Converted Flexible Packaging

US demand to exceed $18 billion in 2015
Demand for converted flexible packaging in the US is expected to exceed $18 billion in 2015. Gains will reflect a rebound in the US economy and will be supported by cost, performance and source reduction advantages over most rigid packaging formats. Rising demand for convenience-oriented and other further processed food items, which often use more costly higher barrier packaging materials for extended shelf life, will also propel growth.

Converted flexible packaging’s source reduction capabilities will be increasingly advantageous in light of initiatives by major retailers and packaged goods firms to evaluate the packaging used by their suppliers in terms of eco-friendliness and cost reduction.

Pouches to exhibit aboveaverage annual gains
Above-average gains for pouches will be driven by continued conversions to standup pouches and healthy gains for flat pouches in a number of markets. Demand will also benefit from the presence of convenience features (e.g., zippers, spouts) and the emergence of new applications and product types, such as flat-bottomed, side-gusseted pouches and hybrid pouch/folding carton products. In addition, stick pouches will experience rapid growth in single-portion packaging uses based on advantages of product differentiation and portability.

Growth for bags will increase at a faster pace than in the 2005-2010 period based on an expected recovery in the US economy from the 2007-2009 recession. However, gains will lag the overall converted flexible packaging average due to the maturity of many applications along with competition from pouches and rigid packaging. While demand for paper bags and sacks will be constrained by performance limitations relative to plastic bags and sacks, growing efforts by packaged goods firms to demonstrate their commitment to sustainability will lead to some degree of renewed interest in paper, which possesses such qualities as renewability, recyclability and compostability.

Demographic, eating trends to benefit food applications
Above-average growth in food applications will be driven by the need for more costly films for extended shelf life along with demographic trends such as increased numbers of single-person and empty nest households and households where all adults work. These trends will boost demand for food in smaller package sizes and more convenient foods designed to reduce food preparation time. Trends toward healthier eating and increased “on-the-run” eating will spur food manufacturers to expand their offerings of products, especially snacks, baked goods and beverages, in singleserving packages. Such products require more packaging than standard packages of similar items. The fastest growing food packaging markets for converted flexible packaging will be beverage, meat and related products, and snack food uses.

In nonfood applications, advances will be led by above-average gains in the pharmaceutical and medical product markets based on heightened barrier requirements, cost and convenience advantages, and adaptability to growing unit-of-use requirements. Moreover, benefits including product visibility, pilferage protection and good barrier properties will support continued demand in a broad range of uses.

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PRESS RELEASE

US Demand for Converted Flexible Packaging to Exceed $18 Billion in 2015

Demand for converted flexible packaging is projected to increase 3.8 percent annually to $18.2 billion in 2015. Gains will be similar to the pace of the 2005-2010 period based on the now more well-established presence of pouches in a number of food and nonfood markets coupled with overall deceleration in raw material price growth. Converted flexible packaging’s source reduction capabilities will be increasingly advantageous in light of initiatives by major retailers and packaged goods firms to evaluate their packaging in terms of eco-friendliness and cost reduction. These and other trends are presented in Converted Flexible Packaging, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

Pouches will experience above-average advances, with demand expected to increase 4.6 percent yearly to $8 billion in 2015. Growth will be driven by continued conversions to stand-up pouches and healthy gains for flat pouches in a number of markets, along with a smaller environmental footprint due to light weight and reduced material use, which also holds down shipping costs. Additionally, the aging of rigid packaging equipment will create openings for replacements by pouch packaging equipment over the coming decade.

Gains for bags will be moderated by the maturity of many applications along with competition from pouches and rigid packaging. Still, advances will represent an improvement from the 2005-2010 performance based on the expected recovery in the US economy. Plastic bag demand will outpace that of paper bags due to cost and performance advantages, along with widespread usage in baked goods, produce, meat, frozen food and grain mill product applications. However, growing efforts by packaged goods firms to demonstrate their commitment to sustainability will lead to some degree of renewed interest in paper, which possesses such qualities as renewability, recyclability and compostability.

Converted flexible packaging demand in food applications is projected to climb 4.0 percent per year to $12.9 billion in 2015. Advances will be driven by favorable demographics and rising demand for convenience-oriented and other processed food items, which often use more costly higher barrier packaging materials for extended shelf life. The fastest gains are anticipated in beverage, meat and related products, and snack food applications. Demand in nonfood markets is projected to increase 3.2 percent per year. Advances will be led by above-average gains in the pharmaceutical and medical product markets.