Global Middle Classes Demand Paperboard

9/17/2014

Since the turn of the century, the rapidly developing BRIC nations of Brazil, Russia, India, and China have taken on larger roles in the global marketplace. As these countries have grown, so too have their middle classes. And with newfound disposable income, consumers in the BRIC nations are eager to spend. China and India lead the way, with middle class spending in China predicted to surpass that of the U.S. by 2020.  

As developing middle classes push up the demand for consumer goods, demand for packaging also increases. Here are some trends that will help you traverse this new market.

Interest in Sustainability
According to a recent study, around 60% of consumers in Asia, Latin America, the Middle East, and Africa reported that they want to buy sustainable or socially responsible brands, compared to only 40% of their North American and European counterparts. Since paperboard is a naturally recyclable, renewable substrate, this trend certainly bodes well for our industry.

Convenience in Food Packaging
Middle class consumers in developing countries are working more than ever before. With less time to plan and cook meals, they are today seeking small, convenient food packaging so they can enjoy their meals “on the go.” As purchases of bulk, unpackaged foodstuffs continue to decline in these developing markets, board converters and food package designers can best accommodate global consumers by “thinking small.”

Increased Beauty, Health, and Personal Care Spending
As disposable income increases, so does spending on beauty and personal care products. In fact, through 2025, personal care spending in China and India is predicted to increase 9.3% and 7.4% respectively. Converters and CPGs should take advantage of these developing beauty markets when considering how best to expand their business.

Lower Pricing
With the memories of a less prosperous past still very much alive, some BRIC consumers are reluctant to spend more for premium brands. Thus, some firms may enter the BRIC market with a lower price point than in the more developed markets. This reduction in price may translate into constraints on packaging budgets, so converters should consider cost-effective ways to convey sustainability, prestige, etc. For example, a holographic coating on plain board could be used instead of more expensive holographic board. 

Transportation Troubles
Transporting goods to middle class consumers in the BRIC nations has been a challenge, as many developing countries lack adequate infrastructure in terms of roads, bridges, rail lines, waterways, or vehicles. Luckily, paperboard is a relatively lightweight packaging solution that makes shipping easier and often more economical to transport than alternative substrates such as glass or aluminum.

By fueling the global middle class demand for consumer goods, developing nations will present the paperboard packaging industry with unique challenges in the coming decades. Taking advantage of the opportunities while finding ways to successfully overcome obstacles will be key to growing the paperboard packaging industry in North America. These developing markets are here to stay and will likely become even more influential in the future. As for preparing to meet the demands of these new markets, there’s no time like the present!

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