2022 Packaging Trends

Jamie Gorman and Richard Drayson, Aegg’s Managing Director & Sales Director, give their views on the 2022 packaging trends, pressures and opportunities within the UK’s food & drink market.

A Quick Look Back at Key Factors that Affected the Packaging Market in 2021

Firstly, to give 2022 some context, we're sure that no one needs reminding that 2021 was a highly ‘unpredictable’ year. The pandemic continued to have a big impact:

• costs rose sharply due to supply and demand issues, including raw materials, fuel, energy and sea container shipping, all impacting businesses’ bottom line and the supply chain.
• industry events were cancelled or postponed, especially for events with a large proportion of overseas visitors such as the Packaging Innovations show in February, due to the uncertainty of overseas travel restrictions.
• consumers’ buying patterns continued to evolve, with increased online shopping and less food-on-the-go consumption due to pandemic restrictions.
• packaging sustainability was still very much on the agenda and companies started planning ahead to address the April 2022 plastics tax regulations.
• the Brexit deal affected the supply chain, tightening the availability of materials, such as cardboard.

2022 Packaging Trends, Pressures and Opportunities

If 2021 was ‘unpredictable’, 2022’s keywords are ‘complete uncertainty’!
However, the uncertainty and rising pressure for all businesses will likely lead to opportunities and innovation, too…

The uncertainty and rising pressure for all businesses will likely lead to opportunities and innovations

2022 Packaging Pressures

Rising Costs

• Lorry Drivers
  • 2021 saw a severe truck driver shortage in the UK, partly due to Brexit rules making it harder for drivers to travel between countries and drivers who were previously working in the UK unable to return. However, the situation is now starting to ease as more drivers become available due to government initiatives that have been put in place. The higher level of 2021 drivers’ wages are likely to remain during 2022 as the sector continues to beef up its workforce.
    
• Inflation

We may see a bigger switch to lower priced foods and retail outlets as consumers feel the pinch. 

• • The headline rate of inflation in the UK rose to 5.1% in November 2021, its highest rate in a decade, affected by higher prices for transport (especially petrol), food, clothing and footwear. This level of Inflation will continue to be felt during 2022 by both businesses and consumers alike, which will further affect consumer buying patterns. We may see a bigger switch to lower priced foods and retail outlets as consumers feel the pinch.
• Energy prices
  • Due to supply and demand, wholesale energy prices remain high. At the time of writing, gas prices were trading at 217p per therm, although they peaked at over 400p per therm in December 2021 (compared to 59.01p in January 2021). It is thought that gas prices will start to settle during 2022, although still at a high level. Energy providers have begun to pass on these costs to businesses and consumers, pushing up prices within the supply chain.
• Shipping
  • Sea container shipping costs look set to remain high during 2022, although there are signs that pricing will firm up later this year as the shipping industry starts to resolve some of the major problems it encountered. In 2021, the pandemic disrupted containers’ normal flow with a scarcity of containers in the right locations, reduced workforce at the terminals, several operational vessels out of business for refurbishment and a changed flow of goods based on changes in people’s buying behaviours. This resulted in sea freight cost increases of over 400%.
    
    
  
  

2022 Packaging Trends

One of the hottest trends for 2022 is minimalist packaging design.

• Minimalist Packaging Design
  One of the hottest trends for 2022 is minimalist packaging design. It helps to make the content stand out and be the focal point, making your brand more memorable. Packaging with a proportionally large label area that you can apply your designs to, is ideal for this trend, such as Aegg’s 206ml round glass panelled jar.

• Recycled content vs thin-walling
  The plastics tax will be effective from April 2022, where tax of £200 per tonne will apply to plastic packaging produced in, or imported into, the UK that does not contain at least 30% recycled plastic. (Read our article on the plastics tax here). Therefore, expect to see more packaging with recycled content, such as rPET. However, with very limited availability of some recycled plastics at the start of 2022 and beyond, ‘thin-walling’ is an option companies may adopt. Thin-walling is a process that saves material and reduces weight whilst increasing functional requirements and sustainability, which will help to mitigate against extra costs as a result of the plastics tax.

Expect to see more packaging with recycled content, such as rPET

• Ecommerce packaging
  UK shoppers who said they had been shopping more online grew from 40% in March 2020 at the start of the pandemic to around 75% by February 2021. This trend is set to continue during 2022 as we navigate our way through the pandemic, so packaging needs to entice online sales, withstand online deliveries and be cost-effective to produce.

2022 Packaging Opportunities

• Innovations in Materials due to Shortages
  More and more businesses are struggling with the current cardboard shortages and are turning to alternative packaging materials, such as recyclable plastics, from returnable packaging containers, through to pallets and packaging inserts. Expect to see new material innovations from packaging manufacturers during 2022. 2022 is a good year to review your packaging materials and perhaps investigate more innovative alternatives.
  
  
• Faster Switch to ‘Cleaner’ Renewable Energy
  The glass industry is making big strides by moving to renewable energy, with its new furnace an important step in Europe’s glass production becoming carbon neutral. (read our article on the Furnace for the Future).
  According to CNBC, the amount of electricity generated from renewables is set to increase by more than 6% in 2022. However, the increase in renewable energy is still lower than the increase in global energy demand overall, so more investment is needed on a global basis to keep up with the demand.

The glass industry is making big strides by moving to renewable energy

• Foreign Exchange Rates Can Offset Some Costs
  At the time of writing, the foreign exchange rate is 1.20. This higher rate means you can buy more foreign currency for your money and can potentially offset some of the extra costs mentioned above if importing products or raw materials.
  
  
• Improved Business Conditions and Productivity
  Many manufacturers are optimistic for 2022. Make UK predicts a growth in manufacturing for 2022 of 3.3%. This returning industry confidence will help to drive business forward and create new opportunities.

2022 Packaging: A Summary

2022 looks set to be uncertain with rising energy prices and inflation particularly hard to deal with, although some business areas are showing signs they may start to settle later in the year, such as shipping costs and gas prices.

We have all got through the last 2 years of the pandemic, leaving businesses to take opportunities where it can. Some companies have prospered (Amazon!). Others not so much. Collectively, we have all learnt lessons along the way and have become stronger as a result. So, let’s concentrate on how much we have all achieved and make the most of the many opportunities that lie ahead.

Let's make the most of the many opportunities that lie ahead

Aegg is a dedicated food and drinks packaging supplier. Please call us on +44 (0)1722 416 401 if you would like to discuss a packaging project with us.