Inflationary pressure on packaging materials will continue to rise in 2022 leading to double-digit price increases, with food packaging being a major contributor. That’s according to a new report from Rabobank that covers the 12-month inflation outlook in North America for packaging materials in light of the Russia-Ukraine war.
Notes Rabobank, heading into 2022, U.S. consumer retail demand remains strong. Total retail sales achieved a 10.3% CAGR in the past two years, with goods requiring more packaging than before. In many cases, the demand exceeded the growth in packaging production, leading to a tight food packaging market with high operating rates across various materials, such as beverage cans, corrugated boxes, and PET milk bottles. Meanwhile, cost inflation is increasingly hitting the packaging sector due to increases in energy, transportation, and labor costs. Notes the report, “Along with the ongoing conflict between Russia and Ukraine, these factors will lead to continued price increases of food packaging in the next 12 months.”
