Returnable Packaging Market Analysis Report By Material, By Product, By End-use And Segment Forecasts From 2020 To 2027

Industry Insights

The global returnable packaging market size was worth USD 30.5 billion in 2019. The market is anticipated to register 5.4% CAGR over the forecast years, 2020 to 2027. The demand for durable and sustainable packaging has surged from end-use industries in the recent past, which in turn, is driving the growth of the market. Returnable packaging is made up of metal, plastic, and wood, and they are durable. This packaging solution are designed in a way so that they can withstand rough handling and can be used for multiple trips. Compared to expendable packaging, returnable or reusable packaging incurs a high initial cost. However, with the increasing trips, its cost reduces.

Due to the increasing demand for several end-use industries, the United States is projected to register considerable growth over the forecast duration. Leading end-use industries such as automotive, food & beverages, and pharmaceuticals are adopting sustainable business approaches, thereby, likely to drive the market growth.

Factors such as sustainability, ergonomics, and economic benefits attract a large number of end-use industries towards returnable packaging. With the increase in the number of trips, lower costs can be achieved. Moreover, unlike expendable packaging, reusable packaging does not require disposing of. Therefore, returnable packaging reduces packaging costs. Increasing penetration of sustainable packaging is also attributed to companies’ quest to improve brand awareness and pressure from regulatory agencies.

However, due to their frequent return, the cost of transportation becomes higher. In addition, this packaging requires periodic maintenance and storage space. Moreover, incidents such as misplaced and theft have been also observed. Therefore, this packaging requires continuous tracking, which further increases the handing cost. All these above mentioned factors are estimated to restrain the returnable packaging market growth from 2020 to 2027.

Material Insights

Based on material, plastic held the highest share of over 63.0% in 2019. Polypropylene (PP) and High-Density Polyethylene (HDPE) plastics are mostly used for crates, pallets, drums, and IBCs manufacturing. Factors such as low weight, durability, and corrosion resistance features drive the plastic demand. In addition, plastic-made returnable packaging is capable of withstanding rough handling. Food and pharmaceuticals are the major end-use industry of plastic-based packaging.

On the other hand, the metal segment is projected to register the highest growth over the forecast duration. Metals exhibit higher strength and sustainability characteristics than plastic. However, metal-based packaging is heavier than plastic, which is estimated to restrain their growth.

Wood is widely used to make pallets. Easy availability and low cost of wood-based pallets are the major factors leading to their increased adoption. However, plastic-based pallets are easy to clean and durable. Further, they are aesthetically appealing and require low maintenance. Therefore, plastic pallets are estimated to limit the growth of the wood-based pallet.

Product Insights

In 2019, the pallets segment accounted for over 30.0% share in the returnable packaging market. Increasing use of pallets from several end-use industries such as food and beverages, petroleum, and lubricants are driving its demand. End-use industries are increasingly focusing on using sustainable pallets than expendable ones. This factor is estimated to bode well for the growth of the market.

Dunnage, on the other hand, offers 360-degree protection during shipping. Dunnage is placed inside the container to ensure safe packaging. It plays a crucial role in transporting fragile and high-value products from electronics and the automotive industry.

Intermediate Bulk Containers (IBCs) are estimated to register the maximum growth over the forecast duration. IBCs are extensively used in the pharmaceuticals, and food & beverages industries. It is mostly used in the handling of powdered and liquid products. The rise in the demand for cost-effective liquid transportation from several end-use industries is driving the segment growth.

End-use Insights

In 2019, the food & beverage segment accounted for the highest share in the market and held a 35.0% share. Increasing demand for packaging of bakery, meat, dairy, semi-processed, and agriculture products is driving the segment growth. The growing processed food industry further provides a lucrative opportunity for segment growth. On the other hand, the automotive industry uses returnable packaging to transport their finished or semi-finished products. Frequent transportation of high-volume and heavy auto parts requires durable and effective packaging.

The growing automotive industry due to the rising income of the middle-class population is estimated to drive the market in the Asia Pacific. Healthcare end-use segment is anticipated to register the maximum growth over the forecast years. The increasing prevalence of chronic disease and rise in the aging population is supplementing the pharmaceutical industry, which is estimated to bode well for the segment growth.

Regional Insights

In 2019, Asia Pacific accounted for more than 36.0% share in the global returnable packaging market. Further, the region is estimated to register the highest growth over the forecast duration. The rise in the number of manufacturing units in countries such as India, China, Vietnam, and Indonesia is driving regional growth. In addition, rapid industrialization owing to cost-effective manufacturing is estimated to propel regional growth.

North America held the second-largest share in the market in 2019. Further, the region is predicted to witness significant growth during the forecast years. Supportive trade agreements like USMCA are anticipated to drive the manufacturing activities in countries such as Canada, Mexico, and the United States, which in turn, are estimated to proliferate the demand for returnable packaging. MEA region is anticipated to register noticeable growth due to changing focus towards manufacturing industry from the oil industry.

COVID-19 Impact Analysis

The market has been adversely affected owing to the outbreak of COVID-19. The pandemic has led to the closure of various end-use industries and non-essential products have witnessed a major dip in their sales. Apart from food & beverages and pharmaceuticals industries, other industries such as automotive, oil & gas, and consumer electronics have witnessed considerably lower demand during the second and third quarters of 2020. Plastic packaging has witnessed an increase in its adoption as it helps in stopping the disease spread apart from being durable and cost-effective.

Returnable Packaging Market Share Insights

The market is moderately fragmented in nature due to the presence of several medium and large-sized companies. Companies are offering pallet-renting programs for end-use industries. In pallet renting, companies themselves deliver, track and collect pallets. By renting pallets, end-use industries reduced the material handling cost. Major companies are aiming to strengthen their market position by mergers & acquisitions. In addition, the demand for tracking devices like RFID tags has increased over the past few years. Some of the major market players operating in the market are Nefab Group, Amatech, Inc., Celina Industries, CHEP, ORBIS Corp., and Integra Packaging among others.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels, and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For this study, Million Insights has segmented the global returnable packaging market report based on material, product, end-use, and region:

• Material Outlook (Revenue, USD Million, 2016 - 2027)
    • Plastic
    • Metal
    • Wood

• Product Outlook (Revenue, USD Million, 2016 - 2027)
    • Pallets
    • Crates
    • IBCs
    • Drums & Barrels
    • Dunnage
    • Others

• End-use Outlook (Revenue, USD Million, 2016 - 2027)
    • Food & beverages
    • Automotive
    • Consumer durables
    • Healthcare
    • Others

• Regional Outlook (Revenue, USD Million, 2016 - 2027)
    • North America
        • U.S.
        • Canada
        • Mexico
    • Europe
        • Germany
        • U.K.
        • France
        • Italy
        • Spain
    • The Asia Pacific
        • China
        • India
        • Japan
        • South Korea
        • Australia
    • Central & South America
        • Brazil
    • Middle East & Africa
        • South Africa