In today’s hyperconnected, globalized world, trade and commerce in goods has achieved a new high. With it, the demand for stretch and shrink films, used primarily in packaging various stacked consumer goods, has seen a stellar growth. This growth is slated to continue in the near future too, albeit at a slightly subdued pace. This is because of stringent regulatory norms, especially pertaining to packaging of food materials and changing raw material prices, alongside uncertainties in the natural gas and petroleum market.
The sales revenue in the global market for stretch and shrink, is predicted to exhibit a steady CAGR of 5.2% between 2015 and 2024. The market, which was worth a whopping US$14.1 bn in 2015, is predicted to reach a value of US$21.1 bn by 2024.
Food and Beverages Industry Primarily Triggering Growth
Stretch and shrink films find application in packaging different types of goods, including beverages, material goods, consumer products, food, industrial/bulk products, and pharmaceuticals. The global market for stretch and shrink films has mainly progressed due to the widespread use of light-weight shrink labels and hoods in the food and beverage industry. They are the preferred packaging material due to their customizability, strength, and ability to survive varying temperature differences. This has also led the shrink films segment to outdo the stretch films segment in the market by an impressive margin.
Further, spiking sale of retail items along with e-commerce sales is also driving growth in the packaging industry, thereby positively impacting the global stretch and shrink films market.
Substitutes Pose a Threat to the Market
The global stretch and shrink films market has experienced phenomenal growth so far on account of the low density polyethylene (LDPE) material segment. Its market, however, will lose some of its steam in the near future due to competition from other types of packaging materials, namely PVC, polypropylene, and linear low density polyethylene (LLDPE).
Besides, the food and beverages industry which is currently propelling the market, is expected to shed some of its market share through 2024, owing to the mature nature of the industry.
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Highly Saturated Europe and North America Markets to Lose Sheen
Dominant markets of Europe and North America have reached a saturation point. This would likely slow down their growth significantly in the forecast period from 2015 to 2024. Up-and-coming Asia Pacific (APAC) market, which is predicted to clock maximum growth in the period, is poised to take their place by 2024. Asia Pacific will outpace mainly because of high investment and growth in the manufacturing sector in the region. Besides, speedy urbanization and rising disposal income, would also drive demand in the region.
Another big draw in the region is the low operating costs and resources. Sensing an opportunity, key players in the developed stretch and shrink films markets in North America and Europe, are already devising strategies to tap into the APAC market to significantly improve their revenue.