The foods packaging industry has witnessed a rapid growth rate as a repercussion of the increased uptake of fast food restaurants and quick service joints all over the world. With busy lifestyles and longer hours of work, people all over the world have developed an affinity for fast food. Aluminum foil is the major end product of the food packaging industry, with other allied products such as various kinds of papers used for wrapping food items.
The foil has the unique property of thermal heat preservation. It also helps keep food fresher and warmer for a longer period, as compared to regular paper wraps.
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Properties of aluminum:
Aluminum foil is also referred to as ‘tin foil’. It is essentially aluminum pressed to form leaves of a thin texture (less than 0.2 mm). It is used extensively in the food packaging industry owing to its non-ferrous and light-weight nature. It preserves the freshness and edible condition of food.
Aluminum foil is durable as well as pliable, for easily wrapping food items. Around 75% of the total production of aluminum foil is used in packaging of food, chemicals, and cosmetics; and the remaining 25% of total production is used in industrial applications such as cabling, and insulation of factory premises.
Growth traction over the years:
Due to the customizable and user-friendly features of aluminum foil, production of the material is expected to grow at a CAGR of more than 5% by 2020, thus increasing the aluminum foil market size. It has equal applications across industries owing to its multi-purpose utilities.
Apart from functional features, it is also used as a means of art and decoration by end users. Foil can be used to heat and cool food and beverages in the preparatory phases. Demand is expected to be high from developing nations like India, China, Mexico, Brazil, and Argentina owing to the rise in disposable income and development of manufacturing and industry across these countries.
The growth in the aluminum foil production is directly related to the growth in the food and beverages industry across the globe, as its major application is in the packaging industry.
Tin foil is manufactured by melting billet aluminum into rolling sheet ingots. The sheets are then rolled again in foil rolling factories at the desired thickness. Foil can be manufactured at the thickness desired by the producer, based on the end user requirement.
For example – industrial applications like insulation, electromagnetic shields, and geochemical applications require foil of a greater thickness, as compared to the food packaging or users in the cooking and art industries.
Aluminum foil can be classified by various means – by thickness (0.07 mm to 0.09 mm, 0.9 mm to 0.2 mm, 0.2 mm to 0.4 mm), by type (printed foil and unprinted foil), by applications (food, dairy, ready to eat products, beverages, pharmaceutical products and cosmetics) and by end usage (laminated foil, for tray packaging, for bags and for lids coverage).
Market size and other dynamics:
Aluminum foil has a variety of industrial applications. It is used in electric cables, radiators and as an electromagnetic shield. It possesses the property of being a good conductor of electricity, though it is non-ferrous and non-magnetic. Tin foil is also utilized by geologists to preserve rock and soil samples for further analysis. It is a suitable material for protection of the samples, as it is non-permeable and pliable.
It also has low reactivity to the material it covers. Aluminum foil production has become popular and markets have gradually developed. It was introduced initially in developed countries like the United States and European countries and was later adopted by developing nations like LATAM and APAC.
The aluminum foil production market is very fragmented with both large, mid-sized and small players competing for buyer attention. Also, the consumer market is segmented broadly as commercial or industrial and non-commercial markets.
Industrial users require foil of a greater thickness and tensile strength, while non-commercial users require foil of a lesser thickness. The end consumer markets for aluminum foil have expanded rapidly due to the higher awareness of food safety, greater disposable incomes, and a feature-rich product.
A driver that hinders the growth of aluminum foil markets apart from fragmented producers is the easy availability of substitutes of the product. Other products like cloth and paper are also used to package food products, in developing countries.
Also as the end product is similar in nature, it makes marketing and branding of tin foil all the more difficult for manufacturers and sellers. There exist many small players with competitive products in the foil manufacturing industry.
Some of the major aluminum foil manufacturers across the globe include Hindalco Industries Ltd. Pactic LLC, Eurofoil and China Hongqiao Group Limited.
The future dynamics and growth of the aluminum foil market look bright as the packaged and ready to eat food and fast food industry is on a growth path.
As it is a prime packaging material and has rich features such as flexibility, non-reactivity, and durability it is a preferred choice for packaging food products and also is a less expensive and better option for industrial usage.