P&S Intelligence projects that the tobacco packaging market will grow with a 3.7% CAGR between 2020-2030 as a result of the changing lifestyle, the usage of smokeless tobacco, cigars, shishas, dried tobacco, and other premium tobacco products.
Another important factor behind the rising demand for such products is the surging disposable income. Moreover, such products are readily available on e-commerce platforms and at retail stores.
Thus, owing to the growing popularity of premium tobacco products, the requirement for attractive packaging, such as zipper pouches and metal and wooden cases, is also escalating. The packaging not only makes the products look good but also increases their shelf life and protects them against aroma loss.
Currently, the paper category dominates the market, as it is the material of choice for packaging cigarettes, which are the most popular tobacco-containing products around the globe. In 2019, around six trillion cigarette sticks were produced, which were used by around one billion smokers, as per the World Health Organization (WHO). This is why the demand for paperboards and paper has increased for cigarette packaging purposes. Moreover, paper is also popular as a packaging material for other tobacco products, as it is environment friendly.
The secondary packaging bifurcation would continue holding larger share in the tobacco packaging market till 2030. This is attributed to the economic feasibility and ability of this type of packaging to protect the products against damages till reaching the customer. In addition, trays, corrugated boxes, cartons, and other kinds of secondary packaging help in the mass shipment of tobacco and related products to the point of sale (POS) or end-consumer, by keeping the individual units together.
Historically, Asia-Pacific was the largest consumer of tobacco packaging materials, and the region is also predicted to experience the highest CAGR, of 3.9%, in the market during 2020–2030. This would be because China is the largest user as well as producer of cigarettes in the world. Almost one-third, or 300 million, tobacco smokers around the world in 2019 resided in China alone, according to the estimates of WHO. Similarly, China National Tobacco Corporation manufactures around a third of the cigarettes produced on earth. To cater to the increasing demand for tobacco products in the country, the packaging niche is undergoing rapid technological enhancements. In addition, in Japan, South Korea, India, and Thailand the middle class is witnessing an increment in its disposable income, which is leading to the rising demand for tobacco products here. Therefore, with increasing production, the consumption of packaging materials, including wooden boxes, paper and paperboards, and cans, is also growing sharply in the region.