the new player is relatively less in the Indian market. Dairy products manufacturing industries in India are switching from traditional packaging to spill-proof and convenient packaging formats such as bag-in-box which ensures maximum quality and taste as well.

What are the Factors Affecting Bag-in-Box Sales in Australia?

In the past, the leftover of the wine that was not used for bottling, or the wine of inferior quality, was sold at a lower price in different types of packing products such boxes in the Australian market. Advancements in technologies, the apparent development of the quality of Italian and Spanish spirits and wines, and the increasing worry for sustainable alternatives have significantly increased the demand of bag-in-box.

Nowadays it is possible to find wonderful wines, very fresh in the Australia with bag-in-box packaging solutions. Besides this, the presence of prominent manufacturers of bag-in-box including Entapack Pty Ltd, DS Smith Rapak and others will drive growth in Australia.

Category-wise Insights

What’s the Market Share of Less Than 5 Liters Bag-in-Box?

The less than 5 litres capacity bag-in-boxisexpected to account for more than 1/4^thvalue share in the global bag-in-boxmarket and isanticipated to grow further by 350bps of present market stake during next decade. As per FMI, this growth is anticipated due to the rising demand for small capacity bag-in-box by individual users for end use products such as wine, olive oil, juices, water, tea, coffee, and various other alcoholic and nonalcoholic products. Such as small quantity of bag-in-box offers consumers ease in handling and comfort while pouring the liquid products in the end applications and gives them a bespoke feel.

Which is the Preferred Material for Manufacturing Bag-in-Boxes?

Sustainability and increasing piles of waste packaging are the prime concerns for key players and end users. Therefore, most of the key players are having emphasis on using green and sustainable practices to earn significant profits. As per FMI analysis, bag-in-box uses almost 80% less plastic than the rigid containers which results in less carbon impact.

Therefore, paper and paperboard is estimated to hold prominent market share over plastic. Bag-in-box contributes 91% less material to landfills than rigid pails and uses 20% less energy to produce compared to rigid packaging. Attributing to these benefits, bag-in-box are considered as green packaging solution. 

Why are Non-Alcoholic Beverages Gaining Traction?

Nowadays nonalcoholic beverages are gaining more traction from the bag-in-box packaging suppliers and fromend users whose product portfolio includewater, post-mix syrup, fruit juices, dairy & dairy alternatives, coffee & tea, energy drinks and others. Being the beverage sub-segment, the nonalcoholic beverages estimated to grab almost 30% of the market value share by the end of 2030.

Consumers’ find bag-in-box more convenient to use and its tailored designs attracts customers of all ages. It also offers precise dispensing system with minimal waste. Besides this, nonalcoholic beveragesneed superior product to packaging ratio which can be mostly fulfilled by bag-in-box than many rigid formats.

Who is the Leading End User of Bag-in-Box?

Beverage industry have emerged as leading end userfollowed by food industries. Bag-in-box has emerged as a superior packaging solution for beverages right from concentrated juice syrup, to water, tea and coffee, the perfect solution for any beverages.Bag-in-boxes are not only reliable, but are also created to cut waste, make ease in dispensing and ensure safe delivery and storage ofproducts.Due to these factorsthe beverage segmentis projected to witness a gain of nearly +320 bps of current value share, by the end of forecast period.

On the other hand, sales in the cosmetics & personal care segment is most likely to change by -150 bps by 2030 in comparison of value share in 2021. This is only due to manufactures are concentrating on the food, beverage and chemicals segments to gain the market share.

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Competitive Landscape

Some of the players are focusing to make recyclable products to maintain sustainability. For instance: Smurfit Kappa Group plcaddednew sustainable innovation by introducing novelVitop tap to its Bag-in-Box range.

Some of the leading companies operating in the market are:

• Smurfit Kappa Group plc
• DS Smith plc
• Amcor plc
• Liqui-Box
• Scholle IPN
• CDF Corporation
• Vine Valley Ventures LLC
• Parish Manufacturing Inc.
• TPS Rental Systems Ltd.
• Optopack Ltd.

*The list is not exhaustive, and only for representational purposes. Full competitive intelligence with SWOT analysis available in the report.

Scope of the Report

Key Questions Answered in the Report

• Which is the most lucrative market for bag-in-box?

  Europe currently leads the global market for bag-in-box.

• Which is the top-selling bag-in-boxby capacity?

  Less than 5 litres of bag-in-box are highly sought-after in the market.

• Why do end users prefer bag-in-box?

  Bag-in-boxis a lightweight alternative packaging solution for bulk containers which ensures ease in handling for larger volumes materials. The rising demand for flexible packaging will support growth in the market.

• Which are some of the leading companies offering bag-in-box?

  Some ofthe leading companies offering bag-in-box are, Smurfit Kappa Group plc, DS Smith plc, Amcor plc, Liqui-Box, Scholle IPN and among others.

• Who is the leading end user of bag-in-box?

  Beverages sector currently accounts for dominant share in the bag-in-box market, followed by the food industry.

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• Is this research conducted by Future Market Insights?

  Yes, the research has been conducted by expert analysts of Future Market Insights through a combination of primary research and secondary research. To know more about how the research was conducted, you can speak to research analyst

• What research methodology is followed by FMI?

  FMI follows a methodology that encompasses demand side assessment of the market, and triangulates the same through supply side analysis. This methodology is based on use of standard market structure, methods and definitions. Request detailed methodology

• Who are the respondents for primary research?

  FMI speaks to stakeholders across the spectrum, including C-level executives, distributors, product manufacturers, industry experts. For a full list of primary respondents, please reach out to us.

• What are the sources of secondary research?

  FMI conducts extensive secondary research through proprietary databases, paid databases, and information available in the public domain. We refer to industry associations, company press releases, annual reports, investor presentations, and research papers. More information about desk research is available upon request.

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Bag-in-box Market by Category

Capacity

• Less than 5 litres
• 5 - 10 litres
• 10 - 15 litres
• 15 - 20 litres
• More than 20 litres

Material

• Paper and Paperboard
• Plastic
  • LDPE
  • Ethylene Vinyl Acetate
  • Metallized-PET
  • Ethylene Vinyl Alcohol
  • Nylon
  • Others

End Use

• Food
  • Dairy Products
  • Sauces, Vinegar & Flavorings
  • Liquid Egg Products
• Beverages
  • Alcoholic Beverages
  • Non Alcoholic Beverages
  • Water
  • Others
• Chemicals
• Petroleum
• Home care
• Cosmetics & Personal Care

Region

• North America
• Latin America
• Europe
• South Asia
• East Asia
• Oceania
• Middle East and Africa (MEA)