Report

The Latin American flexible packaging market is expected to register a CAGR of 3.89% during the forecast period (2022-2027).? With the recent outbreak of COVID-19, flexible packaging manufacturers have been flooded with a pool of issues that are expected to be only for the short term. Some of the effects of lockdown include supply chain disruptions, lack of availability of raw materials used in the manufacturing process, labor shortages, fluctuating prices that could cause the production of the final product to inflate and go beyond budget, shipping problems, etc.?

Key Highlights
According to the Brazilian government, in 2021, the retail sales in the packaged food market in Brazil reached USD 116.6 billion, a growth rate of 32.2% since 2016. The high growth rates include ready meals, breakfast cereals, baby food, sauces, dressings and condiments, processed meat, and seafood and soup.
Several market players are establishing collaborations and partnerships to drive better additional revenues due to the increasing demand. For instance, in 2020, Amcor announced its partnership with Moda vacuum packaging systems in North America and Latin America. This partnership combines Amcor's shrink bag and roll stock film for meat barrier films, and its polyvinyl chloride ("PVC") films include a broad array of PVC meat films used primarily to wrap fresh meats, especially poultry.
Argentina's packaging industry faced a difficult phase during the economic crisis that escalated with the pandemic. The purchasing power of low-income and middle-income social groups reduced drastically, curbing any innovation and premium packaging opportunities. Argentina witnessed a sharp fall in wages, rising unemployment, and a decline in consumption habits, affecting packaging types and sizes across different categories.
Since the last decade, awareness among the population regarding the harmful effects of plastic usage has been growing drastically. Many public campaigns and initiatives by the Latin American governments have increased awareness among the public. Thus, plastic packaging consumption witnessed a significant impact in the past few years. ?


Latin America Flexible Packaging Market Trends

Pouches are Expected to Grow Significantly


Pouches can be broadly classified into stand-up and flat pouches and are extensively used across Europe. Stand-up pouches include various types of retort pouches, bottom gusset pouches, flat bottom pouches, side gusset pouches, spouted pouches, and shaped pouches. Flat pouches can be further classified into pillow pouches, four side seal pouches, three side seal pouches, and vacuum pouches.?
The durability and convenience of logistics for products packaged in pouches drive the studied market's demand. The pouches' cost-effectiveness is helping manufacturers opt for pouch packaging, driving the growth of this flexible packaging format. The lightweight nature of the structure drives the adoption of pouches compared to other traditional packaging formats like PET bottles.?
There is also an extensive demand for kraft paper in wrapping, pouches, and sacks. The increasing trend for eco-friendly packaging is creating a demand for kraft papers that can be easily recycled, as their pulping process allows easy waste recovery.?Similarly, in 2020, TC transcontinental, Montreal-based packaging manufacturer, with a presence in the United States and Latin America, announced plans on increasing post-consumer, recycled content in flexible packaging offerings such as pouches. It has also begun investments in allied equipment to convert flexible plastics from sorting facilities and other sources.?
In May 2021, Amcor introduced recycled plastic packaging for powdered chocolate in Latin America, a more sustainable packaging than the previous packaging. This new solution reduces the package's carbon footprint by 53% and water consumption by 84% when recycled. The new sachet has a high-barrier feature to protect against humidity and will be available to consumers in Colombia's 25g sachet format this month.
Pouches are one of the most significantly used materials for packaging e-commerce products. Pouches are becoming the most common format of flexible packaging in the food, beverage, personal care, and pharmaceutical industries that cater to most products in the e-commerce markets. Players operating in the e-commerce sector opt for pouch packaging, as it is one of the most efficient and economical packaging solutions. Latin America e-commerce retail sales grew at 19.4% (approximately) in 2020.


Brazil is Expected to Hold Significant Market Share


Brazil is one of the leading countries in Latin America in terms of economic growth and high FDI. It has a huge demand for food and industrial goods, which are catered by imports. Flexible packaging will be necessary for this area to protect the products from getting damaged. With the middle-income class percentage increasing, demand for packed food is likely to increase, enabling the flexible packaging market to grow.
Despite the pandemic and related uncertainties, the Brazilian personal hygiene, perfume, and cosmetics sector closed in 2020 with a 5.8% growth, according to the index of the Brazilian Association of the personal hygiene, perfumery, and cosmetics industry (ABIHPEC). The personal care category revenue reached USD 12.77 billion (approximately), and it was further expected to grow by 7.5% in 2021.
In 2020, Brazilian converter of flexible packaging Pamplastic Industria de Embalagens Plasticas increased its business by purchasing a Comexi F2 MB flexographic press. The company currently serves the monolayer packaging market, including technical films, bakery packaging, line refrigeration, and textile packaging.
In October 2021, Gualapack SpA was expanding in Brazil as part of the group's ongoing efforts to achieve sustainable, worldwide growth through vertical integration. With the acquisition of Teruel Embalagens - Papeis Amalia Ltda, Gualapack continues to make significant investments in this part of the world. Teruel is a classic family firm with 50 years of experience, having two plants in Brazil specializing in flexographic printing on flexible film.
There is a trend supporting premiumization in this market. Despite being price-sensitive, Brazilians are willing to spend on cosmetics. This caters to the demand for flexible packaging, as flexible plastic materials, such as polyamine and polypropylene, provide packages with outstanding visibility and appealing structure, along with safety features.


Latin America Flexible Packaging Market Competitor Analysis

The Latin American flexible packaging market comprises several global and regional players and is moderately consolidated. As the market poses low barriers to entry for the new players, several new entrants have been able to gain traction. This market is characterized by low product differentiation, growing levels of product penetration, and high levels of competition. Sustainable competitive advantage can be gained through design, technology, and application innovation.


September 2021: EMSUR launched EM-Full RFlex, its new PE and PP-based flexible packaging range. This solution aims to improve recyclability and improve food preservation, thanks to its barrier properties. The different structures in this type of laminate aim to respond to the needs of FMCG customers who require packaging solutions for bags or Doypacks with mono-material compositions and barrier properties for a range of product categories, including snacks, confectionery, etc.
September 2021: Constantia Flexibles achieved up to 80% recycled content in a PE film using EcoLam laminates' waste in an industrial recycling trial of EcoLam laminates. Further examinations showed that the type of adhesive and the type of printing inks used significantly influence the quality of recyclable material. It is under further investigation whether printed laminates can also be reused in food applications with suitable adhesives and inks.


Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support