Domestic plastics held their own in 2008
Brand names: Down but not out
‘Cause’ products never felt effects of downturn, survey says

Domestic plastics held their own in 2008

U.S. exports grew 6.7% over the course of the year, while domestic shipments decreased less than one percent.

In spite of a dismal fourth quarter, U.S. plastics exports showed robust growth in 2008 according to the2008 Global Business Trends reportfrom the Society of the Plastics Industry. While fourth quarter 2008 exports were down 23% from the prior quarter and down 12% from the same quarter in 2007, SPI’s report shows that overall exports increased by 6.7% for the year.

SPI’s report also indicates that plastics exports in 2008 broke the $50 billion barrier for the first time. During 2008, U.S. plastics exports accounted for approximately 4.4% of total U.S. exports. Imports, on the other hand, increased by a more modest 3.0% in 2008, accounting for just under $39 billion.

Approximately one-fifth of the total value of plastics produced in the United States in 2008 was exported overseas. With regard to plastics machinery, this percentage rises to more than 50% and approximately 40% of the resins and raw materials produced in the United States being destined for other markets.

While U.S. plastics exports make up a significant portion of the big picture, SPI’s report points out that many exports don’t travel very far: Slightly more than 42% of U.S. plastics exports are destined for Canada and Mexico. China represents the industry’s third largest export market.

Domestically, plastic shipments declined less than a percentage point: The estimated value of domestic shipments decreased by 0.8 percent in 2008, to $266.4 billion.

Brand names: Down but not out

Consumers remain committed to certain brand names and their perceived quality. But is that enough to keep consumers coming back for more?

Although penny-pinching consumers often put price first when making shopping decisions-an attitude reflected in the shift to private label purchases-they are least likely to trade Kraft, Coca-Cola and Tide for store brands, even though 84% of shoppers see brand names as more expensive, according to astudy by The Integer Group and M/A/R/C Research.

While these few brand names have demonstrated a certain amount of staying power, it’s no time for these companies to be resting on their laurels. Results from an earlier survey indicate that only 37% of consumers say name brands are more reliable and 39% believe name brands are better quality products. Likewise, the study indicated that more than 80% of consumers seek products that are on sale and compare prices between brand name and store brands when buying groceries or household products. Further, consumers who are currently buying more private-label products say they don’t anticipate returning to name brands in the foreseeable future.

Challenged by trends in comparison shopping, lower price and decreasing differentiation among brands, one Integer Group executive suggests that national brands will need to consistently deliver more if they hope to keep customers from defecting.

“With this many shoppers doing price-comparison, name brands need to act now in order to keep consumers-and beyond the recession, entice consumers to return,” says Craig Elston, senior vice president.

Elsewhere in the survey, two-thirds of shoppers believe that name brands offer more novelty and innovation. However, that number is tempered by the number of respondents-less than half-who believe that name brands also offer better or more reliable products. Finally, the study found that consumers consider Kroger, Walmart, and Target to be stores that carry the best private-label brands.

‘Cause’ products never felt effects of downturn, survey says

Recession didn’t dent consumers’ appetite for brands that support good causes.

Edelman’sthird annual Goodpurpose studyfound that 61% of consumers across the globe have purchased a brand that supports a good cause even if it wasn’t the cheapest brand. Last year’s study asked consumers if during the recession they would buy from brands that support a good cause even if it is not the cheapest brand: Fifty-five percent had affirmed they would.

The survey also found that 57% of people said a company or brand earned its business because it had been doing its part to support good causes. Two-thirds of consumers said they would also switch brands if another brand of similar quality supported a good cause.

The study also indicates that 64% of people worldwide said they would recommend a brand that supports a good cause, up from 52% in 2008. In the United States, that number is even more dramatic: up to 63% this year, from 47% in 2008.

Chemical Market Associates Inc.
DeWitt & Co. Inc.
Plastics News