FMI Analyst View: “Cheese Please: How Packaging is Shaping the Dairy Market”

The global cheese packaging market is approaching a value of USD 3,706.5 million in 2024. The industry is expected to reach a value of USD 5,577.9 million by 2034. Revenue is expected to increase at a CAGR of 4.2% during the forecast period. The revenue generated by cheese packaging in 2023 was USD 3,519.4 million. The industry is expected to show a YoY growth of 5% in 2024.

Boxes are expected to record a growth rate of 4.5% during the assessment period as they provide a sturdy and protective outer layer that shields the cheese from external elements during storage and shipping. Sales of trays and flow wrap are increasing as they are the most suitable format for packaging cheese and maintaining freshness. This packaging format is conveniently portable and maintains the safety of the products, which further increases the demand.

E-commerce and retail sales are following an upward trend among the distribution channels in the cheese packaging market. E-commerce is expected to capture a share of 26.4% by 2034, driven by increasing penetration, accessibility and convenience. E-commerce offers a variety of choices to select from a wide range of brands and products that help consumers in a better and easier shopping experience.

The booming retail sector is expected to contribute USD 519.6 million during the forecast period. The expansion of the retail sector due to the increasing number of hypermarkets, supermarkets and convenience stores is influencing the sales of cheese packaging.

In terms of material, plastic is the relatively favorite material in cheese packaging due to its flexibility and versatility, currently generating $1.4 billion in sales. Plastic packaging provides an effective barrier to cheese. It is transparent and lightweight, making it ideal for cheese packaging.

Paper is expected to reach approximately 25% market share by 2034, driven by sustainability, coatings innovations, regulatory compliance and consumer propensity to use eco-friendly packaging.

Key industry highlights

Reclosable flexible packaging provides product protection and extended shelf life

Cheese companies need to focus on differentiating their products to capture consumer attention on the shelf. Cheese packaging presents a challenge when packaging different types of cheese, which require unique storage solutions. Reclosable packaging is an ideal solution for cheese packaging that overcomes the challenge of product protection.

Reclosable packaging solutions provide barrier properties that protect the cheese from external factors and maintain the freshness of the product. Manufacturers integrate this packaging with closure technologies to maintain the right humidity and remove excess oxygen and moisture. These properties that reclosable packaging provides will extend the shelf life of the product and maintain the integrity of the product.

The future of reclosable packaging is positive as it is convenient to handle with better grip and tight closure of all types of packaging. Companies can also use the double locking technology for improved effectiveness of the packaging. This technology provides lower moisture transmission rates which is likely to maintain the longer period of soft texture cheese compared to other packaging.

Increasing preference for environmentally conscious packaging materials

The increasing focus on sustainability and changing consumer preferences combined with strict packaging regulations are having a major impact on the cheese packaging market. Growing eco-consciousness among consumers, discussions on climate change and circular economy goals are shifting the focus towards the recyclability of materials. Certain regulations regarding the use of plastic due to increasing plastic pollution are forcing governments to implement the laws.

Regions like Europe and North America have created and proposed various laws to achieve the goals of the circular economy. For example, the European Union has regulations on packaging and packaging waste, a directive on single-use plastics, and an EU Waste Framework Directive that enforces the use of sustainable materials. Countries like the United Kingdom and Spain have imposed taxes on the use of plastic. As a result, brands are striving for sustainable business practices and packaging choices and working to reduce their impact on the environment.

Manufacturing companies are exploring alternatives to traditional materials, such as bioplastics made from natural materials such as sugar cane, corn or cellulose, which are biodegradable and compostable. As recyclability has become a key factor, the adoption of mono-material packaging such as mono-PE and mono-PP will support the transition to recyclable packaging.

The use of recycled content in packaging is a key aspect that contributes to the circular economy and reduces plastic taxes. Companies such as Amcor plc offer solutions such as recycle-ready packaging and mono-material packaging, along with offering carbon footprint reduction services for businesses.

Non-recyclable packaging materials are a major barrier to the market

Cheese packaging is used in many different ways and requires specific barriers to preserve the product. They must have anti-leakage properties and be compatible with fast production. Manufacturers used films such as OPA/P and OPA/PEP that perform better in cheese packaging. These materials have challenges in recycling, which is a major factor that hinders their acceptance. Since sustainability is an important factor that manufacturers must take into account, they must develop biobased materials or material films that have a minimal impact on nature.

Country-specific insights

The section below covers the industry analysis of the cheese packaging market for various countries. Market demand analysis of key countries across various regions of the world including North America, South Asia, Europe, East Asia, and others is provided. Brazil is expected to remain the leader in Latin America, with a value share of over 30% through 2034. In East Asia, India is expected to witness a remarkable CAGR of 5.1% by 2034.

Thriving US pharmaceutical industry creates opportunities for cheese packaging manufacturers

The United States currently holds a significant share in North America and is expected to reach USD 924.8 million by 2034. Consumers in the United States are consuming more dairy products including cheese. The increasing demand for ready-made meals and fast food products that mainly contain cheese is increasing in the country. The US is one of the companies that is embracing innovative cheese packaging technology such as modified atmosphere packaging. Consumers are demanding a variety of cheese that needs smart and effective packaging solutions for preservation.

The US has a strong position in milk production, which is likely to scale up the consumption of dairy products in the country. In addition, the country has a significant demand for convenience and ready-to-eat foods containing cheese. Consequently, the demand for cheese packaging is growing in the country to maintain the freshness and quality of packaged cheese.

Expansion of India’s foodservice industry boosts sales of cheese packaging

India is expected to generate an incremental opportunity of USD 86.8 million and capture a value share of 38.6% by the forecast year. The foodservice market in India is expected to grow at a CAGR of 11.19% during 2022 and 2028, as reported by the India Brand Equity Foundation (IBEF). The remarkable growth and expansion of the foodservice sector in India will drive the demand for cheese packaging solutions in the future.

The growth in disposable income and urbanization has led to people eating more from outside. This has a direct impact on the expansion of cheese packaging in India, creating growth opportunities for manufacturers.

Significant cheese consumption in the UK Propel Cheese Packaging

The United Kingdom is expected to generate USD 174.1 million in revenue, growing at a growth rate of 2.8% by the assessment year. The increased cheese consumption in the United Kingdom is having a significant impact on the sales of cheese packaging.

Manufacturers are responding to the demand of European consumers for fresh and soft cheese products with a longer shelf life. Companies are also implementing eco-friendly and convenient packaging options such as cups, bags with resealable closures, trays, etc. for cheese packaging. The combined effects of these factors are responsible for the growth in sales of the cheese packaging industry in the UK.

Competitive landscape

The cheese packaging industry is evolving with the help of technology and automation that makes the process more efficient and accurate. Smart packaging with freshness indicators and QR codes for traceability is another trend that is gaining popularity. These innovations not only improve the consumer experience, but also provide manufacturers with insight into supply chain management and losses. Sustainable materials and packaging are gaining attention as consumers and regulators demand environmentally friendly products.

Key players in cheese packaging are constantly innovating to stay ahead in the competitive market by providing innovative solutions that maintain the freshness and quality of products. The dynamic nature of the market forces organizations to continue to innovate and improve their products. Strategic alliances and acquisitions between packaging companies and between packaging companies and cheese producers are increasingly being formed to increase the companies’ capabilities and visibility.

Recent developments in the cheese packaging market sector

In April 2024, Amcor announced the expansion of its printing and processing capabilities in North America for the dairy market to meet customer needs for flexible packaging.

In April 2023, Stora Enso Oyj introduced Trayforma BarrPeel, a sustainable barrier-coated paperboard material for pressed trays for fresh food products such as cheese. They also reduce the 10% plastic in the trays.

In November 2023, Mondi plc announced a collaboration with Skånemejerier to develop cheese packaging. The company created a mono-material polypropylene-based packaging for ICA’s Hushållsost cheese.

These insights are based on a report by Ismail Sutaria Cheese packaging market by Future Market Insights.