By 2030, the focus of the global consumer marketplace will have shifted to Asia and the middle class of its growing cities. Products and services will become digital, but demand will also grow in another rising segment: renewable biomaterials.
In 2030, as envisioned by futurologists, people will travel in self-driving cars, gyrocopters will handle consumer home deliveries, and sensors integrated into clothing will monitor our wellbeing. Digital and AI-based technology has developed so rapidly that the future is now difficult to predict even within a timeframe as brief as a few years. Senior industry expert Peter Berg from McKinsey & Company is well acquainted with global consumer trends in paper and forest products. He predicts that consumers in 2030 will have access to a considerable number of products and services that no one today can even imagine.
“The fact that just 15 years ago we did not have iPhones or Facebook demonstrates the pace of development quite well.”
The general direction is nevertheless clear. As the world economy shifts its centre of gravity to Asia, so will consumption.
The rising middle class
The main driver for global consumption in the coming years will be the growing and increasingly wealthy middle class of Asia and other developing economies. Their number is growing in China, but also in India, Indonesia and Vietnam.
According to the US-based Brookings Institution, the global middle class population numbered 3 billion in 2015. The figure is expected to grow to 5.4 billion by 2030.
Most of this growth will come from Asia, where two thirds of the world’s middle class will live in 2030. The Brookings definition of the global middle class is any household with a per capita income of 11–110 US dollars per person per day.
Urbanization drives consumption
Megatrends like urbanisation and population growth have a major impact on consumption.
The UN estimates that the world’s population will increase by one billion by 2030, reaching a total of 8.6 billion people.
“By that time, 60% of the world’s population will be living in cities,” says Peter Berg.
Meanwhile the population is aging rapidly, particularly in industrialised countries. The proportion of senior citizens will also grow in the developing markets in coming decades.
According to the UN, there are approximately one billion people over 60 in the world today, a number expected to rise to 2.1 billion by 2050.
Consumers want tailored services
The needs and purchasing habits of consumers vary by country, but Berg sees many common denominators in consumer trends.
“Consumers all around the world are looking for easier, effortless ways of buying. They are also looking for products that are tailored to their needs.”
Digitalization and technological advancement will help meet the changing needs of consumers. A growing percentage of products and services will continue to be purchased through electronic channels.
Another global consumption trend is that people no longer necessarily want to own the things that they use.
“In addition to car sharing, the sharing of other products and services will become more commonplace over the coming years.”
More tissues and smart packaging
Changes in the consumer marketplace will also have significant effects on the demand for forest industry products, says Peter Berg.
“As consumers spend more time using digital channels, the media and advertising industries’ demand for printing paper will continue to decrease. But the growing purchasing power of the middle class, along with urbanization, will increase demand for fibre-based products.”
These include tissue-based hygiene products like toilet paper, paper towels and paper tissues.
The demand for paperboard and other packaging materials will also grow. This trend is influenced by changing consumption habits in developing economies. Instead of the traditional street market, consumers are increasingly looking to buy packaged groceries from supermarkets. Electronic commerce is also increasing the demand for packaging materials.
Smart technology is rapidly making its way into packaging materials. Smart packaging and labels with embedded sensors provide vital shipping information that can be analysed and utilised using digital systems.
“New technology will also improve food safety. For example, a sensor on a milk carton can indicate if the product was kept cool throughout the transport chain.”
Bioeconomy answers global challenges
According to Berg, the Earth’s limited capacity will have a substantial impact on consumption trends over the coming years. As the population and consumption grow, the use of raw materials and the recycling of used materials must be enhanced.
More renewable raw materials will also have to be used in production to replace fossil materials and other non-renewable natural resources.
“Biomass and biomaterials will play an increasing role in the circular economy and the innovations related to it,” says Berg.
He explains that wood-based materials will be more commonly used in different areas such as construction. In general, urbanization will require more sustainable construction practices. And, as products and processes evolve, wood as a construction material offers advantages, in cost, speed of construction, and sustainability.
“And as research and product development continue, it is also likely that biochemicals and other materials manufactured from wood-based raw materials can viably compete with products such as oil-based plastics in many areas.”