What’s in store for 2025 and the food packaging industry? At Cater For You we are looking to quite a number of factors that are going to be having substantial impacts on the food to go business and our food packaging customers.
The first and most important factor for the industry is just how viable it is going into 2025. We speak daily to customers who are struggling with the effects of fewer customers and significantly increased costs. Whilst the attrition rate for new business is always fairly high, Kate who manages our social media has seen a number of established customers shutting up shop for good.
Retails Costs in 2025
So what does the outlook for 2025 look like for our customers and their input costs and their ability to pass them onto their customers? There is some good news in that core packaging prices seem to be stabilising and even dropping from some suppliers. We’ve had notice from a couple of our suppliers that prices will be dropping in the New Year and the behemoth of the industry Bunzl who recently reported their annual figures also noted that packaging prices were falling.
Import Logistics Costs in 2025
We contacted Aver Logistics in Chenies who are experts in freight forwarding for their views on freight costs from our major overseas packaging import hotspots of China, India and Turkey and they said “Freight costs went through the roof in 2024 because of geopolitical issues, but for 2025, we’re expecting rates to stay fairly flat. Overcapacity from the new containers built during Covid has meant demand hasn’t outstripped supply, especially on routes from China to the UK.”
Whilst commenting on their freight services from China, they made a very interesting note of a new but possibly controversial route opening up which could slash the cost importing from China saying “Our rail freight service from China to the UK, which passes through Russia, has been a strong alternative to ocean freight. It’s quicker than sea and more reliable than air for many industries. We’re expecting it to remain a great option in 2025 for businesses needing a balance of speed and cost efficiency, even with the complexities in that region.”
UK Food Packaging Manufacturers
These freight developments could be a boon for our customer packaging costs from imported sources but at Cater For You, we are strong believers in sourcing from our domestic manufacturers of which there are plenty. During covid they had to contend with energy and raw imported material prices going through the roof. We are hoping macroeconomic factors won’t impact them too much but not sure how they can avoid passing on the increased costs of the minimum wage, employers NI, raw material increases from import tariffs, increases in business rates, EPR and business regulation.
EPR Tax / The Grocery Tax
The biggest regulation factor that is coming for manufacturers and importers is the Extended Producer Responsibility (EPR) tax, also dubbed the Grocery Tax by the mainstream and social media – and applies to all forms of packaging ie not just food packaging. The guiding principle for this new tax is that the polluter pays for the recycling and waste of their packaging and will be used to fund the waste industry. At the recent FPA environmental conference, Matt Crocker of the Environmental Services Association (ESA) stated that 18% of all waste in England may be illegally managed, with 92 organised crime groups actively involved in environmental crime.
Cater For You is looking for the EPR tax to address the UK’s waste profile and make doorstep recycling more consistent across the country, better waste and recovery facilities and anti litter campaigns to stop plastic, glass bottles, aluminium cans and all other waste ending up in the UK’s hedgerows and water systems.
Andy Watts said “The EPR is a significant burden to the UK packaging industry, increasing costs and significant work to upgrade internal reporting systems but we hope that the Government sticks to the mandate that the money will be used to improve the UK’s waste management and not go straight into the black hole of government finances and DEFRA’s bureaucracy. The EPR will lead to higher food packaging prices for our customers once the charges come into effect and people will want to see something in return for that”
In terms of the use and trends in packaging in 2025, we foresee similar patterns to previous years driven by our retail customers and government legislation. The ongoing migration from plastics to paper or types of cardboard is ongoing and welcome, especially coupled with the waste management improvements from the EPR tax.
The linings of packaging products have been in sharp focus over recent months with the EU looking at legislation and awareness with their turtle logo. Linings are used widely in paper / board take away food boxes and disposable cups to make the product leakproof, an essential feature for the food to go market. The linings are made from PE or a water based Aqueous lining but are still a plastic.
PFAS, Per- and polyfluoroalkyl substances are used in some packaging to give leakproof and oil resistant properties to board and bagasse. We have noted a new campaign by some suppliers (in particular Biopak) to highlight these and remove them from the food and waste chain.
New Packaging Developments
As always, this exciting industry we work in has been innovating and new entrants to the market have produced new linings that are free of any plastics which may leach into the soil or water. Amongst these new entrants are Notpla who use a Seaweed based product that retains the leakproof properties of traditional plastic linings and is fully compostable. With any new exciting development, we are waiting for the prices to drop as the product is produced at scale and not impacting our already stretched food to go customer cost base.
Bespoke Printed Food Packaging and Labels
Cater For You has provided a bespoke labelling service for over 10 years, but digital print technology and food safe inks have developed substantially since then. Most food packaging products can now be bespoke printed for customers to have strong branding and market visibility, particularly important with social media influencers posting photos on-line. The minimum order quantities are also now much lower, but the best prices are still available for larger print runs.
Phil Stears said “if you wander around any food market you will see that most of the food to go outlets are now supplying their food in bespoke printed packaging, clear branding and photo opportunities for social media presence, we were delighted to help many customers this year with their custom printed food packaging”.
2025 Predictions Summary
To sum up what 2025 is likely to bring Director Andy Watts said “our customers are struggling to keep going with pressures from all parts of their business. We are hopeful that early 2025 will see some price reductions in food packaging but government legislation and taxes will ramp up the pressure as the year progresses. The steady flow to cardboard products from plastic will continue with eco friendly products the order of the day. On a more British note, we hope the weather will be drier and sunnier than 2024 to encourage people out and about to festivals, markets and try some of the great products that our customers supply”
Phil went on to say “we having a number of exciting plans for 2025 and are looking forward to supporting our fabulous customers again through the year”.
We wish all our customers and suppliers a happy and prosperous 2025 and are on hand to help with your requirement however large or small.
