Industry Performance, Materials & Processes, and End-Uses

Recently, the Flexible Packaging Association published its 20th annual State of the Flexible Packaging Industry Report, which provides insight into the economic and financial health of the flexible packaging industry. The 2011 State of the Flexible Packaging Industry Report is currently available in print and online within the “Members Only” section of the FPA Web site,

Data and statistical information available within the Report is gathered through a series of FPA surveys including the FPA members State of the Industry Survey, and the FPA non-members Industry-Wide Converter Information Survey. Composite survey responses represent nearly $13.9 billion in flexible packaging sales. Additionally, data from the U.S. Census Bureau’s 2009 Annual Survey of Manufacturers, the U.S. Department of Labor, the U.S. Department of Commerce, and investment banking reports, are included in the Report. This valuable content makes the Report a key publication for flexible packaging companies and the investment community. Information on industry M&A activity, global packaging, industry exports and imports, industry structure and consolidation, and industry issues and opportunities is provided within the Report. This issue of the FPA Update focuses on the Industry Performance, Materials & Processes, and End Uses sections of the 2011 FPA State of the Flexible Packaging Industry Report.

Industry Performance

The U.S. flexible packaging industry is estimated to be about $25.5 billion in annual sales for 2010. It represents 19 percent of the $134 billion U.S. packaging industry and remains the second largest segment behind corrugated paper. According to the Report, growth of the U.S. flexible packaging industry has been steady over the past 10 years with a compound annual growth rate (CAGR) of 2.6 percent and annual growth rate of 7.3 percent.  FPA estimates that the industry will increase to $27.5 billion in 2011.

Materials & Processes

Flexible packaging companies utilize a number of materials and processes to produce flexible packaging. Film and sheet, and plastic resins account for 61 percent of the materials used in the U.S. flexible packaging industry. Inks account for about 9 percent; paper, 11 percent; foil, 5 percent; and, coatings and adhesives, 4 percent. The Report details that PE (polyethylene) film is used by 90 percent of survey respondents, and accounts for 39 percent of total film use. PE resin is used by 86 percent or survey respondents and accounts for 92 percent of total resin.

End Uses

Flexible packaging continues to expand packaging options for a wide variety of retail, industrial, and institutional products. The Report notes that 50 percent ($12.8 billion) of total flexible packaging is utilized for food sold through retail outlets. Driven by innovations in technology and design, the use of flexible packaging in other markets continues to expand rapidly. Survey participants noted that flexible packaging top growth end-uses include pet foods and supplies, refrigerated meat, pharmaceuticals, produce, dinner products and mixes, snacks, coffee and tea, health and beauty aids, miscellaneous dry shelf, and medical devices.