The global packaging industry witnessed the defining influence of technology innovation and development, a key reason for the industry's robust growth over the last few decades. The steady growth only took a breather during the few years of recession in the past, and the recent one in 2008-2009, which halted and even declined growth rates during the period. Over the years, technology development has been moving in sync with growing consumer demand for convenient and quality packaging. Eclectic packaging solutions, for instance, have evolved to offer exceptional product packaging advantages for manufacturers and consumers alike.
Technology advancements have redefined the functionality of packaging from beyond the traditional need for mere product protection. Upgradations and modernization have offered huge potential for the growth of flexible packaging (including both converted and unconverted materials) at the expense of conventional semi-rigid and rigid packaging.
Strong consumer demand for easy-to-prepare foods and processed foods in single-serve packs is helping replace the demand for rigid and semi-rigid packaging with converted flexible packaging. Standup pouches, for instance, are replacing multi-wall bags in packaging of baked goods and snacks.
Polypropylene and polyethylene dominate the global converted flexible packaging market owing to their cost advantages over foil and paper. World market for converted flexible packaging holds mixed potential for growth, with developed and mature markets—such as U.S., Europe and Japan—posting sedate year on year growth patterns, and developing Asian markets—such as India and China—registering robust sales gains. Lucrative opportunities also exist in Eastern European, Latin American and Middle East markets.
Given the untapped potential in developing markets (such as India and China), the world converted flexible packaging industry has lately been witnessing increased strategic partnerships, mergers and acquisitions, asset exchanges, capacity expansions and establishment of new manufacturing facilities. The market, in other words, is abuzz with activities as manufacturers strive to offer innovative flexible packaging solutions with improvements in several key areas of product performance.
Rapid replacement of rigid containers with flexible packaging, together with the growing applications of converted flexible packaging in end-use sectors, including food and beverage, snacks, baked products, health and beauty, and pharmaceuticals, are helping polish up the market's prospects.
Flex packs featuring environmental friendly features, convenience and superior barrier protection properties (such as seal quality and tolerance to microwave oven temperatures) are expected to witness the highest market gains.
Plastic films are likely to grow at the expense of foils and paper packaging.
The ongoing wave of consolidation is expected to further strengthen the strong hold of multinationals in the global converted flexible packaging market. Given their dwindling presence in the mainstream markets, small domestic players are homing in on the niche markets by focusing product development efforts to new and innovative end-use packaging requirements.
In the fiercely competitive marketplace, innovation stands out as the key to market success for players operating in the marketplace. Focus on research and development activities, product upgradation, production cost cuts, streamlining manufacturing operations, and realigning marketing and distribution are few strategies adopted by companies to increase their bottom line profitability.
The global packaging industry literally reeled under the severe impact of the worldwide economic slowdown. The overall packaging sales in the U.S. and Europe witnessed all-time lows for 2008 in major end-use industries, while packaging manufacturers during the year, reported a massive 20 percent decline in sales. The position was no better in 2009. However, despite stagnant growth rates the overall damage in flexible packaging market was not as severe as that suffered by the larger packaging market, which witnessed huge declines over the period.
The converted flexible packaging market displayed resilience in spite of investment slowdown in new conversion equipment. The major end-use market—the food-packaging sector—experienced a relatively smaller decline. In the U.S., as a result of the slowdown, more than 55 percent of the companies reduced their capital expenditures by way of lower investment levels in 2009. In Japan, consumption of polyethylene in Japan represented 8.4 percent decline in 2009 in comparison to 2008. On the positive side, the market for flexible packaging started witnessing recovery in the year 2010 as several positive trends across the globe encouraged further growth in both volume and value terms.
Asia-Pacific constitutes the single largest market for converted flexible packaging, as stated by the new research report on Converted Flexible Packaging. India and China drive growth in the Asia-Pacific market enabling it to accrue a major share in the global market in volume terms. Europe and the U.S. tail closely behind, the three markets together capturing a massive global share. The Asian region is also slated to surge ahead of the other markets at the overall fastest CAGR of more than 5.0 percent over the analysis period.
The Plastic Films material substrate—comprising of polyethylene, PVC, polypropylene and other resins—constitutes the largest market. With respect to fastest growth rate, the Polypropylene material under the plastic films group is projected to sail ahead at a CAGR of 3.5 percent through 2015.
Key participants in the market include AEP Industries Inc, Amcor Limited, American Packaging Corp., Bemis Co. Inc., Clondalkin Group Plc, Constantia Packaging AG, Exopack LLC, Huhtamaki Oyj, Mondi Group, Printpack Inc, Pliant Corp., Rexam Plc, Sealed Air Corp., Sonoco Products Co., United Flexibles GmbH and Wipak Oy.
The research report titled "Converted Flexible Packaging: A Global Strategic Business Report" announced by Global Industry Analysts Inc., provides a comprehensive review of current market trends, industry overview, product profile, end-use markets, product innovations, recent industry activity and profiles of market players worldwide. Analysis and overview is provided for major geographic markets such as U.S., Canada, Japan, Europe, Asia-Pacific, Latin America and Middle East. Market analytics are provided in terms of volume (tons) and value (US$) for material types including Plastic Films (Polyethylene, Polypropylene, PVC and Other Resins), Paper and Aluminum Foil. The study also provides historic data for an insight into market evolution over the period 2000 through 2006.
Source: Global Industry Analysts Inc.