The aluminum foil market is expected to grow at a CAGR of 5% during the forecast period. Increased use of packaged food products, drivers.2, and drivers.3 are some of the significant factors fueling aluminum foil market growth.
Increased use of packaged food products
Rising popularity of lightweight packaging
The focus on R&D activities for developing new lightweight packaging to reduce wastage and enhance end-user usability is gaining momentum. Lightweight packaging, such as aluminum foil packaging, is both cost-effective and recyclable in nature. For instance, glass packaging solutions are heavy, and it is cumbersome to transport products packed in glass packages, which increases the cost of production and bottling. Therefore, goods manufacturers are moving toward the adoption of lightweight plastic packaging. The growing popularity and demand for this kind of material are having a positive impact on the overall demand for aluminum foil packaging.
The demand for lightweight materials for packing food and beverage and personal care products is one of the major trends in the market. Vendors are coming up with lightweight and high-performance aluminum foil grades to reduce costs, improve performance, and stay compliant with regulations. Nowadays, aluminum foil manufacturers are focusing on downgauging aluminum foils to decrease the overall weight of the aluminum foil per unit volume. This will also help in reducing the aluminum foil production cost of manufacturers. Furthermore, lightweight packaging products reduce transportation costs, improve shipping efficiency, and increase company profitability targets. Lower material consumption during the manufacturing process also reduces the environmental impact during the entire process.
The food and beverage packaging industry is witnessing many innovations. The growing demand for lightweight materials in food and beverage packaging to save transportation and storage space and costs is a crucial trend that is expected to affect the market. Aluminum foil is highly lightweight and exhibits strong barrier efficiency against gases, light, volatile compounds, water vapor, and oils and fats. The high strength-to-weight ratio of aluminum foil further increases its adoption in various end-user industries. Hence, the global trend in the adoption of lightweight packaging is driving the demand for aluminum foil.
Growing consumption of secondary aluminum
Globally, scraped aluminum is increasingly used to reduce the manufacturing cost and carbon footprint of the aluminum industry. Aluminum is known for its high recyclability. Secondary aluminum is produced from recycled aluminum obtained from the end of life aluminum products. Recycling aluminum is an environment-friendly process, and it requires very less energy when compared to primary aluminum. The recycling of aluminum scrap improves the industry's economic viability and minimizes the environmental impact by reducing the need to extract bauxite for aluminum production. This significantly reduces CO2 emissions, minimizes energy and water consumption, and lowers air pollution.
Therefore, secondary aluminum has become the preferred raw material choice for aluminum foil producers. Primary aluminum and secondary aluminum can be used alone or in combination with other raw materials for the preparation of aluminum foil products, depending on the application. Aluminum foil manufacturers are increasingly using recycled aluminum to produce aluminum foil. For instance, Reynolds Group Holdings Ltd. (Reynolds Group Holdings) offers FOIL FROM 100% RECYCLED ALUMINUM.
Owing to an increase in electricity and energy costs, manufacturers started using secondary aluminum as the major raw material to decrease their overall cost of production. Moreover, concerns regarding global warming are also driving the use of secondary aluminum to produce aluminum foil products.
Increasing adoption of sustainable packaging
The global demand for paper-based food contact materials is increasing rapidly due to their eco-friendliness in comparison to plastic and aluminum products. Hence, the environmental concerns linked with these substitutes propel the application of sustainable paper packaging products in the food and beverage industry. Aluminum and plastic products generate more waste per product when compared to traditional paper products. For instance, the degrading time for aluminum can be even more than 100 years. Paper boxes, which are essentially made from highly durable paper, are environment-friendly and sustainable packaging solutions. High recyclability and sustainable properties of food contact paper also increase its preference. Food contact paper products that are made from recycled materials reduce the cost of packaging and increase environmental sustainability.
Many food and beverage manufacturers are focusing on the application of compostable, reusable, and recyclable packaging materials due to the rising number of global issues, such as the growing amount of ocean waste. A varied range of food contact paper products, which are manufactured by mixing both virgin and recycled fibers, are present in the market. These products are highly recyclable and are some of the prime examples of environment-friendly packaging solutions. Most of the raw materials used in the manufacturing of food contact paper products are sourced from recycled materials and trees growing in sustainable forests. A sustainable forest is a controlled forest environment wherein the number of trees felled are aptly compensated by seedlings that eventually grow into trees. Many of these products are recycled more than five times, which increases their sustainability. Products that are rendered nonrecyclable are generally easily biodegradable and compostable. This increases the sustainability of these paper packaging products. Therefore, the need for environment-friendly packaging solutions is expected to negatively impact the global aluminum foil market during the forecast period.
