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Packaged Food Products Market Anticipated to Generate a Revenue of $49,685.2 Million, Growing at a CAGR of 6.3% from 2020 to 2027

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The packaged food products market is predicted to generate $49,685.2 million in the 2020-2027 timeframe, growing from $30,830.0 million in 2019 at a noteworthy CAGR of 6.3%.

Impact Analysis of COVID-19 on the Packaged Food Products Market

During COVID-19 pandemic in the world, the packaged food products market has experienced an exponential rise. This growth owes to the increase in the consumption of packaged food items like snacks and beverages, biscuits, cookies, chips, chocolates and frozen food products like vegetables, dairy products, fruits, snacks. During lockdown and work from home facility for the employees, the consumption of snacks and chips have increased. During complete lockdown, people were restricted from going to supermarkets and hypermarkets due to which their shopping behavior has changed as they have started bulk purchasing of food products. This has motivated many companies and food manufacturing units to boost their production line and increase the packaged food supply and demand chain. Furthermore, the corona virus pandemic has decreased the health conditions of the people, worldwide as they experience many health ailments post corona virus infections. In such cases, the consumers are opting for ready-to-eat and less time-consuming healthy food product alternatives. These food products will enhance their health and immunity as they contain less preservatives, cholesterol, fat, and high nutritional content. Hence, this factor has driven the companies to manufacture healthy food products.

Packaged Food Products Market Analysis

Increased demand for ready-to-eat healthy food products is expected to drive the packaged food products market in the forecast time period. As the urban population and number of working individuals are increasing tremendously, the consumption of fast-food products is also gaining pace. Private sectors have a hectic time schedule, and it is tiring for employees to spend long hours for cooking food. Hence, they prefer the packaged food products which can be prepared with very less ingredients and consume less time. This factor is likely to drive the package food products market in the predicted time duration owing to the high demand for ready-to-eat food products such as frozen food products, snacks and more. Apart from this, consumer’s inclination towards healthy food and beverages will accelerate the market growth. Consumers demand for organic based food products made up of natural components and contain less preservatives. To ensure this, the packaged food companies now focus on the production of healthy organic based food products which are high in nutrition content. For instance, a UK based company, Just in Time, JOI, in April 2021, introduced its first zero waste plant milk product which is manufactured with only one ingredient which is sustainable source, organic and gluten free oats and is packed in a compostable pouch.

However, increasing risk of food contamination due to plastic packaging material is the main restraining factor in the growth of the packaged food products market. Plastic material is extensively used as a packaging material in the food industry as it is light weight and  versatile as it can be carried easily anywhere during travel. But it is made of chemicals which can easily react with preservatives and antioxidants in the food and thus contaminate it. For instance, according to an article published in the South Wale Arugs, a tabloid newspaper, on May 2, 2021, the supermarkets in the U.K. issued health risk warnings to consumers on consuming items which they purchased from stores including Tesco, Morrisons, Asda, and Sainsbury's, Aldi. The packaged food products at the stores like chocolates, dates and other were contaminated with a bacterial species, salmonella, which is responsible for causing food allergies and food poisoning.

Adoption of healthy packaged food alternatives among the consumers have provided many opportunities for companies of the packaged food products market to expand their market. Consumers prefer to choose healthy food products which offer rich nutritional value, low cholesterol, preservatives, and fat. Owing to the high demand for the healthy food, many beverage industries have started manufacturing organic and non-alcoholic juices to target health conscious customers. This factor will contribute to the growth of the market in the forecast time.

Packaged Food Products Market, Segmentation

The packaged food products market is segmented based on product, packaging type, sales channel and region.

Product:

The packaged food products market is mainly classified into sub-segments like cheese sauce and dips, jams and jellies and apple compotes. Among these, the cheese sauce & dips sub-segment is anticipated to have the fastest growth and surpass $31,739.2 million by 2027, with an increase from $193,21.4 million in 2019.

This increase owes to factors such as more consumption of cheese sauce and dips in European countries. Also, rising demand for fast foods like pizzas, burgers, tacos, and more will accelerate the market growth as these fast foods uses cheese sauce as a dressing. Prevailing trend of Mexican food along with Mexican dips is likely to increase the market revenue in the forecast time frame.

Packaging type:

Based on packaging type, the packaged food products market is segmented into cans, jars, cups and flexibles. The jars sub-segment of the packaged food products market is projected to have the highest growth and it is projected to surpass $24,643.2 million by 2027, during the analysis timeframe. Glass jars increases the shelf life of the food by providing extra protection to food from outside environment, maintains texture and aroma of the food, provides visual delight to the consumers and prevents the food contamination. This factor will contribute to the growth of the market in the coming years.

Sales channel:

Based on sales channel, the packaged food products market is segmented into retail and food services.  The retail sub-segment is anticipated to have a dominating market share in the global market and register a revenue of $32,287.2 million during the analysis timeframe. The sub-segment growth is attributed to increasing trend of purchasing packaged food products from the retail and convenience stores among the consumers as the retail stores provide many brand choices at a single place.

According to geographical analysis, the packaged food products market for North America accounted for $9834.8 million in 2019 and is estimated to reach $ 13663.4 million by 2027, with a CAGR of 4.3%., due to the hectic work life of consumers in the region and their growing preference for ready-to-eat food and convenience.

Key Players

  • B and G Foods, INC.
  • Andros Foods
  • Histon Sweets Spreads Limited
  • The J.M. Smucker Co.
  • Gehl Foods, LLC.
  • Kraft Heinz
  • Conagra Brands
  • Tree Top 

Porter’s Five Forces Analysis for the Global Packaged Food Products Market

  • Bargaining Power of Suppliers: The companies involved in packaged food products market are many and thus, they have several options and alternatives to handle expensive supplies. Therefore, the companies will demand the prices keeping their competitive market in the mind.
    Thus, the bargaining power of the suppliers is high.
  • Bargaining Power of Buyers: Buyers have high bargaining power, primarily because of the variety of food products of different brands in the market. The buyers can hence choose the product that best fits their preferences and taste. 
    Hence, the bargaining power of buyers is high.
  • Threat of New Entrants: Startups entering this market are using advanced technology to manufacture healthy food products in time without compromising with the quality. But, already established brands in the market and their fast pace to innovate the products as per their consumer’s choice will create a competition for the new companies. 
    As a result, the threat of the new entrants is moderate.
  • Threat of Substitutes: Quick product manufacturing along with the best quality being offered in the market by companies attract customers. However, brand loyalty among consumers does not allow them to switch to different brand easily.
    Therefore, the threat of substitutes is moderate.
  • Competitive Rivalry in the Market: The food companies are launching their products with new flavors and textures in the international market and strengthening the footprint worldwide. 
    Therefore, competitive rivalry in the market is high. 
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