Packaging Coatings
Through 2020, the market for packaging coatings is expected to increase 1.9 percent per year to 60 million gallons. Gains will represent a strong acceleration in growth compared with 2010-2015 performance, in which demand was nearly flat. Demand for packaging coatings will match gains in packaging shipments through 2020, although coating requirements will be limited to some degree by the utilization of more efficient coatings and application technologies.
Coatings demand will benefit from healthy growth in paper packaging shipments and an acceleration in the output of metal packaging. According to analyst Matt Hurley, “Coatings will continue to be valued in the packaging industry for their ability to impart performance-enhancing qualities, such as barrier properties and antistatic capabilities.” These and other trends are presented in Manufacturing (OM) Coatings Market in the U.S., a relatively new study from The Freedonia Group.
Because of safety and increasingly stringent environmental requirements related to the emission of volatile organic compounds (VOCs), there has been a shift away from solvent-based coatings and those containing BPA in food-contact applications. As a result, water-based, radiation-cured and powder coatings continue to expand their market shares.
Learn more about Manufacturing (OM) Coatings Market in the U.S. and obtain a copy of the report from The Freedonia Group.
Security: No. 1 Priority in Pharma
Freedonia Group researchers are reporting global demand for labels in pharmaceutical applications is projected to increase 7.1 percent annually to nearly 55 billion sq. ft. in 2020, the fastest growth rate among major label markets. Trends favoring the use of smaller-sized medication containers will increase the number of labels required by pharmaceutical manufacturers, as will overall increases in drug production.
Growth in pharmaceutical label demand will also benefit from intensified efforts to combat drug counterfeiting and diversion. This trend will shift consumption toward higher value-added products with enhanced security features such as RFID tags, serialization codes, holograms, color-shifting inks and other anti-piracy measures. Findings are contained in Global Label Market, 8th Edition.
The largest share of demand for pharmaceutical labels exists in adhesive-sealed and pressure-sensitive paper configurations sold in rollstocks. Clear plastic and silk-screened configurations are gaining market share, due to their high visibility and tamper-evident features. According to analyst Mike Richardson, “These value-added labels are finding increased use in the over-the-counter (OTC) drug segment, where greater competition is boosting demand for labels that enhance the perceived value of products.”
Most of the global market for pharmaceutical labels is divided between security and standard types. Security labels, which include authentication markings and/or track and trace features to inhibit drug counterfeiting and diversion, will continue to post faster growth. However, standard labels will sustain widespread usage in the packaging of generic ethical drugs and non-proprietary OTC products. These pharmaceuticals are less vulnerable to counterfeiting and diversion, due to their lower prices. Standard labels will also continue to dominate applications involving prescription drugs dispensed by retail and mail order pharmacies.
Learn more about Global Label Market, 8th Edition and obtain a copy of the report from The Freedonia Group.
Packaging Films
Polyethylene terephthalate (PET) film demand in the packaging market is forecast to expand 2.4 percent annually to approximately $428 million (£322 million) in 2021, faster than any of the major packaging film resins. Growth will be driven by rising barrier requirements, particularly in food packaging. PET’s moderate barrier properties can better address these requirements than other commodity resins at a comparable cost. Those findings are presented in Packaging Films Market in the U.S., a new study from The Freedonia Group, a Cleveland-based industry research firm.
Demand for PET film in food packaging is expected to grow 2.5 percent per year to approximately $291 million (£219 million) in 2021. The meat/poultry/seafood and snack food markets were the two leading outlets for PET film packaging in 2016, together accounting for 40 percent of demand. In both markets, growth will be stimulated by higher barrier demands. Opportunities in the meat/poultry/seafood market include heat-and-eat packaging and retort pouches, and growth areas in snack food include high-barrier, transparent pouches for snack nuts, and high-end chip and popcorn bags.
According to analyst Ellen Kriz, “Growth will be restrained by competition from high-barrier resins, such as nylon and polyvinylidene chloride (PVdC), that are well-established in the meat/poultry/seafood market, as well as limited applications in snack food packaging. Most demand for film in snack food packaging derives from polypropylene bags.”
Food markets for converted flexible packaging accounted for 71 percent of total demand in 2016 and are expected to rise to $15.5 billion in 2021, Freedonia concludes in Converted Flexible Packaging Market in the U.S., 14th Edition. Ongoing product introductions and trends favoring smaller package sizes will fuel opportunities, as will the need for enhanced shelf life and package reseal abilities.
According to analyst Katie Wieser, “Pouches and bags will capture share from rigid packaging, most significantly in areas where convenience of use and storage economy are critical advantages, such as in the candy, snack and beverage markets.” Meat/poultry/seafood, baked goods, snack food, produce, candy/confections and pet food were the largest food markets for converted flexible packaging in 2016, accounting for a combined 65 percent of food packaging demand. Through 2021, the fastest advances are anticipated in beverages, with meat/poultry/seafood and snack food also seeing good gains.
Further inroads by pouches into rigid beverage container applications are supported by the availability of spout fitments that enable the ability to reseal and provide improved dispensing. In the meat market, gains will reflect the significance of case-ready fresh meats and convenience-oriented products, such as pre-seasoned meats and individually wrapped portions. Snack food gains will be the result of heightened interest in better-for-you snacks, which generally have higher barrier requirements and are packaged in distinctive standup pouches.
Learn more about Converted Flexible Packaging Market in the U.S., 14th Edition and obtain a copy of the report from The Freedonia Group.
U.S. Carton Business Healthy
According to the Paperboard Packaging Council’s (PPC) 2017 Industry Outlook and Market Data Report, U.S. folding carton shipments will grow at a 0.4 percent annual rate over the next five years, reaching a value of $9.6 billion. A break in rising boxboard prices should also aid folding carton manufacturers’ success in the coming years.
With unemployment at its lowest in years, real wages rising modestly and consumer net worth at the highest level in decades, consumer spending is expected to accelerate to greater than 3 percent by 2021. PPC notes, “The state of the U.S. economy is far from perfect, but conditions for the consumer—those that translate most directly to demand for goods packaged in folding cartons—are clearly on the mend.”
Specifically, the organization says, “This positive business environment is a key factor in the positive growth forecast for the next five years. Shipment growth will be healthiest in the middle of the five-year forecast, as the current business cycle is predicted to peak in 2020.”
Expectations hold that the total value of U.S. carton shipments will grow from an estimated $8.6 billion in 2016, while average annual values per ton will increase 1.9 percent per year.
“The folding carton industry is not without near-term challenges,” PPC explains. “Carton shipments are forecast to drop by 0.7 percent in 2017, likely due to ongoing shifts in consumer spending toward fresh food and continued substitution pressure from plastics. Overseas competition will continue to challenge domestic producers during the next five years, thanks to the anticipated strength of the U.S. dollar relative to most global currencies.
“On the flip side,” PPC continues, “A recent break in board prices is welcome news to the industry. From 2011 to 2016, paperboard costs rose at an annual average rate of 2.2 percent, cutting into converters’ profitability as the average value of folding cartons increased by just 1.3 percent over the same period. The recent drop in U.S. boxboard prices was likely caused by substantial new boxboard capacity in Europe, combined with an oversupply of cartonboard in China.”
Learn more about 2017 Industry Outlook and Market Data Report and obtain a copy of the report from the Paperboard Packaging Council.