Flexibility is the Key
There are hurdles indeed, but there’s also a big
carrot at the end of the stick.
March 2006
by Tom Polischuk
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Flexible packaging is a dynamic area for package printing. Although other package-printing segments, such as tags and labels and folding cartons, are following a relatively normal course of innovative solutions, flexible packaging is experiencing a step increase, moving into packaging areas that are the domain of competing packaging methods—most notably, rigid containers.
In a study titled, “Converted Flexible Packaging,” released in January 2006, The Freedonia Group predicts that the demand for flexible packaging will increase more than 4 percent each year through 2009. The advantages that flexible packaging offers over rigid packaging include cost, performance, and source reduction (less material used). Growth will also be fueled by technical advances in breathable films and resealable stand-up pouches, along with manufacturers’ requirements for high-impact graphics.
The study zeros in on pouches as being at the leading edge of the growth curve, projecting demand to rise at a 6.6 percent annual rate through 2009. Although flat pouches will see solid gains, stand-up pouches will be where the action is. The study cites advantages that include excellent visual appeal, product differentiation, convenience, portability, and reclosability.
In the overall packaging market, the food industry will be on the higher end of the growth curve at 4.3 percent per year, says Freedonia. Consumer demand for convenience and single-serve unit packaging will help drive the growth. In non-food markets, growth is projected at 3.7 percent, with the best opportunities in the pharmaceutical and medical markets.
According to the study, one item that will likely constrain the business opportunities for North American suppliers is the shift to offshore production in many consumer products markets. This is a trend that will be watched closely for many years to come.
How was 2005?
Marla Donahue, president of the Flexible Packaging Association (FPA), reports “the flexible packaging industry had a pretty good year, especially considering the impact hurricanes Katrina and Rita had on oil, gas, and resin prices and availability. U.S. flexible packaging annual sales grew to more than $22 billion, a growth rate of 3.8 percent, continuing its trend of outpacing U.S. GDP. Profit margins did suffer, but are expected to increase again in 2006.”
Frank Romano, professor emeritus at the RIT School of Print Media, has similar views of the past year, saying “2005 was a decent year for flexible packaging revenues.” He estimates revenue growth at about 5 percent over 2004, to around $20 billion. However, he also acknowledges that “profits were strained by everyone in the supply chain.”
In a study titled, “Converted Flexible Packaging,” released in January 2006, The Freedonia Group predicts that the demand for flexible packaging will increase more than 4 percent each year through 2009. The advantages that flexible packaging offers over rigid packaging include cost, performance, and source reduction (less material used). Growth will also be fueled by technical advances in breathable films and resealable stand-up pouches, along with manufacturers’ requirements for high-impact graphics.
The study zeros in on pouches as being at the leading edge of the growth curve, projecting demand to rise at a 6.6 percent annual rate through 2009. Although flat pouches will see solid gains, stand-up pouches will be where the action is. The study cites advantages that include excellent visual appeal, product differentiation, convenience, portability, and reclosability.
In the overall packaging market, the food industry will be on the higher end of the growth curve at 4.3 percent per year, says Freedonia. Consumer demand for convenience and single-serve unit packaging will help drive the growth. In non-food markets, growth is projected at 3.7 percent, with the best opportunities in the pharmaceutical and medical markets.
According to the study, one item that will likely constrain the business opportunities for North American suppliers is the shift to offshore production in many consumer products markets. This is a trend that will be watched closely for many years to come.
How was 2005?
Marla Donahue, president of the Flexible Packaging Association (FPA), reports “the flexible packaging industry had a pretty good year, especially considering the impact hurricanes Katrina and Rita had on oil, gas, and resin prices and availability. U.S. flexible packaging annual sales grew to more than $22 billion, a growth rate of 3.8 percent, continuing its trend of outpacing U.S. GDP. Profit margins did suffer, but are expected to increase again in 2006.”
Frank Romano, professor emeritus at the RIT School of Print Media, has similar views of the past year, saying “2005 was a decent year for flexible packaging revenues.” He estimates revenue growth at about 5 percent over 2004, to around $20 billion. However, he also acknowledges that “profits were strained by everyone in the supply chain.”
Companies Mentioned:
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