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Paper Versus Plastic in Packaging

Plastic packaging to make further inroads into paper
In 17 selected markets where plastic and paper compete as packaging materials, plastic is expected to increase its share of the market to 49 percent (in pounds) in 2014 as it makes further inroads into paper applications. The percentage understates plastic’s share since less plastic is required than paper in most applications due to its lighter weight. In addition, plastic has greater ability for lightweighting than does paper. Plastic has made the greatest gains in primary packaging but remains much less significant than paper and paperboard in secondary packaging and shipping containers.

Plastic packaging growth to outpace paper packaging
Plastic packaging growth by volume is expected to outpace that of paper packaging through 2014 in nearly all competitive markets covered in this study and is forecast to expand 2.3 percent per year through 2014. Advances for plastic will be the result of its competitive cost and performance advantages, including light weight, moisture resistance, enhanced barrier properties and puncture resistance. Plastic has continued to expand its share in a number of markets despite the sharp spike in resin prices in recent years. More moderate resin pricing through 2014 and the development of new applications for biodegradable plastics should make plastic even more competitive against paper.

Though paper packaging will post more limited advances or continue to decline in the majority of markets through 2014, paper will log relatively favorable gains in a handful of markets and maintain a substantial lead over plastic. These markets include foodservice, protective packaging, and soy and other nondairy beverages. Opportunities in the foodservice and protective packaging markets will also reflect improved outlooks for consumer spending and manufacturing activity. Moreover, increased emphasis on packaging sustainability will enhance the competitiveness of paper in some applications based on environmental advantages including recyclability, renewability and biodegradability.

Rigid packaging to grow slightly faster than flexible
Rigid packaging demand in competitive markets will expand at a slightly faster pace than that of flexible packaging based on above-average growth for tubs and cups, trays and other plastic containers such as clamshells and two-piece high visibility plastic containers. Gains will also be helped by rebounds in demand for shipping drums and protective packaging following a depressed base in 2009. Based on the widespread use of products such as folding and gabletop cartons, ovenable trays and paper-based protective packaging, paper will maintain its lead over plastic in rigid packaging through 2014. However, plastic will continue to gain ground in competitive rigid packaging.

Flexible packaging gains will be aided by above-average growth for protective packaging and pouches. Improved manufacturing output and Internet sales will bode well for products such as air pillows and bubble packaging, which provide cost-effective options in the protection of goods from shock, vibration, abrasion and other damaging effects of shipping and handling. Pouches will make further inroads into rigid packaging and other types of flexible packaging based on attributes of cost effectiveness, enhanced barrier properties, space savings, lighter weight, aesthetic appeal and source reduction capabilities.

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PRESS RELEASE

PLASTIC PACKAGING CONTINUES TO MAKE FURTHER INROADS INTO PAPER PACKAGING APPLICATIONS

In selected packaging markets where paper and plastic compete, plastic will increase its overall volume share as it makes further inroads into paper applications. Plastic’s share will expand more slowly than in the 2004-2009 period due to the maturity of a number of applications in terms of the share controlled by plastic. Nonetheless, material enhancements providing extended shelf life and increased durability, along with reduced material requirements and the addition of convenience features such as resealability and microwaveability, will fuel continued opportunities for plastic packaging. These and other trends are presented in Paper versus Plastic in Packaging, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Advantages of light weight, moisture resistance, good barrier properties, clarity and puncture resistance will enable plastic to outpace paper packaging through 2014 in nearly all competitive markets. Improvements in resealability, microwaveability and other characteristics will also continue to drive plastic expansion. Demand for plastic in competitive packaging markets is projected to increase 2.3 percent annually through 2014, an acceleration from the 2004-2009 period as manufacturing output improves from a depressed base in 2009. Plastic has continued to expand its share in a number of markets despite the volatility of resin prices in recent years. More moderate resin pricing through 2014 should make plastic even more competitive.

Overall paper demand in competitive markets is expected to increase 1.0 percent annually through 2014, rebounding from the 2004-2009 pace due to an upswing in manufacturing activity and an improved outlook for consumer spending. Nonetheless, paper consumption in most markets will post limited gains or continue to decline through 2014. However, paper demand will expand at an above-average pace in the soy and other nondairy beverage, protective packaging and foodservice markets. Opportunities for rigid packaging will also be driven by rebounds for shipping drums and protective packaging based on heightened manufacturing output and the continued proliferation of Internet shopping.

INTRODUCTION
I. EXECUTIVE SUMMARY
II. MARKET ENVIRONMENT
General
Macroeconomic Outlook
Demographic & Household Trends
Consumer Income & Spending
Retail Sales
Manufacturing Outlook
Nondurable Goods
Food Industry Outlook
Beverage Outlook
Chemicals & Other Nondurables
Durable Goods
Historical Market Trends
Raw Material Pricing Trends
Paper & Paperboard
Plastic
Environmental & Regulatory Considerations
Recycling Trends
III. PACKAGING OVERVIEW
Competitive Packaging Variables
Performance
Pricing
Aesthetics & Marketing Value
Packaging Types
Rigid Containers
Folding & Other Cartons
Protective Packaging
Bottles
Tubs & Cups
Trays
Drums
Other Rigid Containers
Flexible Packaging
Bags & Wraps
Retail Bags & Sacks
Protective Packaging
Shipping Sacks
Pouches
Packaging Materials
Competitive Growth
Paper Packaging
Plastic Packaging
IV. COMPETITIVE PRODUCT PACKAGING
General
Meat, Poultry & Seafood
Plastic
Flexible Packaging
Trays
Rigid Containers
Paper
Milk
Plastic
Paperboard
Dairy Products
Plastic
Rigid Containers
Flexible Packaging
Pouches
Paper
Fruit Beverages
Plastic
Bottles
Pouches & Cans
Paper
Laundry Detergents
Plastic
Paperboard
Baked Goods
Plastic
Flexible Packaging
Rigid Containers
Paper
Egg Cartons
Plastic
Molded Pulp
Candy & Confections
Paper
Plastic
Flexible Packaging
Rigid Containers
Pet Food
Paper
Plastic
Frozen Food
Paper
Rigid Containers
Trays
Flexible Packaging
Plastic
Flexible Packaging
Trays
Pouches
Foodservice
Paper
Rigid Containers
Flexible Packaging
Plastic
Dry Food
Paper
Plastic
Flexible Packaging
Rigid Containers
Soy & Other Nondairy Beverages
V. COMPETITIVE SHIPPING & RETAIL PRODUCTS
General
Drums
Plastic
Characteristics
Producers
Fibre
Characteristics
Producers
Retail Bags & Sacks
Plastic
Paper
Protective Packaging
Paper
Plastic
Shipping Sacks
Paper
Characteristics
Producers
Plastic
Characteristics
Producers
VI. INDUSTRY STRUCTURE
General
Market Leaders
Plastic
Flexible Packaging
Rigid Packaging
Paper
Shipping & Retail Products
Acquisitions & Divestitures
Manufacturing & Product Development
Marketing & Distribution
Competitive Strategies
Cooperative Agreements
Company Profiles
Accredo Packaging, see Advance Polybag
Advance Polybag Incorporated
Alcan Packaging Food Americas, see Bemis
Amcor Limited
Associated Packaging Technologies, see Sonoco Products
BagcraftPapercon, see Packaging Dynamics
Bemis Company Incorporated
Berry Plastics Corporation
Biosphere Industries, see Sealed Air
Bryce Corporation
Caraustar Industries Incorporated
Consolidated Container Company LLC
Constar International Incorporated
Cryovac, see Sealed Air
Curwood, see Bemis
Dart Container Corporation
Dolco Packaging, see Tekni-Plex
DuPont (EI) de Nemours
Duro Bag Manufacturing Company
Evergreen Packaging Group, see Reynolds Group
Exopack Holding Corporation
Fold-Pak, see Rock-Tenn
Georgia-Pacific, see Koch Industries
Graham Packaging Company Incorporated
Graphic Packaging Holding Company
Greif Incorporated
Hilex Poly Company LLC
Hood Companies Incorporated
Huhtamaki Oyj
International Paper Company
Johnson Bryce, see Bryce
Koch Industries Incorporated
MAUSER AG
MeadWestvaco Corporation
Milprint, see Bemis
Newspring Industrial, see Reynolds Group
Packaging Dynamics Corporation
Pactiv, see Reynolds Group
Plastipak Holdings Incorporated
Pliant, see Berry Plastics
Printpack Incorporated
PurePlast, see Tekni-Plex
PWP Industries, see Reynolds Group
Reynolds Group Holdings Limited
Rio Tinto Group
Rock-Tenn Company
RTS Packaging, see Rock-Tenn and Sonoco Products
Sealed Air Corporation
Shorewood Packaging, see International Paper
SIG Combibloc Group, see Reynolds Group
Silgan Holdings Incorporated
Smurfit-Stone Container Corporation
Solo Cup Company
Sonoco Products Company
Superfos Packaging, see Berry Plastics
Tekni-Plex Incorporated
Tetra Laval International SA
Thilmany Papers, see Packaging Dynamics
Weyerhaeuser Company
Other Companies in Paper & Plastic Packaging
LIST OF TABLES
SECTION I -- EXECUTIVE SUMMARY
Summary Table
SECTION II -- MARKET ENVIRONMENT
1 Macroeconomic Indicators
2 Population & Households
3 Personal Consumption Expenditures
4 Retail Sales
5 Manufacturers’ Shipments
6 Nondurable Goods Shipments
7 Food Shipments
8 Beverage Shipments
9 Durable Goods Shipments
10 Paper & Plastic Packaging Market, 1999-2009
11 Paperboard Pricing
12 Plastic Resin Pricing
SECTION III -- PACKAGING OVERVIEW
1 Competitive Paper & Plastic Packaging Demand by Type
2 Rigid Competitive Paper & Plastic Packaging Demand by Type & Material
3 Flexible Competitive Paper & Plastic Packaging Demand by Type & Material
4 Competitive Paper & Plastic Packaging Demand by Material
5 Competitive Paper & Plastic Packaging Demand by Market, 2009
6 Competitive Paper Packaging Demand by Market
7 Competitive Plastic Packaging Demand by Market
SECTION IV -- COMPETITIVE PRODUCT PACKAGING
1 Competitive Plastic Packaging Demand
2 Meat, Poultry & Seafood Market for Competitive Paper & Plastic Packaging
3 Milk Market for Competitive Paper & Plastic Packaging
4 Plastic Milk Packaging Demand
5 Paperboard Milk Carton Demand
6 Dairy Product Market for Competitive Paper & Plastic Packaging
7 Fruit Beverage Market for Competitive Paper & Plastic Packaging
8 Plastic Fruit Beverage Packaging Demand
9 Paperboard Fruit Beverage Container Demand
10 Laundry Detergent Market for Competitive Paper & Plastic Packaging
11 Baked Goods Market for Competitive Paper & Plastic Packaging
12 Competitive Paper & Plastic Egg Carton Demand
13 Plastic Egg Carton Demand
14 Molded Pulp Egg Carton Demand
15 Candy & Confection Market for Competitive Paper & Plastic Packaging
16 Pet Food Market for Competitive Paper & Plastic Packaging
17 Frozen Food Market for Competitive Paper & Plastic Packaging
18 Foodservice Market for Competitive Paper & Plastic Packaging
19 Dry Food Market for Competitive Paper & Plastic Packaging
20 Soy & Other Nondairy Beverage Market for Competitive Paper & Plastic Packaging
SECTION V -- COMPETITIVE SHIPPING & RETAIL PRODUCTS
1 Competitive Shipping & Retail Products Demand
2 Competitive Shipping Drum Demand
3 Plastic Shipping Drum Demand
4 Fibre Shipping Drum Demand
5 Competitive Retail Bag & Sack Demand
6 Plastic Retail Bag & Sack Demand
7 Paper Retail Bag & Sack Demand
8 Protective Packaging Market for Competitive Paper & Plastic Packaging
9 Competitive Shipping Sack Demand
10 Paper Shipping Sack Demand
11 Plastic Shipping Sack Demand
SECTION VI -- INDUSTRY STRUCTURE
1 Selected Competitive Paper & Plastic Packaging Companies
2 Selected Acquisitions & Divestitures
3 Selected Cooperative Agreements
LIST OF CHARTS
SECTION II -- MARKET ENVIRONMENT
1 Paper & Plastic Packaging Market, 1999-2009
2 Paper, Plastic & Thermoplastic Resin Pricing, 1999-2009
SECTION III -- PACKAGING OVERVIEW
1 Rigid Competitive Paper & Plastic Packaging Demand by Type, 2009
2 Flexible Competitive Paper & Plastic Packaging Demand by Type, 2009
3 Competitive Paper & Plastic Packaging Demand by Material, 1999-2009
4 Competitive Paper Packaging Demand by Market, 2009
5 Competitive Plastic Packaging Demand by Market, 2009

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