The European flexible-packaging field is dynamic, developing, and decisive as a resource-efficient format, according to Jan Homan, chairman of Flexible Packaging Europe. He gave his annual continent-wide update last Wednesday at the Flexible Packaging Assn. Annual Meeting in Naples, FL.
Overall, the European flex-pack market was up 2.1% to $15.8 billion in 2017. The FPE defines flexible packaging as primarily value-added materials for primary retail and non-food end-use applications. It excludes shrink and stretch films for secondary-packaging apps, carrier bags, supermarket shopping bags and self-serve counter bags. Consequently, its numbers seem lower than they should be compared to the US market, especially for a region with 28 countries and 511 million consumers.
Some Curmudgeon bullet “points of interest:”
- The 2017 global flexible-packaging market hit $86 billion, up 4.5% over 2015; the estimated global market will reach $107 billion in 2022.
- Western Europe held a 14% market share of global production last year, up 2.0% over 2016, and Eastern Europe a 3% share, up 2.3% over 2016.
- Major Western European markets including Germany, France, UK, Spain and Benelux are growing at around the regional trend; Italy is growing at around 2.5% by value, slowing slightly from 2016; Turkish demand continued to grow at least 1% above the average.
- Depreciation of the Pound Sterling following Brexit is seeing more import substitution and more UK converters targeting exports to mainland Europe. Some mainland European converters are considering establishing a UK presence for production.
- Above-average flexible-packaging growth by value is seen in applications such as coffee, fresh produce, chilled foods/ready meals, pet food, and pharmaceuticals. Confectionery, one of the largest categories, was broadly static in terms of value.
- As for Eastern Europe, growth is picking up to around 3% in Russia, despite some international economic sanctions. Ongoing import substitution in Russia has seen production growing faster than national consumption during the year.
- In Poland, the market continued to grow relatively strongly at over 4% in 2017.
- Exports out of Eastern Europe keep climbing, especially begin sent into Western Europe. More converters, particularly those in Poland, are increasingly active in exports.
- The top five European flex-pack makers and their regional shares last year were Amcor Flexibles (19%), Constantia Flexibles (7%), Mondi Packaging (6%), Sealed Air / Cryovac (3%), and Wipak (3%). This is basically unchanged from 2015.
- CEFLEX is a collaborative project of a European consortium of companies representing the entire value chain of flexible packaging. The Project CEFLEX Vision for a circular economy states, “By 2025, there will be an established collection, sorting, and reprocessing infrastructure/economy across Europe for flexible packaging based on end-of-life technologies and processes, which deliver the best economic and environmental outcome for a circular economy.”
- FPE’s key sustainability messages: 1) Flex packs are resource-efficient and support sustainable consumption and production, help prevent food waste, and also packaging waste; 2) Flex packs are more resource-efficient than alternative formats, even with its currently low recycling rates; 3) Flex packs can be recycled/recovered, and this is the case now in several countries.
My Thoughts: As a slightly more mature market than the US, European flexible packaging is still growing at
a reasonable rate with pockets of above-average production and consumption. Estimates of European Union
GDP at 2.3% higher this year, and another 2% higher in 2019, only bode well for further flex-pack demand.
Brexit is still likely to throw some kind of monkey wrench into the economic mix with a March 2019 deadline for
the United Kingdom to leave the EU.
What the US flex-pack industry can learn from its European cousins, with help from the FPE, is how to deal with the packaging format's problems when it comes to recycling (collection, sorting, and reprocessing) for a circular economy. A North American version of CEFLEX would be a good step in that direction.