2024 packaging trends – experts’ predictions for the next 12 months

Sustainability was the hot topic of 2023 amongst both businesses and individuals. Previous packaging surveys have even highlighted that one in five consumers would not buy from retailers that did not use sustainable packaging.

However, a new narrative is emerging, driven by ongoing inflation, price pressures, and the cost of living crisis. The result is a greater desire and perhaps even a need for balancing sustainability efforts against costs.

In fact, the recent 2023 Macfarlane Unboxing survey found 42% of respondents indicating that sustainability was only important to them if it didn’t significantly reduce costs.

It means that finding cost-effective ways to improve sustainability is vital for businesses. Equally important, however, is that the need for genuinely sustainable packaging does not become overlooked in the face of increasingly difficult trading conditions.

So, with costs becoming an ever more critical issue, what can businesses do to address this?

A key packaging trend in 2024 is likely to be a switch to minimalist packaging. This back-to-basics approach will see companies finding ways to use packaging more efficiently and adopting simple yet effective designs that focus on functionality over excessive branding and various packaging materials.

Whilst this approach can help to reduce costs, it does help improve sustainability, too. Size-optimised packaging uses less material and creates less CO2 emissions during transit.

As consumers become ever more aware of the impact of packaging on the environment, minimalist yet highly functional packaging will only grow in popularity.

Material costs have been a significant headache for packaging suppliers and users over the past few years. In fact, the price of paper almost doubled between June 2020 and January 2023.

Material shortages, energy prices, freight costs, and even Brexit all played a part in significantly driving up the price of corrugated cardboard. And, during this period, demand rocketed due to the growth in eCommerce (driven by the pandemic and national lockdowns).

Weaker demand and some respite on energy costs should stabilise paper prices next year. Whilst this is countered by ongoing supply chain challenges, 2024 should finally see some price stability return to the market.

Connected, interactive or smart packaging are all effectively the same thing – packaging linked to a technology to provide additional features and functionality. And 2024 could be the year this packaging trend finally becomes more mainstream.

Packaging that includes QR codes or even RFID tags can offer businesses numerous ways to enhance their packaging. From easy access to online instruction manuals, links to buy related products and supplies, or even augmented reality experiences, interactive packs can help increase consumer engagement and drive loyalty.

We may also see the adoption of sensors and security features (for example, to more accurately trace packaging through the supply chain or help reduce counterfeit goods).

With adoption still in its infancy, if not necessarily the technology itself, businesses have an excellent opportunity to gain a significant “first mover” advantage by incorporating these features into their packs.

Beyond smart packaging, another trend to watch is inclusive packaging. Inclusive packaging is that which looks beyond aesthetics and functionality (although these remain important) to also represent diversity and social responsibility. Doing this can align with customers’ values and beliefs.

Ethically sourced materials, branding representing diverse demographics (without cultural appropriation), and genuine transparency from businesses will all likely be increasingly important over the coming 12 months.

In short, packaging can act as a canvas for reflecting a brand’s ethical values.

There are several trends related to packaging and branding you can expect to see in 2024, such as hyper-contrast, flat graphics and minimalist designs.

Yet, with branding on packaging increasing significantly over the past seven years (from 39% in 2016 to 57% in 2023), there is a growing requirement for greater sustainability. Water and soy-based inks and sustainable coatings are likely to become more prevalent as a result.

Another area to watch is increased personalisation – the use of AI and digital printing capabilities is opening up significant opportunities for consumers to receive packaging that is unique to them. The advantages to brands here are improved unboxing experiences and greater customer loyalty.

With the news that Defra is to mandate the Recycle Now symbols for all packaging by 2026, it is safe to predict that there will be little change to the current, haphazard approach in the short term.

However, with consumers increasingly focused on sustainability, transparent, easy-to-understand labelling, recycling symbols and  instructions are now essential.

Businesses should consider how well their packaging performs in this area and even consider making adjustments in advance to changes coming in April 2026.

Whilst there is hope that material prices will finally stabilise in 2024, there are other factors at play that could influence packaging costs in 2024.

Although the labour market has remained strong, it is now showing signs of softening. A potential result is the impact on wage inflation. However, the general feeling within the packaging industry is that skilled employees remain difficult to find (and are increasingly hard to retain). But looking at official data, it shows that the number of people in work fell sharply, vacancies dipped below 1 million (for the first time in two years), and the UK unemployment rate increased.

While this may appear to be good news for prices, the counterargument is that it may dampen consumer spending (weakening overall demand). However, inflationary pressures should ease somewhat as we move into 2024.

The government remains on course to fully implement the Extended Producer Responsibility (EPR) in 2024. And, alongside the Plastic Packaging Tax, it has the potential to see a significant, long-term shift in the types of packaging businesses use.

EPR aims to make any business that uses household packaging (i.e. that ends up with consumers) responsible for the costs of dealing with the waste generated (recovery, recycling and disposal). However, besides promoting a circular economy, EPR will also penalise firms with increased charges for using less sustainable materials. For example, higher fees will apply to plastic packaging than the easier-to-recycle paper-based corrugated packaging.

It is safe to predict that businesses will likely begin transitioning from single-use plastics to more sustainable options with these modulated fees looming. Considering that the Plastic Packaging Tax rates are also increasing in April 2024, a significant shift feels ever more likely.

It may seem an unlikely prediction that AI will have many use cases in packaging. Still, contrary to fears that AI will replace humans, businesses could potentially leverage it to help them with strategic decisions on their packaging.

For example, AI can collect and analyse vast amounts of consumer data. This approach could be used, for example, to research behaviour and tailor packaging to align with specific markets and demographics. Similarly, AI can identify patterns at scale and learn from these. An example of how businesses could use this is to conduct AI-led A/B testing, allowing brands to identify messaging and designs that resonate with their target markets.

Finally, AI could help with packaging optimisation, calculating the most suitable sizes, layouts, and forms to minimise material use, transport requirements, and even costs.

All of these applications could prove strategically advantageous if done well. Instead of replacing people, AI can make sense of the data surrounding your packaging and allow those businesses using it to act on the insights provided.

With the new EPR legislation and cost pressures combining, 2024 could be the year when many businesses identify returnable packaging as a way to reduce costs.

While several brands are exploring the idea of returnable packaging, many consumers already appear ready. In fact, 66% indicate they would return packaging if businesses covered the expense.

Even considering this trend, if businesses can take a long-term view of their packaging costs, many will realise that it offers one of the most underused opportunities for reducing costs. Besides reducing the volume of packaging required, reusable packs are only subject to the EPR fees when first placed on the market. And whilst several barriers remain (including changes to storage requirements, buying processes, the wider supply chain, etc.), taken over the pack’s lifetime, the savings can be significant.

eCommerce sales will return to the pre-pandemic trend in 2024. While this means an end to the wild highs and lows of the last few years, it does point towards a solid underlying upward trend (with expected growth in double digits through to 2027).

After the difficulties eCommerce sellers have encountered, the ongoing growth is still likely to pose challenges. Warehouse space is already at a premium and will likely see continued cost increases. Availability of skilled labour and picking staff is another potential issue.

All this means that businesses must ensure that their inventory management systems, and particularly their picking bins and stock layout, are fit for purpose. Neglecting this could see companies failing to capitalise on these opportunities.

2024 could finally be the year when sustainable foams, including the new wood-based Fibrease, will finally begin to gain traction.

Plastic foams are now viewed by some consumers and industry sectors as a problem, particularly with the launch of the Plastic Packaging Tax (and the fact that they decompose very slowly). So, whilst specific applications will always require plastic foams – and there are several plastic foams with recycled content – a switch to plant-based foams could begin in earnest.

Gift sets, cosmetics packaging and similar uses could likely begin using wood-based foams in the early part of the year, with the trend accelerating throughout 2024. The advantages to businesses and consumers are improved sustainability alongside considerably easier recycling.

The defence sector saw considerable growth across 2023, which most predict will continue into 2024.

Increasing regional conflicts, international terrorism, and other geopolitical challenges are all likely to see defence spending increase. Modernisation and advancements in military technology are other significant factors supporting the market expansion. This growth directly impacts the packaging for various equipment, typically using high-performance protective cases and foam inserts.

Other defence standard packaging, such as fibreboard boxes, Trimite and even timber cases, is also likely to see increased demand throughout the next 12 months.

The protective case market has not been immune to the cost pressures seen across other parts of the packaging industry in the past 12 months.

There is now a trend towards new brands entering the market, offering budget cases to tempt businesses to switch from the more established options such as Peli, Explorer and Storm cases. One such example is B&W – a range of waterproof cases that provide performance and features equivalent to the more well-known brands but at a considerably lower cost.

With businesses facing continuing cost pressures as we move into 2024, this could be the year that more and more businesses assess whether they can use alternative case brands without sacrificing performance or usability.

The economy and the performance of the packaging market are intrinsically linked. Put simply, if UK businesses are manufacturing and/or selling fewer products, then less packaging is required.

Yet it is predicted that UK living standards will stagnate in 2024. Mortgage rates, sluggish wage growth and the current tax burden mean UK workers are to suffer the worst fall in incomes over a five-year period since the 1950s, meaning that the economic picture does not look particularly rosy.

However, businesses and packaging suppliers must resist the temptation to feel downhearted. A general election, major football tournament and falling inflation all provide some cause for optimism as we enter 2024.

Similarly to the macroeconomic outlook, manufacturing in the UK also faces sluggish growth and an uncertain 2024. Trade body Make UK expects output to fall 0.5% in 2023, down from its June forecast for a 0.3% drop, and grow just 0.5% in 2024.

However, after holding back during the pandemic years, many businesses are now considering whether to invest in new equipment, people, and infrastructure to position themselves for an improved economic picture towards the end of next year. Falling interest rates could also stimulate investment in the sector.

Regardless, 2024 has the potential to get off to a slow start before stabilising and returning to growth in the second half of the year.

While the packaging predictions for 2024 may be somewhat mixed, with both positive and negative trends expected, there remains tremendous opportunity for businesses in 2024.

If the predictions put forward by GWP’s packaging experts prove accurate, then the result could be more sustainable, interactive, inclusive and cost-effective packaging for your business.

And, if you are facing any challenges relating to the likely packaging trends in 2024, our specialists are on hand to help. Please get in touch to see how your packaging can provide a genuine competitive advantage over the coming 12 months.

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