Flexible packaging in Russia

Euromonitor Intl.’s "Fortunes of Flexible Packaging in Russia" notes.

Euromonitor Intl.’s “Fortunes of Flexible Packaging in Russia” notes that globally, “flexible packaging accounted for 51% of all packaging retail unit volumes in 2010. Despite a slight drop in flexible packaging share over the last 5 years, losing out to liquid cartons in particular, flexible packaging still remains a very important pack type.”

Euromonitor says, “Russia is one of the biggest consumers of flexible packaging, accounting for 5 percent of global unit volume demand in 2010, reflecting the large size of this market. The importance of the country is also strengthened by the fact that Russia is now dynamically recovering from the economic recession. Total GDP growth for 2011 [was] predicted to reach 14 percent in Russia, while the global figure hovers at 6 percent. However, consumer habits and consumption trends are very often different across Eastern Europe when compared to the developed West.”

One of the reasons behind flexible packaging’s growth in Russia is that many products “traditionally sold unpackaged, began to adopt simple packaging,” says the report. “The cheapest choice for producers in this regard was flexible plastic packaging. Ice cream, bread, frozen vegetables, and confectionery are among the products for which packaging was introduced in recent years. From a culture where consumers have been happy to scoop loose products into bags and boxes in the store, a developing retail landscape and the growing influence of supermarkets/hypermarkets has increased the importance of branding and hence the need for prepackaging in these cases. Russia, contrary to the global trend, has experienced a stagnation of flexible packaging use over 2009 and 2010. However, over the wider historic period (2005-2010), flexible packaging in Russia grew at a CAGR of more than 1 percent. Also flexible plastic is the biggest category within flexible packaging, accounting for 64 percent in 2010 in Russia.”

Smoking is a factor in the Russian packaging market. Euromonitor explains, “In Russia, health concerns regarding smoking are much less expressed than globally and 43 percent of the adult population is smoking, a figure which has remained stable over the historic period. Russia’s tobacco market is one of the world’s largest. There is still no public smoking ban, however tobacco producers were forced to rebrand their cigarettes to remove such words as ‘light’, ‘low-tar’, ‘mild’ on packs after a ban in 2009. At the same time, restricted government regulations on cigarettes packaging, such as health warning labels on the cigarettes packs, and consumers shifting to cheaper tobacco products, defines tobacco packaging results over 2009-2010, when consumption of cigarettes dropped. Moreover, the dimensions of the pack (not the number of units in the pack) have become smaller, as slim and super slim format cigarettes saw dynamic growth before the economic crisis.”

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