In its new report, “The Future of Packaging in North America to 2017,” Smithers Pira uncovers current and future trends in the North American packaging market, which is expected to grow from $169.1 billion to $186 billion by 2017. Here are five of them:
1. Mexico to continue impressive growth: Of the three North American countries, Mexico is forecast to have the highest percentage of growth in both the short and mid-term. In 2011 the largest market share of the North American packaging market was by the U.S., with 83.3% ahead of Canada, with 9.8%, and Mexico, with 7.0%. The U.S. also saw the biggest negative impact from the global economic downturn.
Mexico is expected to gain on average 3.1% per annum over the next four years to 2017. Particular areas of growth in the Mexico packaging industry include soft drink beverage packaging that meets the needs of customers seeking both versatility and sophistication from their packaging.
2. Paperboard to lead market share: Although paperboard suffered a steeper decline than most other packaging materials during the recession, especially in the U.S., it has recovered quickly and returned to pre-crisis levels. In 2011 in North America, the largest share of packaging consumption was paperboard, taking 33.7% of the total, and corrugated packaging claimed the largest share of North American paperboard packaging sales.
Corrugated packaging was not only the fastest-growing paperboard sector, increasing by 4.7% during the year 2011, it also accounted for the largest share of board consumption at 64.3%. The U.S. is forecast to maintain its 2012 share of North American board packaging sales, growing on average by 0.9% per annum above inflation levels to reach $51.9 billion in 2017.
3. Rigid plastic packaging to continue success in North America: The rigid plastic packaging market is forecast to grow on average by 2.6% per annum to achieve sales worth $40 billion and 11.9 million tonnes by 2017. Mexican rigid plastic packaging sales are expected to grow the fastest in the region, with an average annual growth rate of 4.8% and surpass Canadian packaging market consumption levels by $45 million in 2017. Rigid plastic packaging is expected to continue to gain popularity in the market, experiencing the highest growth rate across plastics, ahead of PET and polyethylene.
In 2017, the rigid plastic packaging market is forecast to be worth $433.5 billion, with PE and PET remaining the main plastics used for consumer manufacturing.
4. Industrial sectors to demonstrate recovery: Uncertainties still remain concerning the North America economy—specifically the impacts of the European economic crisis and political uncertainty in oil-exporting countries. The U.S. has also been significantly affected by falling real estate values and difficulties in securing financing for future investments. However, the industrial segments have been in recovery since a sharp downturn in demand in 2009. Real estate values are now also starting to show recovery.
Growth rates of industrial packaging are showing the same expected growth rates as those in consumer packaging in coming years. Industrial packaging is expected to increase on average by 1.2% per annum above inflation levels to reach $62.5 million by 2017.
5. The growth of retail-ready packaging: Retail-ready packaging (RRP) refers to packaging delivered to a retailer in a self-contained unit, which is immediately ready for on-shelf product display without the need for assembling or unpacking. This type of packaging provides an attractive structure that both advertises and displays a product, cutting down on operation costs as the shipping package itself arrives basically shelf-ready.
RRP is continuing to gain popularity and traction in North America as a number of retailers consider its implementation and others expand their efforts in the area. This is due to an increased understanding of RRP, and the ever-growing penetration of RRP across categories. According to a survey conducted by Packaging World, 57% of suppliers in North America stated they had received an increased number of requests for RRP in the last 12 months from their retail customers.
Source: Smithers Pira