The packaging industry faced major challenges in 2024, from escalating material costs and stringent sustainability mandates to soaring energy prices, supply chain disruptions, and growing awareness of circular economy and sustainable packaging demands. Despite these difficulties, the sector demonstrated resilience through innovation and collaboration. However, the journey is far from over. In 2025, new obstacles, including persistent geopolitical instability and escalating climate-related issues on a global scale, are expected to test the industry’s adaptability further.
Although developed economies are still navigating post-COVID-19 challenges such as energy transitions and inflation, the MENA region is rapidly advancing its economic diversification efforts. Leveraging abundant energy resources, countries in the region are driving growth in manufacturing, tourism, and technology. This shift is fueling increased demand for packaging solutions across various sectors.
Key Regional Economic Drivers
One of the strongest economies in the region, Saudi Arabia, is set to benefit significantly from its successful bid for Expo 2030 and the 2034 FIFA World Cup. These global events are expected to catalyze infrastructure development, retail expansion, and increased consumer activity, further stimulating demand for packaging. Meanwhile, the UAE remains a global hub for trade, tourism, and innovation, supported by a growing real estate market, a robust financial services sector, and numerous sustainability initiatives.
In North Africa, Egypt, with its strategic location and large population, is attracting investments in manufacturing, retail, and exports, leading to growing demand for both flexible and rigid packaging 5.1% in 2025. Similarly, Saudi Arabia’s FMCG market is poised for growth, expanding from 1.5% in 2024 to 4.6% in 2025. Low inflation rates in both countries solutions. Smaller players like Morocco, and Jordan in the GCC, are experiencing growth in agribusiness, pharmaceuticals, and textiles, opening new avenues for packaging innovation.
The retail sector in MENA is gaining momentum, driven by rising populations, increasing numbers of high-net-worth individuals (HNWIs), strong business confidence, and ongoing economic diversification. Consumer spending in the UAE, for example, rose by 4.8% year on-year in Q3 2024, while Saudi Arabia’s retail market is projected to contribute significantly to its non-oil GDP by 2030.
Sectoral Growth Drivers
FMCG: The Primary Driver
The FMCG sector continues to be the main driver of packaging demand in MENA, spurred by a growing young population, higher disposable incomes, and increased health consciousness. The UAE’s FMCG market is expected to grow by 4% in 2024 and accelerate to provide a stable environment for consumer spending, further boosting the FMCG sector. Increasing demand for lightweight, durable, and recyclable packaging reflects shifting consumer preferences.
Evergreen Food & Beverage
The MENA food and beverage (F&B) industry is on a strong growth trajectory, driven by rising consumer demand, shifting food preferences, and the expansion of retail and foodservice sectors. The market is expected to grow at an annual rate of approximately 6.5% through 2028. This growth is especially prominent in the GCC countries, where the sector benefits from robust economic infrastructure, favorable business conditions, and a growing focus on health and wellness among consumers.
Packaging is integral to supporting this growth, driven by increasing demand for convenience and premium products. Innovations emphasizing sustainability and catering to consumer preferences for health conscious and convenient options are critical. Consequently, the packaging sector is expected to grow in tandem with the F&B industry, focusing on sustainable materials and functional designs that align with evolving consumer needs.
Retail and E-Commerce Trends
E-commerce in MENA is forecast to grow at a compound annual growth rate (CAGR) of over 10% by 2025, driven by increasingly tech-savvy consumers and logistical advancements. This growth is reshaping packaging needs, emphasizing protective, aesthetically pleasing, and sustainable materials. Retailers are opting for corrugated boxes, flexible packaging, and tamper evident solutions to enhance customer experience and brand value. The UAE’s thriving retail sector, particularly in Dubai and Abu Dhabi, is contributing to a demand for branded, visually appealing packaging. Egypt’s modern retail landscape is also fueling packaging innovation as new supermarket chains and online platforms emerge.
Healthcare and Pharmaceuticals
The healthcare sector in MENA is seeing rapid growth, with significant investments in pharmaceuticals and medical devices. Packaging plays a critical role in ensuring product safety, integrity, and regulatory compliance. This growth is driving demand for sterile, tamper-proof, and smart packaging solutions, particularly for temperature sensitive and high-value products.
Sustainability: A Critical Focus
Sustainability has become a key mandate for the packaging industry in MENA. Governments are enacting policies to reduce plastic waste and promote recycling, pushing companies to adopt circular economy principles, biodegradable materials, and reusable packaging designs. For example, the UAE’s new Federal Decree-Law No. 11 on carbon emissions marks a pivotal step toward net-zero goals. This legislation accelerates the transition to sustainable packaging materials and processes, positioning the UAE as a leader in environmental sustainability and setting the standard for the region’s packaging industry.
Moreover, North African countries like Morocco and Tunisia are emerging as regional leaders in sustainable packaging innovation. For instance, Moroccan manufacturers are increasingly adopting biodegradable agricultural films, while Tunisia is focusing on reducing single use plastics. These developments highlight the broader regional commitment to sustainability beyond the GCC.
Technological Advancements
Technological innovations are transforming the packaging landscape in MENA. Digital printing, smart packaging with IoT integration, and advanced barrier films are enhancing product protection, extending shelf life, and offering improved brand engagement through features like QR codes and augmented reality (AR). For example, digital printing solutions in Egypt are enabling small and medium enterprises (SMEs) to offer customized, high quality packaging at competitive costs, driving growth in the flexible packaging segment. Smart packaging, incorporating IoT and sensors, is gaining traction in the healthcare and F&B sectors, ensuring product safety and enhancing consumer experience. Advanced barrier films, crucial for extending shelf life, are increasingly in demand in MENA’s F&B industry, particularly for exports.
Industrial Packaging and Construction
The construction and industrial sectors in MENA are fueling demand for packaging materials such as stretch films, heavy duty sacks, and pallets. Major infrastructure projects, including Saudi Arabia’s NEOM and Expo 2030 developments, and Egypt’s New Administrative Capital, are driving the need for robust industrial packaging solutions. The ongoing construction boom in countries like Morocco and Tunisia further underscores the demand for durable and cost-effective packaging in these sectors.
Challenges and Opportunities
While the packaging industry in MENA is forecasted for growth, there are challenges. Fluctuating raw material prices, which account for over 60% of the region’s inputs, remain a significant concern. This reliance on imports exposes the industry to global supply chain disruptions and price volatility. Geopolitical instability, including conflicts in the region, adds another layer of uncertainty, potentially impacting cross-border trade and raw material availability. However, these challenges also present opportunities. Localizing supply chains by investing in regional raw material production could reduce dependency on imports and enhance resilience. Additionally, regulatory pressures, such as stricter environmental laws, can drive innovation in sustainable packaging solutions, enabling companies to gain a competitive edge.
Quantitative Insights
To provide a clearer picture of the industry’s trajectory, consider these statistics:
- The global packaging market is projected to grow at a CAGR of 3.9% through 2025, with MENA expected to outpace this at approximately 5.1%.
- Morocco’s agribusiness packaging segment is growing at an annual rate of 7%, driven by increasing exports.
- Egypt’s pharmaceutical packaging market is expanding at 6% annually, fueled
by rising investments in healthcare infrastructure. - Saudi Arabia’s packaging industry is expected to benefit from $1 trillion in planned infrastructure investments by 2030.
Conclusion
In 2025, the packaging industry in MENA expects significant growth, driven by economic diversification, retail expansion, and a focus on sustainability. As sectors like FMCG, F&B, healthcare, and e-commerce continue to thrive, the demand for innovative, sustainable, and technologically advanced packaging solutions will drive the future of this dynamic sector. By addressing challenges such as raw material dependency and geopolitical instability, while capitalizing on opportunities for innovation and regional collaboration, the MENA packaging industry can move towards positioning as a global leader in the years to come.
Kaunain Shahidi, Contributing editor of Packaging MEA