COVID-19 Impact
The COVID-19 pandemic is impacting different industries; one of the few industries that were largely hit to some extent was the packaging industry. The temporary shutdown of manufacturing facilities has negatively impacted the market. The downfall in the production of metal cans, disruption of logistical services, and lack of workforce impacted the market negatively during the covid-19 crises. Travel restrictions have reduced the supply of raw materials required for the manufacturing of metal packaging, which, in turn, has affected negatively the market growth during the pandemic.
South America Metal Packaging Market Segment Analysis – By Type
The food & beverage cans segment accounted for approximately 18% of the market share in 2020 and is estimated to grow at a significant CAGR during the forecast period. Cans are the most widely used package types compared to other packing types. They are gaining popularity in both developed and developing countries due to the high demand for beverages. Cans are available in different sizes and shapes and they are easy to handle. The growing consumption of diet cokes and soft drinks is boosting the segment growth. Metal cans have a lighter environmental footprint and metal is easy to recycle through natural processes. The drums segment is expected to hold a significant share in the South America Metal packaging market. The growing transportation of chemicals and vegetable oil is driving the market growth for the drums segment.
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South America Metal Packaging Market Segment Analysis By Material Type
The commonly used materials in metal packaging include aluminum and steel. The aluminum segment is accounted for more than 40% of the market share in 2020 and is estimated to grow significantly during the forecast period 2021-2026. Aluminum metals are flexible and support unique shapes and styles for advanced packaging systems. Lightweight aluminum cans offer more accessibility and convenience, especially for food and beverage products. The increasing environmental concerns, along with the growing usage of aluminum cans due to their low environmental impact are supporting the segment growth during the forecast period. The aluminum metal packaging solution can be easily recycled and can save up to 74% of the energy used to produce them.
South America Metal Packaging Market Segment Analysis By Application
The food & beverage segment accounted for more than 28% of the market share in 2020 and is estimated to grow significantly during the forecast period 2021-2026. Metal packaging extends the shelf life of food & beverage products and delivers protection against light, oxygen, and bacteria. The growing demand for canned food in Brazil is driving the market growth during the forecast period. The rise in awareness regarding the drawbacks of using single-use plastics along with stringent government regulation on plastics are supporting the metal packaging growth in the food & beverage industry.
South America Metal Packaging Market Segment Analysis – By Geography
Brazil held the largest share in the South America metal packaging market in 2020 up to 30%, owing to the presence of multiple end-users in the region. The presence of food & beverage processing companies such as JBS Brazil, Cosan, BRF, and Marfrig Global Foods among others are driving the Brazil metal packaging market. According to a research article, Brazils chemical industry is the third-largest industrial sector in the economy, representing around 10% of overall industrial GDP. According to the data published by the World steel organization, Brazil produced approximately 31MT of steel in 2020 and 32.6MT in 2019. Brazil holds about 80% share in total steel production in South America during 2019-2020.
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South America Metal Packaging Market Drivers:
Growing food & beverage industry
The food & beverage industry is one of the prominent end-user of metal packaging. The growing restriction on plastic usage in food & beverage packing is driving the metal packing market. According to Euro monitor analysis, retail sales in the packaged food market in Brazil reached US$82.1 billion in 2020. According to the data published by the Brazilian Food Processors’ Association, in 2019, the brazil foodservice industry accounted for US$117 billion. According to Food Export Organization, Brazil is the 11th largest U.S. export market for food products in the Latin American region. The organization also says that the total U.S. consumer food exports to Brazil reached US$217.3 million in 2020. Argentinas Secretary of integral policy on drugs mentioned the country consumes the most alcohol per capita in Latin America.
High recyclability rates of metal packaging
Recycling metals minimize the use of Earths resources and decrease the level of greenhouse gas emissions used in subsequent production. The well-established recycling infrastructure for metal packaging in the region has contributed to its high recycling rates. Aluminum and steel are the most recycled materials in the packaging industry. Approximately 80% of steel packaging and 74% of aluminum beverage cans are recycled in Latin America. Ball corporation is one of the largest manufacturers of aluminum beverage cans in Brazil. According to the Brazilian Aluminum Association, and, the Brazilian Association of Can Manufacturers, the country recycled approximately 97.6% of beverage cans in 2019.
South America Metal Packaging Market Challenges:
Growing usage of plastic in the packaging industry
Plastic is widely incorporated in packaging applications because of its performance, cost-effectiveness, and durability. Plastic packaging is used in different industries such as food & beverage, pharmaceutical, consumer goods packaging, and cosmetic & personal care among others. Plastic is used for manufacturing bottles, carry bags, tubes, and trays among others. The low cost, water resistance, and lightweight of plastic are driving the usage in the packaging industry. Plastic products are also easily recyclable when compared to metal products. These are some of the major challenges restraining the market growth for metal packaging.
South America Metal Packaging Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the South America Metal Packaging market. Major players in the South America Metal Packaging market are:
1. Alcoa Incorporation
2. Sonoco
3. Amcor Limited
4. Ardagh Group
5. Ball Corporation
6. Crown Holdings
7. Bway Corporation
8. Grief Incorporated
9. Silgan Holdings
10. Manaksia Group
11. Shetron Group
Acquisitions/Technology Launches
In August 2020, Ball Corporation acquired Tubex Aluminum Aerosol Packaging Business in Brazil. The company acquisition includes a manufacturing plant in Itupeva, which is near Sao Paolo, Brazil. The Itupeva plant includes eight extruded aluminum aerosol can line and produces personal care packaging for global and local customers in Brazil.
Key Takeaways
Brazil is expected to register a significant CAGR of 3.4% during the forecast period (2021-2026). Changing lifestyles, increasing consumer spending, emerging economies, and rapid population growth are the major factors driving the market growth for metal packaging during the forecast period
Metal packaging is gaining popularity due to changing consumer taste, rising sales of grocery products including frozen and chilled food among others.
The manufacturers are involved in developing advanced packaging solutions for different end-use industries. Investments in research and developments to enhance the capabilities of South American metal packaging are supporting the market growth.
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