Market Players Tapping Opportunities within Horticulture Landscape

There is growing demand for punnet packaging in the fresh horticulture produce landscape. The global rigid packaging market is currently valued at ~US$ 597 billion (2018), and is anticipated to grow at a steady CAGR of ~3% during the forecast period. As such, manufacturers are increasing their focus to offer rigid packaging solutions in the horticulture space.

Likewise, the demand for punnet packaging has increased in horticulture as the produce has a much shorter shelf life as compared to agricultural produce. That is why, crop growers in the horticulture landscape are demanding efficacious punnet packaging solutions to reduce food wastage.

The production of plastic punnet packaging is estimated to reach ~11 billion units in the year 2027; accounting for the highest volume amongst all materials. Since plastic is a convenient raw material, manufacturers are introducing punnets made from r-PET (recycled polyethylene terephthalate) films that help them comply with the global standards for packaging materials. R-PET punnets serve as a safe option for efficient food storage and meet the regulatory requirements for product safety.

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Winning Imperatives: Experimentation with Compostable Materials

Due to the growing awareness about sustainability amongst consumers, manufacturers in the punnet packaging space are competing to provide innovative trays and containers that contribute towards a circular economy. According to the survey by Transparency Market Research (TMR) on consumer sentiment analysis, it was found that, ~65% of the respondents have an affirmative opinion toward the purchase non-plastic punnets. As such, manufacturers are introducing low-cost punnets that are manufactured from fiber-based materials, and can also be recycled. For this, manufacturers are developing one-of-its kind, compostable strawberry punnets. In order to contribute towards sustainability, they are adopting environmental-friendly operational practices to offer novel punnet packaging solutions.

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Since non-plastic punnet packaging serves as a cost-efficient solution, manufacturers are also experimenting with wooden punnets that are covered with a compostable top-seal. The integration of complex processes with latest technology has helped manufacturers develop punnets made from dried tomato leaves and recycled cardboard pulp. For instance, in January 2019, Waitrose & Partners – a chain of British supermarkets, announced a collaboration with DS Smith – a British international packaging company, to launch first-of-its kind cardboard grape punnets in the U.K.

Sustainable Solutions and Profile-cut Heat Sealing Add Convenience to Punnets

The punnet packaging landscape is highly scattered, which creates scope for incremental opportunities for emerging market players. However, strict regulations by government institutions to ensure product safety have created a virtual barrier for manufacturers to invest in licensing. For instance, according to the new packaging regulations implemented by FSSAI (Food Safety and Standards Authority of India) in 2018, it is mandatory for manufacturers to use high-quality polyethylene terephthalate (PET) and polypropylene (PP) punnets for fruit and vegetable products, and thermoformed trays with a lid for sweets and confectionaries. As such, manufacturers are turning towards sustainable punnet packaging solutions to avoid expensive licensing costs.

Manufacturers are reinventing strawberry marketing by modifying traditional strawberry punnets. However, the heat sealed packaging acts as a disadvantage to consumers who wish to reseal the container. Therefore, manufacturers are investing in profile-cut heat sealing machines that provide the option of a seal foil to reseal the containers.

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Punnet Packaging Market: Non-plastic Punnet Packaging to be the Next Frontier 

  • According to Transparency Market Research’s latest market report on the punnet packaging market for the historical period of 2014-2018 and forecast period of 2019-2027, the rising demand for packaged fruits and need for cost-effective packaging to ensure minimum inventory and warehouse costs are projected to drive the growth of the punnet packaging market.
  • Globally, revenue generated by the punnet packaging market has been estimated to be ~US$ 790 Mn in 2019, and is projected to expand at a CAGR of ~5% in terms of value during the forecast period. 

Punnet Packaging as Medium to Ensure Minimum Inventory and Warehouse Costs

  • Punnet packaging is considered as a cost-effective medium for packaging due to its low disposal cost, minimum inventory and warehousing costs, and easy packaging process. Moreover, punnets are easily stackable in nature, answering the problem of space complexity. Besides, the usage of punnets with a bubble wrap reduces damage during transportation and eliminates chances of the crushing and bruising of fruits.
  • Punnet packaging is protective and has a point of display. It provides a clear peek at what lies inside the package. This attracts consumers and eases their purchase decisions. Thus, emphasis on aesthetics is expected to give momentum to the global punnet packaging market in the foreseeable future.

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Printed Punnets – Key to Product Differentiation

  • It is important that relevant consumer information such as date of packaging, date of expiration, etc., are included in the internal package, as these are the packages that reach the final consumers. Thus, punnet packaging manufacturers are providing printing and labelling on the flat surfaces of punnets.
  • Stick-on labels are most commonly put on each punnet, while other labels can also be used depending upon the brand owner’s preferences. Moreover, this is also an economical tool for the branding and marketing of products. The use of such tools helps in product differentiation, which directly impacts the shelf visibility of the product. Higher shelf visibility translates into increased sales and profitability for brand owners.

Global Punnet Packaging Market – Key Findings

  • Among various materials, the plastic segment is expected to heavily dominate the global punnet packaging market, and is estimated to account for ~85% of the market share by the end of 2019. Plastic punnets are most prominently used as they provide superior barrier and appealing aesthetics to the packaging. Furthermore, polypropylene (PP) holds ~ ⅓ share of the plastic punnet packaging market, followed by PET.
    • This preference for PP and PET is expected to sustain due to their rigid physical structures, which offers protection from mechanical damage and contamination during the handling, transportation, and marketing of soft fruits.
  • The 300 – 500 gm segment in the punnet packaging market accounts for a majority of the market share, in terms of value. It is used as most retail chains sell berries and other soft fruits in 400 gm punnets, while leafy vegetables are stored in up to 150 gm punnets. The 300 – 500 gm segment of the global punnet packaging market is projected to expand ~1.3X its current value, and is likely to create an incremental opportunity of ~ US$ 70 Mn in the next five years.
  • Among the product types, the with lid segment holds ~65% of the global punnet packaging market. This can be attributed to the application of punnet packaging in the transportation of soft fruits. The use of punnets ensures that the fruits are not crushed or squashed during transit.

Paper & Molded Fiber Punnet Packaging to Gain Traction

  • Currently, plastic punnets are commonly used to pack fresh produce. However, leading manufacturers such as Smurfit Kappa, LC Packaging International BV, and others have started offering paper-based punnet packaging.
  • Paper-based and molded fiber punnet packaging cumulatively account for ~14% of the global market. However, this share is projected to rise significantly in the next five years, particularly in European countries where stringency against plastic usage is prominent. As sustainable packaging solutions are gaining ground, non-plastic punnet packaging is expected to be the next frontier in the produce packaging market.

Global Punnet Packaging Market – Competition Landscape

  • Some of the key players operating in the global punnet packaging market are:
    • Coveris Holdings SA
    • Smurfit Kappa Group Plc.
    • LC Packaging International BV
    • Groupe Guillin SA
    • Paccor Netherlands BV
    • Leeways Packaging Services Ltd.
    • Tacca Industries Pty Ltd.
    • Raptis Pax Pty Ltd.
    • Infia S.r.l.
    • Quinn Packaging Ltd.
    • AVI Global Plast Private Limited
    • Royal Interpack Group
    • Alta Global Inc.
    • Ilip S.r.l.
    • T&B Containers Ltd.
  • Coveris Holdings SA, Smurfit Kappa Group Plc, Infia S.r.l., and Groupe Guillin SA have been identified as tier 1 players operating in the global punnet packaging market. However, several other players are emerging as prominent regional players, such as LC Packaging International BV, Quinn Packaging Ltd., Raptis Pax Pty Ltd., and others. Thus, the bargaining power of suppliers is likely to be low in the punnet packaging market. More small-scale unorganized players are expected to contribute to the global punnet packaging market during the period of forecast, and make it even more competitive.

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