FPA'S 2008 SUSTAINABILITY INITIATIVES

The value proposition of flexible packaging is an important aspect in the conversation on sustainable packaging. Over the past year and a half, FPA has developed and implemented several sustainability initiatives dedicated to promoting a greater understanding of flexible packaging as a sustainable packaging solution.

FPA commissioned market research firm Packaging & Technology Integrated Solutions (www.pti-solutions.com) to conduct in-depth market research on sustainability, and its current and future impact on the flexible packaging industry; represented the industry as an active member of the Wal-Mart Sustainable Packaging Steering Committee; educated FPA members and provided valuable insight into the Wal-Mart Packaging Scorecard; dedicated a full page to sustainable packaging on the FPA website; and promoted the environmental benefits of flexible packaging through the “Sustainability and Flexible Packaging: More Value. Less Waste.” brochure.

This summer, FPA will continue to study sustainability and flexible packaging, and conduct research examining how the Flexible Packaging Association can positively promote the flexible packaging industry in four distinct areas: (1) Use of Energy, (2) Value Proposition of Flexible Packaging (from a consumer, retailer and value chain perspective), (3) End of Life-Waste to Energy and (4) End of Life-Recycling. This research will assist the association in protecting the flexible packaging industry and understanding how the industry can be favorably positioned within those specific areas. The efforts and results of the study will largely impact the future direction of FPA’s education and communication programs.

Use of Energy
The study will examine, identify and define how the flexible packaging industry can begin to positively transition the discussion and thoughts of flexible packaging materials from waste to energy. Analysis of the opportunities and issues associated with flexible packaging as an energy savings across the value chain will be examined, in addition to several other Use of Energy components, including energy value, metrics and tools, lifecycle analysis/inventory (LCA/LCI) understanding, environmental regulations/ legislation, carbon footprint, carbon cap and trade.

Value Proposition of Flexible Packaging
From a consumer, retailer and valuechain perspective, the study will quantify the value proposition of flexible packaging. Focusing on the safety, spoilage avoidance and retention of product quality, research will document and verify known flexible packaging attributes among brand owners, retailers and consumers, and identify key attributes and characteristics that will positively support the association’s future communication and marketing efforts on the environmental benefits of flexible packaging.

End of Life-Waste to Energy
The research will analyze how the waste-to-energy discussion has declined in the United States versus how the idea has evolved internationally. The study will encompass a historic view of this discussion over the past 25 years and include analysis of waste-to-energy opportunities and issues for flexible packaging. Additional End of Life-Waste to Energy components to be examined include financial/economic impact, benchmarking/best practices, waste-to-energy emissions and byproducts, social and regulatory impacts, new technologies and value chain insights.

End of Life-Recycling
To provide insight into the challenges and solutions for the recycling of flexible packaging, the study will analyze and identify opportunities available to the industry. The study will focus on the issues surrounding the recycling of flexible packaging and how the industry can best move forward with recycling throughout the value chain.

The results of the research will be presented on Oct. 28, 2008, during the 2008 FPA Fall Executive Conference, which is being held in Chicago. The information and data provided through this study will be of great value to FPA members and the industry. For more information on the FPA Strategic Sustainability Study and FPA’s Market Research Program, visit the association online at www.flexpack.org or contact FPA at 410-694-0800.

FPA'S 2008 STATE OF THE INDUSTRY SURVEY REPORT PAINTS POSITIVE OUTLOOK

Recently, FPA published its 18th annualState of the Industry Report. Data and statistics within the report provide insight into the economic and financial heath of the flexible packaging industry. The report is currently available in print and online within the “Members Only” section of the FPA website, www.flexpack.org. The FPA2008 State of the Industry Reportprovides a comprehensive view of the total U.S. packaging industry, with additional insight into global packaging, flexible packaging industry growth, materials and operations, mergers and acquisitions (M&A) activity (2005-2007), key flexible packaging end-use markets, U.S. exports and imports (2007), and top industry issues and drivers. The valuable content of the report makes this a key publication for flexible packaging converters and suppliers, and the investment community.

Data and information available within the report was gathered from a total of 82 converters (FPA members and non-members) through a series of FPA surveys, including the FPA State of the Industry Survey (FPA member survey) and the Industry-Wide Converter Information Survey (FPA non-member survey). This year’s composite responses represent nearly $15 billion in flexible packaging sales. The report also includes data from the most recent U.S. Census Bureau Annual Survey of Manufacturers. Following are highlights of featured sections within the report.

Industry Growth
Growth of the U.S. flexible packaging industry continues as the industry is currently valued at approximately $25.6 billion (in 2007). This $25.6 billion includes an estimated $2.7 billion in consumer trash and storage bags. FPA also estimates that within the U.S. Census Bureau data, there are at least $2-3 billion in film further converted for use in final flexible packaging products. The2008 State of the Industry Reportnotes that flexible packaging remains the second largest packaging segment in the total U.S. packaging market, accounting for approximately 18% of the estimated $135 billion North American packaging market. On a global basis, the Western Europe and North American (principally U.S.) segments are the largest markets for packaging products, accounting for about 28% and 27%, respectively, of the global packaging industry.

Report data indicates that the annual growth rate for the U.S. flexible packaging industry was 2.9% (2006-2007), with a projected rate of 1.4% (2007-2008). This flexible packaging growth compares favorably with gross domestic product growth for 2007, which is estimated to have grown at 2.2% for the year. These results are positive considering the numerous challenges of 2007 and the continued uncertain economic conditions of 2008.

Flexible Packaging End-Uses
The applications of flexible packaging are almost limitless. The report provides a sales and percentage breakdown of the key end-use market that comprise the flexible packaging industry. The report notes that food (retail and institutional) represents 54% of the total flexible packaging market; nonfood (household goods, garden supplies, pet food, cosmetics) combined for retail and institutional uses account for 12%; consumer products (household paper, wraps, plastic storage and trash bags) account for approximately 10%; and industrial applications (agricultural fertilizer, film cover, seed, automotive, outdoor equipment and supplies) account for approximately 9%. The medical and pharmaceutical markets combined make up nearly 8%, and retail poly bags account for about 7%.

M&A Activity
Mergers and acquisitions activity in flexible packaging for 2007 showed 21 domestic transactions completed. This compares with 16 transactions in 2006 and the record high of 24 in 1999.

Imports and Exports
In 2007, U.S. flexible packaging exports were essentially flat at $1.4 billion. The two leading trading partners for U.S. exports continued to be Canada and Mexico. Flexible packaging imports in 2007 grew 4% to $3.4 billion, raising the trade gap deficit to more than $2 billion.

Future Outlook
Converters in this year’s SOI Survey indicated a strong future outlook for the flexible packaging industry with growth expectations over the next five years in the 5% to 6% per year range. Suppliers responded with slightly less optimism, projecting future growth in flexible packaging to be 4% to 5% per year.

The Flexible Packaging Association’s2008 State of the Industry Reportis available to members at no charge and nonmembers for $3,500 (print copy only). For more information, please contact FPA at 410-694-0800 or visit the association online at www.flexpack.org.

FPA'S 2008 ACADEMIC SCHOLARSHIP & SUMMER INTERNSHIP PROGRAM

This summer, Jonathan Quinn and John Wrenn of Clemson University, Emily Howe and Michelle Matrazzo of Rochester Institute of Technology, and Jessica Baker of Western Michigan University will participate in summer internships with FPA converter members.

FPA members American Packaging Corp., CL&D Graphics, Constantia Hueck Foils LLC., Pliant Corp. and Technipaq Inc. will provide internships and opportunities for packaging and printing school students to learn about various aspects of the flexible packaging industry. Upon the successful completion of their internships, the students will each receive a FPA academic scholarship valued at $3,000. Since 2005, the FPA Academic Scholarship & Summer Internship has placed packaging and printing school students in career-enriching internships with FPA members, and provided $30,000 in academic scholarships. More information about the FPA Academic Scholarship & Internship Program is available on www.flexpack.org or by contacting the association at 410-694-0800.