By: Vishal Wankhede, Adroit Market Research
Michael Owens pioneered the revolution of the glass making industry around 1890’s by building a mold opening device that could be operated by foot. This invention was a stepping stone as it eliminated the need of more workers and also lowered the cost of bulbs by more than 80 percent, making bulbs more affordable. The step of revolution went further ahead when Owens came up with automated bottling machine around 1899. He then developed improved versions of automated machines that could manufacture a greater number of bottles per hour.
Starting with Inflating molten glass bubble in the past to automated glass bottles with different colors and embossing at present, glass packaging industry has seen a huge transformation. Glass packaging industry is reportedly thriving owing to demand for sustainable packaging solutions. Though consumer taste and preferences are shifting, consumers still see glass as a material best for taste and eco-friendly packaging solution. As the packaging industry today is more consumer driven, as per EcoFocus Worldwide survey of packaging preference, nearly 55 percent of the consumer’s ranked glass as first choice for packaging followed by cans at 30 percent and plastic bottles at 20 percent.
FMCG sector is the single largest consumer of glass packaging solutions. As per Adroit Market Research, the global FMCG packaging market was estimated to generate $703.08 billion in the year 2017. The market is estimated to exceed $900 billion by 2025, growing at a compound annual growth rate (CAGR) of more than 4 percent. Increase in the glass containers import-export trade across potential economies, such as India, China, U.S., Turkey, Poland, Brazil and Argentina are likely to aid in the growth of the global glass packaging industry. Furthermore, emerging countries are expected to grow faster than the average rate of GDP growth and will create ample opportunities for glass material suppliers and converters.
Two of the largest consumers of FMCG products in the world China and India. According to the report, the two countries present the most lucrative scenario for growth of the glass packaging industry. China is the largest producer of container glass and with more than 800 converters present in the country, China holds a strong global position in this industry. Furthermore, vast untapped market coupled with increasing millennial population is the key driver for the growth of the Indian container glass market. By 2020 India is estimated to be the country with highest millennial population. This is expected to cause an increase in the demand for alcoholic and non-alcoholic beverages. BRIC countries (Brazil, Russia, India, and China) are valued as the emerging market in the global container glass industry. Asian countries, such as Thailand, India and China are witnessing accented attention from buyers for market expansion.
North America and Europe container glass market is consolidated and top three to four players account for a major market share of about 50-60 percent. Fast growing markets, such as Canada, Mexico, Poland, Turkey and France are also likely to showcase same level of market consolidation. In contrast, increasing imports of container glass bottles from China and Mexico is impacting the U.S. container glass industry. As per financial release of Ardagh Group S.A., U.S. has added importation tariff on Chinese manufactured container glass. Chinese manufacturers are estimating reduction in freight and logistics cost across America’s glass network to counter balance the imposed tariff.
Increase in the usage of cullet to reduce the energy consumption and production cost is one of the key trend that is transforming container glass industry. Recycled glass is cheaper and utilizes nearly 30 percent less energy in comparison to virgin glass. Nearly 80 percent of the recovered glass is turned into new bottles and green packaging initiatives by government of various regions is likely to increase percent of recovered glass, hence, boosting the demand of glass cullet. Reduction in the weight of container glass bottles by 30 percent while maintaining its strength is another improvement which has helped keep the logistics costs down.
Container glass market is likely to show significant growth over the next five years. On the other hand, alternative packaging solutions, such as plastic, metal, paper, and wood are projected to be the key barrier for container glass industry. Maturing consumption of beer in the west is estimated to be offset by increasing popularity of the beverage in emerging economies, such as India and China. Declining shares of container glass in alcoholic beverage and non-alcoholic beverage is estimated to be counterpoised by pharmaceutical and cosmetic industry. Over the counter products (OTC) and specialty products are the key segment driving the pharmaceutical and cosmetic industry, respectively. Furthermore, ampoules and vials require glass packaging to maintain its inertness as per strict guidelines from pharmaceutical regulatory authorities. These are some of the products driving the demand of glass containers within the pharmaceutical industry. As per Adroit Market Research, global pharmaceutical glass packaging market is estimated to grow at a CAGR of nearly 5 percent to exceed a market size of $20 billion by 2023. Furthermore, Adroit Market Research estimates that market value of glass packaging in FMCG products is estimated to grow at a CAGR of 4.4 percent to reach $1,614.1 million by 2023. The table below lists some of the leading players in various geographies of the world.
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