Italy's Packaging Industry Defies the Circumstances
As the world's seventh largest economy, Italy is a household name in global trade. Its manufacturers are also among the leaders in packaging materials and machinery. The industry has coped surprisingly well with the crises of recent years.
Italian exporters are well-known all over the world for their food products. Packaged for travel to supermarkets and restaurants, specialities such as cheese, pasta, wine or olives end up on the tables of countless consumers. Yet, as well known as they may be, food products make up only a small portion of Italy's exports. The third largest economy in Europe and seventh largest in the world produces a wide variety of goods for export. Its exports range from machinery (17.7 percent) and vehicles (7.4 percent) to pharmaceuticals (6 percent) and consumer and luxury goods. These goods are sent on their way to customers in primary, secondary and transport packaging of different materials.
According to the Italian Packaging Institute, there is therefore also a direct correlation between production activity in the country and the performance of the packaging sector. In 2021, for example, the sector benefited from the economic recovery after the Covid pandemic. Of course, domestic demand was also a strong driver of packaging demand. Data from the Italian Institute of Statistics (ISTAT) showed a positive trend for gross domestic product in December 2022: after 6.6 percent in 2021, 3.9 percent and growth were still forecast for 2022. For 2023, the experts expect subdued growth of 0.4 percent. Following this trend, packaging manufacturers recorded positive figures in 2021 and were able to increase their production by 7 percent compared to the previous year. As far as materials are concerned, among the various types of packaging, metal packaging performed best, along with glass packaging: +20 percent for aluminium containers, +5.8 percent for glass packaging and +5 percent for packaging made of steel. Cellulose packaging also showed strong performance, ending 2021 with a 10.5 percent increase in production.
Packaging Provides Answers to Consumer Trends
The booming online trade in Italy was another reason why packaging manufacturers were able to achieve good sales figures. Similar to Germany, this business grew rapidly during the Corona lockdowns. As researchers from the “Osservatori Digital Innovation del Politecnico di Milano” report, online purchases by Italians grew by +14 percent in 2022, reaching a total value of 45.9 billion euros. Excluding online services, sales of products through digital sales channels increased by 10 percent compared to 2021, reaching 34 billion euros.
This consumer trend had a positive impact on the demand for packaging. On the one hand, according to Mordor Intelligence, flexible packaging solutions are increasingly being used — this applies in particular when products need to be protected from environmental influences. At the same time, however, packaging based on cellulose also profited and here especially the suppliers of corrugated board. According to PackMedia's figures, corrugated board accounts for about 88 percent of all packaging in e-commerce.
Packaging Machines Made in Italy
A strong pillar of the Italian economy is mechanical engineering. Some of the world's market leaders in packaging machine manufacturing are also located in Italy and are regular exhibitors at FACHPACK in Nuremberg. The companies are organised in the association of Italian packaging machine manufacturers UCIMA, which was able to present encouraging figures for 2022.
According to these figures, the total turnover of the industry remained stable at around 8 billion euros and was only 3 percent below the record year of 2021. The machines from Italy are popular with customers abroad: Manufacturers were able to export packaging machines worth 6.19 billion euros. However, this value was 4.3 percent below that of the previous year. Domestic demand, on the other hand, developed positively with an increase of 1.3 percent to 1.8 billion euros. These figures are all the more impressive when viewed against the worsening geopolitical backdrop. Delivery delays of important components from Asia as well as rising energy prices and transport costs also had an impact on machine manufacturers. Despite these adversities, the industry still had full order books at the end of 2022.
Cautiously Optimistic Outlook
Looking ahead to 2023, the Italian packaging industry is somewhat less optimistic. Since its success is directly linked to the production performance of the economy as a whole, it also feels downward trends. The strength in exports also makes manufacturers vulnerable to global developments. And domestically, consumers are also holding back on their purchasing decisions due to rising prices. However, analysts see a glimmer of hope for the second half of the year, which should then also have a positive effect on the figures of the packaging industry.