Packaging tells consumers all there is to know about the product inside. In the U.S. alone, packaging is a $130 billion market, according to the Flexible Packaging Association. And much of the market is indebted to food and beverage-driven developments.

The following is a roundup of the latest world packaging data.

Flexible Packaging
Flexible packaging, the second-largest packaging type, is a $23.5 billion industry in the U.S. alone, according to mid-2007 statistics from the Flexible Packaging Association. Moreover, U.S. flexible bulk packaging is a $6.1 billion industry, with U.S. demand expected to grow 3.4 percent annually through 2011, according to the Freedonia Group.

Food is the largest market for flexible packaging, accounting for more than 57 percent of shipments, and flexible packaging continues to dominate the global food industry as it is widespread in nearly all food categories.

The Freedonia Group posits that film wrap, plastic strapping and plastic shipping sacks will lead gains. “Plastic such as polyethylene will remain the dominant material, with the limiting effect of downgauging softened by new applications and further inroads on paper sacks.”

In a separate report, on the $5.8 billion U.S. specialty-film industry, Freedonia proposes that specialty film demand in the U.S. alone will grow 4.8 percent annually through 2010: “Gains will be driven by higher-value materials, the rapid adoption of modified atmosphere packaging and improved film coating and metalization. Barrier films will remain dominant while biodegradable and water soluble films will grow the fastest from a small base.”

Labeled as the most revolutionary development since the tin can, retort pouch use continues to grow. This growth is anticipated despite ongoing controversy over whether the tin can or the pouch is more environmentally friendly.

In fact, sustainability — particularly biodegradability — has surpassed fad and become a trend that simply cannot be ignored, despite some cynicism still existing.

Sustainability and Biodegradability
Sustainability is a hot topic in the packaging industry right now, with much of the discussion revolving around materials and package design. Driven by evolving consumer awareness, demand from brand owners and retailers and recognition of “the environmental Armageddon that appears to be looming,” sustainable packaging is becoming increasingly important.

In fact, the full array of sustainability-oriented packaging solutions — from biopolymers and low-energy consumption components to small footprint machinery and e-machinery — took center stage among the 250+ companies in attendance at the PACK EXPO in October.

Key findings of an August 2007 study from Pira Intl. Ltd. estimate that biodegradable packaging — quantified at more than 42,000 metric tons in 2006 — will grow at a compound annual growth rate (CAGR) of 22 percent, to reach nearly 116,000 metric tons in 2011,” as noted by Packaging Digest, which added:

Western Europe is the leading consumer of biodegradable packaging. The markets in Asia Pacific and eastern Europe have been growing but are relatively underdeveloped at present.

The U.S., however, is the largest single market for biodegradable packaging. And the market is expected to continue, reaching more than 44,000 metric tons in 2011.

Sustainability and biodegradability are especially apparent in the flexible packaging area. But materials are only part of the picture.

More creative and environmentally friendly ways of producing packaged foods are also expected to become more widespread — a trend that is taking hold around the world, according to Datamonitor’s Productscan database (via Beverage Daily).

Design News recently cited the packaging industry’s “on-going push toward ‘more electric’ machines — and away from line shaft-based mechanical equipment — as a classic example of efficiency being good for sustainability.” Electric machines “can offer faster speeds, less energy usage, precise control and less downtime,” while machine improvements can also have a hidden impact on sustainability; servo-based machines, for example, have the flexibility to adjust to new sustainable materials.

Machinery
U.S. packaging machinery shipments climbed 6 percent to an estimated $6.110 billion last year, extending the industry’s string of consecutive annual increases to five years, the Packaging Machinery Manufacturers Institute (PMMI) announced in August. By far, food was the largest end-use market for new equipment, at about 40 percent of total purchases. Only converting machinery registered a modest decline of 0.6 percent.

Following the five consecutive years of growth, U.S. domestic demand for packaging machinery is projected to remain flat throughout 2007 at an estimated value of $6.266 billion.

“The market as a whole has racked up solid gains during most of the past decade with the exception of a pause associated with the economic downturn in 2001-2002,” according to PMMI, in its annual Purchasing Plans report.

The following have been leading customers to order packaging machinery in 2007:

• Increased focus by U.S. companies on manufacturing/packaging cost reduction and productivity;
• Increased flexibility needed to handle a widening range of packaging requirements (e.g., shorter packaging runs with a widening range of packaging styles, sizes and configurations);
• Growing importance of packaging with respect to product security and tracking;
• Increasing use of packaging as a competitive differentiator; and
• Greater demand stemming from upward growth of “convenience” in packaging.

U.S. packaging machinery shipments are forecast to grow at an average annual real rate of 3.1 percent over the next few years to $6.689 billion (constant 2006 dollars) by 2009.

Heading the Charge
Clearly, food and beverage is driving much of the developments in packaging. And considering the 263-billion-unit U.S. food container industry, there’s little wonder why.

Freedonia expects U.S. food container demand to reach $23.5 billion in 2011. Growth trends include heightened demand for more convenient foods and a shift toward value-added packaging. Plastic containers and bag pouches will log the fastest growth, while meat and dairy products and frozen specialties will lead gains by market. Similarly, aided by a shift toward larger, higher-value containers, U.S. demand for rigid bulk packaging is expected to reach $6.6 billion in 2011 [Source: Freedonia Group]

These days, as Packaging Digest aptly notes, “there is heightened concerns about food safety.”

In recent years, as consumers try desperately to maintain their health and avoid illness in the face of aging and ever-increasing health care costs, nutrition has gained prominence. “The U.S. Government, the Food and Drug Administration (FDA) and a host of consumer groups are squaring off with food producers over nutrition and the responsibilities and ethical issues inherent in the production and marketing of food,” according to Plunkett Research.

As for packaging relative to this concern, a recent statement from Mintel Global New Products Database forecasts the following:

In the food and beverage market, we will see companies finding ways to make their ingredient labels read more like home recipes than chemists’ shopping lists. In non-food products, however, the concept of a “clean label” is something that is inherently difficult to achieve. As a result, we expect manufacturers to include fewer tough-to-understand or controversial ingredients, as well as better explanations of what unfamiliar ingredients actually do.

Further, Mintel GNPD predicts companies will provide “more product information than ever before,” with manufacturers increasing transparency about the origin of ingredients, how they are manufactured and how they are packaged.

To that end, the $67 billion global label market will grow 5.5 percent annually through 2011, further “driven by the diffusion of advanced logistics in developing areas and the development and penetration of smart radio frequency and value-added labels,” according to the Freedonia Group.

Likewise, Freedonia expects U.S. demand for active and intelligent packaging to grow 13 percent annually through 2011. “Intelligent packaging will grow the fastest, driven by the emergence of lower cost time-temperature indicator (TTI) labels,” according to yet another study from the research firm in August.

As with most like developments, food and beverage will offer the best market prospect for active packaging, which will be paced by gas scavengers.

Fred White contributed to this report.

Resources

2007 State of the Industry Report
Flexible Packaging Association

Much Ado about Meat Packaging
by John Kalkowski
Packaging Digest, Nov. 1, 2007

Food, Beverage & Tobacco Trends
Plunkett Research, Ltd.

Flexible Bulk Packaging to 2011
Freedonia Group, Sept. 1, 2007

Fresh Forecasts for 2008
Mintel, Nov. 30, 2007

Specialty Films to 2010
Freedonia Group, Feb. 1, 2007

Biodegradable Packaging to Grow at CAGR of 22 Percent
Packaging Digest, August 2007

Is Sustainability a Fad or Trend?
by John Kalkowski
Packaging Digest, Aug. 16, 2007

Active & Intelligent Packaging to 2011
Freedonia Group, Aug. 1, 2007

PACK EXPO 2007 Focuses on More Sustainable Manufacturing and Food & Drug Safety
by John Blanchard
ARC Advisory Group, Nov. 15, 2007

U.S. Packaging Machinery Purchase Plans
Packaging Machinery Manufacturers Institute, April 2007

World Labels to 2011
Freedonia Group, June 1, 2007

Sustainability Takes Center Stage at PACK EXPO Las Vegas
Packaging Digest, September 2007

Sustainable Packaging: Brand Owners Get on Board
by Mark Spaulding
Converting Magazine, Nov. 1, 2007

Fresh, Super and Organic Top Trends for 2008
Beverage Daily.com, Nov. 28, 2007

Productivity Means Sustainability
by Joseph Ogando
Design News, Oct. 22, 2007

2007 Shipments and Outlook Study
Packaging Machinery Manufacturers Institute, August 2007

Flexible Packaging Facts & Figures
Flexible Packaging Association, July 24, 2007

Food Containers: Rigid & Flexible to 2011
Freedonia Group, July 1, 2007

Retort Pouch – A Fast-Growing Packaging Technology in Today’s Consumer World
FlexNews, Nov. 28, 2007

Rigid Bulk Packaging to 2011
Freedonia Group, May 1, 2007

Additional

10 Directions – Packaging: Trends to Watch in 2008
by Steven Dupuis
Step Inside Design, September/October 2007