World demand to rise 3.6 % annually through 2013 Worldwide demand for converted flexible packaging is forecast to grow 3.6 percent per year to over 19 million metric tons in 2013, faster than real (inflation-adjusted) gains in GDP. Factors contributing to rising converted flexible packaging demand include growth in food and beverage shipments, which represent the largest market by far. In addition, costperformance and source reduction advantages, as well as ongoing developments in high-barrier resins and valueadded features, will continue to favor flexible packaging products over their rigid counterparts.
However, gains will be limited by the mature state of the packaging industry in developed areas such as the US, Western Europe and Japan, where the main markets for flexible packaging (i.e., food, pharmaceuticals, cosmetics) are well established. Material downgauging will also restrain volume gains. Nonetheless, demand for converted flexible packaging will benefit from the products’ environmentally friendly image (as they are often associated with reduced packaging efforts), as well as cost advantages compared to rigid containers -- especially considering their lighter weight (which imparts transportation cost savings), their smaller sizes (which impart storage space savings) and their lower energy requirements during production.
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China and India to exhibit the fastest growth The fastest increases will occur in the world’s developing regions. Asia, Latin America, Eastern Europe and the Africa/ Mideast region will all outpace the global average. Some of the best gains are expected in China, which has now surpassed Japan as the world’s second largest converted flexible packaging market (behind the US); and India, which will benefit from strong growth in domestic output and consumer product markets, as well as greater investment in state-of-the-art manufacturing equipment, resulting in improved product quality. Population growth, greater urbanization and industrialization, and expanding international trade will support advances in these regions’ generally underdeveloped packaging sectors. Rising consumer income levels and expanding middleclasses will also generate robust internal demand for packaged consumer goods like processed foods, beverages, pharmaceuticals and personal care items, supporting increases in converted flexible packaging consumption.
Product innovation to boost global demand Developments in flexible packaging films, such as breathable properties, biodegradable films and high-barrier resins, will support demand in new and existing applications, particularly in the food and pharmaceutical industries. New value-added features, including microwavable pouches, resealable stand-up pouches and pouring spouts, will reflect increasing consumer preference for convenience processed food items, especially in developed countries.
Plastic films, which account for almost three-quarters of global converted flexible packaging material demand, will continue to make inroads at the expense of paper and aluminum foil. Plastics will benefit from a superior price/performance profile, versatility, and efforts to improve sanitation and extend product shelf lives in the food and beverage, pharmaceutical and personal care markets.
Study coverage Details on these and other findings are contained in World Converted Flexible Packaging, a new Freedonia industry study available for $5600. It presents historical demand data (1998, 2003 and 2008) plus forecasts for 2013 and 2018 in metric tons by material, market and for 6 regions and 20 countries worldwide. The study also considers market environment factors, evaluates company market share and profiles 43 competitors in the global industry.
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