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Packaging (Food and Drink)Published by: Key Note Publications Ltd Published: Sep. 1, 1999 - 70 Pages Table of ContentsExecutive Summary
AbstractFood and drink packaging was worth around £6.3bn in 1998 and accounts for 54.8% of the total packaging market, which has an estimated value of £11.5bn. Paper and board represents the largest sector of the food and drink packaging market, followed by plastics, metal and glass. The contribution from wood is considered to be negligible and is thus excluded from the total. The food and drink industries in the UK are operating in mature markets. Volume consumption is only slowly growing and end users are very resistant to price increases which are not related to the normal fluctuations in material costs. There is oversupply of all the materials used by the packaging markets but the repercussions of oversupply are most acutely experienced by the paper and board industry.Demand for plastic materials has increased and plastic's share in the food and drink packaging industry has grown steadily. Several leading companies that once specialised in paper and board products, e.g. Waddington PLC and Rexam PLC, have decided to concentrate more effort and resources into developing their involvement in plastics, and this is a trend that others may follow. The metal and glass packaging industries are more narrowly focused on the manufacture of containers than the paper and board and plastics industries. Steel and aluminium cans are primarily used for the long-term storage of food and pet foods, and for single-serve drinks. There are very few volume markets left for glass containers -- although the milk bottle is an exception -- and the glass packaging industry is concentrating on supplying the premium, higher value, low-volume prestige markets in foods and alcoholic drinks. Although not immune from potential competition from paper, board and plastic, the metal and glass container manufacturers have relatively stable, but only slowly expanding, niche markets. A slower rate of market growth is anticipated and all manufacturers are seeking to reduce the cost of their materials: paper and board is being made thinner and lighter, as are the metals used in can manufacture, the glass in glass containers and the plastic used for making flexible film and in semi-rigid and rigid containers. Specifiers and end users are also insisting on a general reduction in the use of packaging materials but so far, unlike in some continental European countries, there is no insistence on making the packaging reusable in its original form, but only through reclamation and recycling. However, recently introduced UK packaging laws have wide ramifications on the operations of the packaging industry, as they are designed to force reductions in packaging and packaging waste. The cost of implementation and compliance will make packaging more expensive and consumers will be affected by these changes. Key Note expects that the market size for food and drink packaging will grow from an estimated £6.5bn in 1999 to £7.6bn in 2003, giving a total growth of 16.9%. Some of the apparent increase in value will be due to additional reprocessing costs that will be recovered from the consumer, and some to a genuine increase in market value as the volume of business slowly grows over the next 5 years, e.g. due to population growth. |
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