Plastic Packaging Growth to Outpace Paper

In selected packaging markets where paper and plastic compete, plastic’s overall volume share will continue to expand, reaching 49 percent by 2012, according to a report released by Cleveland-based market research firm the Freedonia Group.

This percentage understates plastic’s share, since less plastic is required than paper in most applications because of its lighter weight. Plastic’s share of the market will expand more slowly than in the past decade, as a number of packaging applications are now fairly mature in terms of the share controlled by plastic. Still, material enhancements which enable extended shelf life and increased durability, along with reduced material requirements and the addition of convenience features, such as the ability to be re-sealed, will fuel continued opportunities for plastic packaging.

Plastic packaging growth is forecast to outpace that of paper packaging through 2012 in all competitive markets covered in this study and is projected to climb 2.4 percent per year through 2012. Advances will result from plastic’s competitive cost and performance advantages, including light weight, moisture resistance, enhanced barrier properties and puncture resistance. The fastest market share increases for plastic will occur in pet food and soy beverage packaging, according to the Freedonia Group study. Opportunities are also anticipated in protective packaging, food service, dairy product, fruit beverage and frozen food applications.

The slowest volume advances for plastic are expected to occur in relatively saturated markets, such as milk and baked goods, though plastic will log more rapid growth in smaller sized milk bottles, driven by conversions from gable top cartons in schools and quick service restaurants. Additionally, below-average growth for plastic in retail bags will be the result of environmental concerns and/or legislative restrictions.

Because of inroads by plastic, paper consumption in most of these 17 markets will post marginal gains or continue to decline through 2012, according to the study. In a few markets, including soy beverages, food service, protective packaging, frozen food, dairy products and meat, paper demand is expected to climb above the average pace despite further inroads by plastic.

The full study, “Paper Versus Plastic in Packaging” is available for purchase through the Freedonia Group.