Packaged Food Industry: Future Outlook
The projected CAGR for the packaged food market between 2015 and 2020 is 4.5%. In 2019, the market is estimated to grow by 3.5%. Between 2012 and 2017, the packaged food items that have seen the most growth include dairy products followed by baked goods, processed meats and seafood, confectionery, and savory snacks. Primary factors driving the growth of the packaged food market include modern or changing lifestyle, the convenience of consumption, and increased awareness about health. Some of the challenges in the market growth of the packaged food industry are because of food contamination and government regulations. Other challenges include the emergence of local brands, intense competition, and increased demand for high-quality products but at low cost. The packaged food markets in Asia-Pacific are expected to be the fastest growing markets.
How fast is the industry expected to grow (i.e., projected growth rate (CAGR))
- Based on a press release by Food Dive, 2019, the packaged food market is estimated to grow by 3.5% in 2019.
- The global packaged food market is expected to reach $3.03 trillion by 2020, growing at a CAGR of 4.5% between 2015 to 2020.
- The market value of the global packaged food industry was $2.47 trillion in 2016. It has been estimated that the market will reach $2.6 trillion by 2019.
- Using online CAGR calculator, we have calculated the CAGR value between 2016 and 2019 to be 1.72%.
- The US market for packaged food was valued at $377.5 billion in 2017, increased from $354.5 billion in 2013.
- Using online CAGR calculator, we have calculated the CAGR value between 2013 and 2017 to be 1.58%.
Therefore, it can be concluded that the growth rate in the packaged food market has increased from 2013 to 2019. The calculated CAGR between 2013 and 2017 is 1.58% and between 2016 and 2019 is 1.72%. However, in 2019, the market is estimated to grow at 3.5%. The projected CAGR between 2015 and 2020 is 4.5%.
Which areas and what products are expected to see the most growth
- The Allied Market Research report provided a market forecast for 2014-2020. The report revealed that among global regions, the packaged food markets in Asia-Pacific are expected to be the fastest growing markets.
- Based on Euromonitor report, between 2012 and 2017, the packaged food items that have seen the most growth include dairy products, baked goods, processed meats and seafood, confectionery, and savory snacks.
- Within the packaged food industry, the global market size for dairy products rose by more than 4.5% followed by baked goods with a 3.5% increase.
- Other products in the packaged food industry that grew the most include processed meats and seafood by 2.3%, confectionery by 1.8%, and savory snacks by 1.5%.
- Based on the retail value of packaged food items worldwide in 2016, dairy items have the highest value with $450 billion followed by baked goods $325 billion, processed meat and seafood $221 billion, confectionery $175 billion, savory snacks $140 billion, rice, pasta, and noodles $128 billion, and sauces, dressing, and condiments $114 billion.
- Other package food items with higher market value worldwide include ready meals $82 billion, sweet biscuits, snack bars, and fruit snacks $81 billion, edible oils $75 billion, ice cream and frozen desserts $70 billion, baby food $58 billion, processed fruit and vegetables $47 billion, breakfast cereals $23 billion, spreads $18 billion, and soup $11 billion.
What are some of the potential factors/market drivers/risks that may increase/decrease its demand in the nearest future
- Primary factors driving the growth of the packaged food market include modern or changing lifestyle, the convenience of consumption, and increased awareness about health.
- Also, the convenience is important for materials used for food packaging and it should be easy to carry, display, opening, and closing.
- According to the Allied Market Research report, some of the challenges in the market growth of the packaged food industry are because of "food contamination, government regulations, and the emergence of local brands."
- As their key strategy for market expansion, the top players in the packaged food market are focusing on mergers and partnerships.
- Kraft Foods has partnered with Heinz whereas, Tyson Foods has collaborated with Godrej foods in India for market expansion.
- Among global regions, the packaged food markets in Asia-Pacific is expected to be the fastest growing market. This is because of the "growing awareness and increasing adoption of packaged foods; thus, making it one of the lucrative markets for investments and expansions."
- Currently, the global packaged food market is "witnessing robust growth due to ongoing drive towards investments and plans for market expansion into developing countries."
- In 2019, the market growth will remain strong, mainly because of the "widening applications and strengthening buyer power."
- The rise in "imports and exports of packaged food along with increasing support sectors" are driving the market growth.
- Some of the challenges for the market growth of packaged food industry to 2025 include intense competition and increased demand for high-quality products but at low cost.
While searching through various market research reports such as Allied Market Research, Grand View Research, Transparency Research, Euromonitor, Statista, and others, we were able to find the growth rate of the packaged food market. Factors that drive the market growth, challenges or risks, and what products are expected to see the most growth were also found. However, these reports did not talk about the future market that what products are expected to see the most growth in the future. Most of the research reports were behind paywalls and only a portion of them was free to access. This could be possible that the desired information on the future market is available behind paywalls.
Moreover, we were able to gather a lot of the required information on the global packaged food market growth, some of the products that have shown an increase in growth, and other relevant details. In order to provide a comprehensive report, we have used some of the reports published in 2015 backed up with the latest reports published in 2018 and 2019. The Allied Market Research report provided the market forecast for 2014-2020 and revealed that the Asia Pacific is the fastest growing region for the packaged food market.
Next, we decided to look through the industry-specific reports such as Food Processing, Food Dive and others. Our idea was that the industry-specific reports may provide all the required details or future market. These reports also provided a lot of relevant details related to the growth of the packaged food market, potential factors/market drivers/risks that may increase/decrease its demand in the nearest future, and some of the packaged food items with the highest growth in the past. However, these sources also did not discuss the future market that what products are expected to see the most growth.
Our third approach was to search through media reports and press releases such as Business Today, Forbes, Business World, and others. We also looked through some of the major players of the industry such as Heinz, Kraft Foods, and others. Our idea was that these media reports or company press releases may provide the desired information on areas and what products are expected to see the most growth. But none of these reports provided the desired results. Most of the search results were either specific to the present market or talked about the previous year's revenue obtained from any specific packaged food item. Some of the search results were related to the packaging industry and not for packaged food.
Due to the limited availability of the publicly available information on areas and what products are expected to see the most growth in the packaged food industry, we have provided the information on the region (Asia Pacific) with most growth and assumed that the product categories that have seen most growth between 2012 and 2017, would be expected to see most growth in the industry.