Opportunity Assessment for the U.S. Flexible Packaging Industry

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Gavin Horace Horton
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1 Opportunity Assessment for the U.S. Flexible Packaging Industry A Flexible Packaging Association Report Prepared for FPA by: Jeff Bornstein, Vice President and Bruce Deckman, President Strategic Analysis Inc. Flexible Packaging Less Resources. Less Footprint. More Value.SM 2012 Flexible Packaging Association 971 Corporate Blvd., Suite 403 Linthicum, MD fax

2 Copyright 2012 by the Flexible Packaging Association. All rights reserved. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, without permission in writing from the Flexible Packaging Association. Statements of fact or opinion are made on the responsibility of the author alone and do not imply an opinion or endorsement on the part of FPA, its officers or its membership. Address all questions or inquiries to the Flexible Packaging Association, 971 Corporate Boulevard, Suite 403, Linthicum, Maryland 21090,

3 TABLE OF CONTENTS EXECUTIVE SUMMARY... 1 INTRODUCTION AND METHODOLOGY Project Objectives Scope Approach/Information Sources Organizations Interviewed INDUSTRY DESCRIPTION Packaging Formats Packaging End-Use Categories END-USE CATEGORY ANALYSIS U.S. Packaging Sales By End-Use Category U.S. Flexible Packaging Sales By End-Use Category Retail Food Packaging Dynamics Retail Food Segments Institutional Food Packaging Dynamics Retail Non-Food Packaging Dynamics Institutional Non-Food Packaging Dynamics Industrial Packaging Dynamics Medical and Pharmaceutical Packaging PACKAGING FORMAT ANALYSIS Corrugated and Paperboard Metal Can Market Plastic Bottles Glass Bottles and Jars U.S. Flexible Packaging Sales PACKAGING INDUSTRY DRIVERS CPG Trends and Drivers Consumer Trends and Drivers Technology Trends and Drivers Supply Chain Trends and Drivers International Trends and Drivers Financial Trends and Drivers Summary of Considerations in Selecting a Packaging Format... 44

4 FORECAST Forecast Methodology U.S. Packaging Sales Projection by End-Use Category U.S. Packaging Industry - Flexible Versus Rigid U.S. Flexible Packaging Sales by Format OPPORTUNITY IDENTIFICATION Opportunity for Conversion From Rgid to Flexible Packaging Examples of Recent Conversions to Flexible Packaging Examples of Opportunities: Retail/Institutional Food - Cans: Soups, Vegetables, Other Retail Food Glass Highly Processed Foods, Fruits, Other Retail Food Plastic Bottles Non-Carbonated Beverages Retail Non-Food e.g., Toys Retail Non-Food Detergents Retail Non-Food Personal Care Industrial Agricultural Chemicals Institutional Food Bulk Dried Fruit Institutional Non-Food Military Crate Replacement OVERALL ASSESSMENT Key Findings for Flexible Packaging Key Market Drivers to Monitor Movement of Packaging Formats Summary of Opportunities to Pursue Conclusion APPENDIX: CONTACT DETAILS... 65

5 Exhibits Exhibit 1, Projected U.S. Packaging Sales... 1 Exhibit 2, Total U.S. Packaging End-use Segment Growth Exhibit 3, Key Findings for Flexible Packaging... 6 Exhibit 4, Total Packaging Sales Value by End-Use Category Exhibit 5, U.S. Flexible Packaging Sales by End-Use Category Exhibit 6, Retail Food Packaging Exhibit 7, U.S. Census Bureau Retail Segments Data Exhibit 8, Institutional Food Packaging Exhibit 9, Retail Non-Food Packaging Exhibit 10, Institutional Non-Food Packaging Exhibit 11, Industrial Packaging Exhibit 12, Medical and Pharmaceutical Packaging Exhibit 13, Package Value Exhibit 14, Corrugated and Paperboard Production Exhibit 15, Metal Can Exhibit 16. Rigid Plastic Bottle Sales Exhibit 17, Glass Bottles and Jars Exhibit 18, Materials Have the Greatest Effect on Unit Cost Exhibit 19, Summary of Considerations in Selecting a Packaging Format Exhibit 20, U.S. Packaging Industry by End-Use Category Exhibit 21, Projected Packaging Sales Exhibit 22, Key Findings for Flexible Packaging... 59

SECONDARY PACKAGING MARKET RESEARCH STUDY

R E C Y C L E D F I B E R S C O R R U G AT E D F I B E R B O A R D W R A P - A R O U N D S H R I N K W R A P B L I S S B O X R S C SECONDARY PACKAGING MARKET RESEARCH STUDY 11911 Freedom Drive Suite 600