The US flexible-packaging industry enjoyed a healthy 3.1% rise in dollar volume last year over 2017, according to the Flexible Packaging Assn.’s “2019 State of the Industry” Report presented at the trade group’s annual meeting in Scottsdale, AZ, last month. This growth equals nearly $1 billion of additional demand for flex packs by consumer-goods companies annually.
Presented by Curt Begle, president-Health, Hygiene & Specialties at Berry Global, and current chairman of the FPA, the report also forecasts growth for the packaging format for almost all end-use markets. This is particularly true for food, home-care products, and dog & cat food (see above). Unusual new applications for flex packs are coming on the market, especially for industrial and consumer products. Conversely, beverages, HBA and personal-care products are likely to see a decline in the use of flex packs in the US market by up to 1% through 2023.
Some highlights from the FPA report:
As with the previous few years, US converters saw their volumes rise slightly and profits remain flat in 2018. The US market’s products last year were composed of 78% value-added flexible packaging, or $24.8 billion of dollar volume. The other format segments’ shares were 9% consumer products, 8% retail poly bags and 5% other poly bags and wraps. As a portion of total US packaging spending of $170 billion in 2018, flexibles accounted for a strong 19% market share.
The number of converting companies in the US fell to 408 businesses last year, down from 410 back in 2009, while the number of manufacturing facilities dropped to 948 from 970 sites 10 years ago. Fortunately, the number of employees industry-wide remained at about the same level – 79,000 in 2018 – as in 2009.
In terms of printing methods, flexography continues to dominate with a 75% market share, compared to 67% in 2015. Gravure fell to 9%, down from 14% three years ago. Offset and other methods are at a 3% share, while digital printing continues its struggle to make up even 1%. Unprinted finished-materials share has fallen to 13% from 15% in 2015, which shows the rising demand for value-added flexible packaging.
The 33 US flex-pack mergers & acquisitions last year again altered the company-size composition of the field. Today flex-pack industry is now composed of about 51% companies with >$500 million in annual sales, 25% with $50-500 million in sales, and 24% with <$50 million in annual revenue. With the top 10 converters making up 55% of the industry, the trend toward “the big getting bigger” seems to have no end in sight.
The US flexible-packaging trade imbalance only got worse in 2017. Imports, mostly from China and Canada, rose to about $4.6 billion while exports, primarily to Canada and Mexico, remained steady at about $1.8 billion. Roughly 84% of FPA converter member companies export their products.